Posted on July 2, 2014 | Leave a comment
From over the transom: CA, I want to point you to some I think important info, a back door assault that I think is going to have major ramifications.The .gov is allowing exports of “unrefined oil” for the first time in forever.
Why?
Well, Vlad the Impaler has imperiled Europe by turning off the gas line and also making it “pre pay” environment.
So where will the Eurotard Socialists get their gas this winter?
Duh, the FUSA.
What will exporting shit tons of gas to Europe get us?
Fucked in regard to energy prices this winter. The price of what major winter rural fuel is tied to NG prices? Propane (which by the way went massively short physically this past winter) is used by rural America along with wood.
What does the EPA want to do about wood stoves?
Eliminate them.
See where this is going? It’s a triangle choke on rural America. Sons a bitches are really pouring it on. I checked my prop supplier price this AM and they are at $3.91/gal; last summer was $2.98.
After we get going with exports it should go: A-Lower B-Higher?
Here’s the first story about the change in export law:
WARNING – GRAPHIC CONTENT: The video below contains more crack than your eyes can likely handle and I’m not referring to the drug.
As an American, I am appalled as I witness Barack Obama systematically attempt to bring America to her knees with an attack on freedom, abuse of the Office of the Presidency, foreign policy decisions and inaction that not only make America a laughingstock, but also put us in danger, and economic policies that are negatively impacting the bottom line of American families around the country and creating burdensome debt and fewer opportunities for future generations.
Nowhere is the economic impact being felt more than in the black community. As a black woman, it pains me to witness so many caught up in the cycle of welfare and poverty, made worse by Barack Obama, continue to support and defend Obama. They dissolve him of any guilt and blame, many defending him to no end.
This video speaks volumes about just some of the issues plaguing the black community, and society in general. It documents a fight between two women at a welfare office. Children are present, but that doesn’t cause anyone to stop and rethink their actions. Also, rather than stop the fight or seem frantic at what is going on, someone starts filming with a smartphone while laughing. (Why does anyone getting welfare have a smartphone anyway? Maybe they have ‘Obama phones.’ But, that’s another story.)
While I don’t know what they were fighting about, one thing is certain – tensions are running high in Obama’s America everywhere, even within the black community at the welfare office. People get closer, but only to cheer her on and film. As one guy gets closer, maybe to stop the fight or maybe to just get a closer look, he is met with multiple punches by a group of girls who push him away from the fight.
This is a sad testimony to victims in Obama’s America. Even worse in this case, many of them probably don’t even realize they are victims of his big government destructive policies. They likely continue to blame Bush and view Obama as caring and benevolent.
Donald Trump Tells Americans to Prepare for “Financial Ruins”. http://www.moneynews.com 01 Jul 2014 By Newsmax Wires The United States could soon become a large-scale Spain or Greece, teetering on the edge of financial ruin. That’s according to Donald Trump, who painted a very ugly picture of where this country is headed. Trump made the comments during a recent appearance on Fox News’ “On the Record with Greta Van Susteren.” According to Trump, the United States is no longer a rich country. “When you’re not rich, you have to go out and borrow money. We’re borrowing from the Chinese and others. We’re up to $16 trillion in debt.” He goes on to point out that the downgrade of U.S. debt is inevitable. “We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before he gets finished. When you have [debt] in the $21-$22 trillion, you are talking about a downgrade no matter how you cut it.” Ballooning debt and a credit downgrade aren’t Trump’s only worries for this country. He says that the official unemployment rate of 8.2 percent “isn’t a real number” and that the real figure is closer to 15 percent to 16 percent. He even mentioned that some believe the unemployment rate to be as high as 21 percent. Donald Trump Tells Americans to Prepare for “Financial Ruins”.
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The president is increasingly finding that telling the Mr. Chairmanwoman to rig the market to all time highs does not translate to a comparable popularity rating. In fact, just the opposite.
While Obama's slide in the polls is nothing new, the latest data from the Quinnipiac University Poll is about as bad as it gets for the president: in fact, perhaps the only thing more shocking than Obama "surpassing" George W. Bush as the worst president since World War II is the onset of revisionism, with some 45% saying the US would have been better with Romney as president, compared to just 38% who say Obama remains the better choice. Which incidentally confirms what we reported yesterday: while the Republican view of Obama has certainly never been lower, what is worse is that even the core democrat faithful are now giving up on the hope and change bringer, confirmed by the latest Gallup poll which saw democrat confidence in the economy tumbling to the lowest level for 2014.
More from Washington Times:
With Mr. Obama deploying military troops to Iraq, failing to find compromise with Congress and seeing major defeats in the Supreme Court, voters continue to sour on him.
Quinnipiac found 45 percent of voters say the country would have been better off if Mr. Romney, the 2012 GOP nominee, had been election, while just 38 percent say Mr. Obama remains a better choice. Even Democrats aren’t so sure — just 74 percent of them told the pollsters Mr. Obama was clearly the better pick in the last election.
Voters also rate him the worst president since World War II, topping even his predecessor, President George W. Bush, who had left office with terrible ratings.
“Over the span of 69 years of American history and 12 presidencies, President Barack Obama finds himself with President George W. Bush at the bottom of the popularity barrel,” said Tim Malloy, assistant director of the Quinnipiac University Poll.
A Zogby Analytics Poll released Wednesday also found Mr. Obama slipping — in that survey, to 44 percent approval, while his disapproval leapt 4 percentage points from last month to reach 54 percent.
Nearly half of voters told the Zogby poll that Mr. Obama is “unable to lead the country.”
And now, back to hoping and praying that by rigging the Dow Jones above the "psychological level" of 17,000, voters will finally notice and give Obama his due.
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The number of Americans 16 and older who did not participate in the labor force climbed to a record high of 92,120,000 in June, according to data from the Bureau of Labor Statistics (BLS).
This means that there were 92,120,000 Americans 16 and older who not only did not have a job, but did not actively seek one in the last four weeks.
That is up 111,000 from the 92,009,000 Americans who were not participating in the labor force in April.
In June, according to BLS, the labor force participation rate for Americans was 62.8 percent, matching a 36-year low. The participation rate is the percentage of the population that either has a job or actively sought one in the last four weeks.
In December, April, May, and now June, the labor force participation rate has been 62.8 percent.
Before December, the last time the labor force participation rate sank as low as 62.8 percent was in February 1978, when it was also 62.8 percent. At that time, Jimmy Carter was president.
At no time during the presidencies of Ronald Reagan, George H.W. Bush, Bill Clinton or George W. Bush, did such a small percentage of the civilian non-institutional population either hold a job or at least actively seek one.
While the number of Americans not in the labor force increased, the unemployment rate dropped -- from 6.3 percent in April to 6.1 percent in June.
Bill Luckey, 59, estimates he has been working in the hog farming industry for 55 years – including the time he spent helping his dad on their family’s hog farm as a small child.
But since the Porcine Epidemic Diarrhea Virus (PEDv) hit the 600-head sow farm in Columbus, Neb., where Luckey is a partner, he said he’s faced challenges unlike any he’s seen in his years in the industry.
“We’ve gone through…different diseases, but a lot of those it seems you can work your way through them and keep rolling,” Luckey told FoxNews.com. “Where with this one, in talking to other producers, some of these guys still have an occurrence 20 to 30 weeks after the initial outbreak and still have a litter once in a while that breaks…It’s just frustrating from standpoint of we don’t know a lot about it.”
According to the U.S. Department of Agriculture (USDA), PEDV has killed approximately 7 million piglets in the U.S. since it was first identified in May 2013. PEDv is a coronavirus affecting swine, which causes diarrhea and vomiting. While adult pigs can become infected, the virus primarily targets piglets, and can have up to a 100 percent fatality rate. The virus does not affect edible pork products, and is not a threat to human health.
Luckey said PED-V first hit his farm in December 2013, causing them to lose a full turn of production – between 1,500 and 2,000 baby pigs.
“When you lose basically six to eight weeks of production, that means I have a pretty big hole in my operation,” Luckey said.
Other farmers throughout the Midwest have faced similar losses. Phil Borgic, 57, has been working in pork production for 40 years. When PEDv hit his farm in Nokomis, Ill., in January, he lost about 10 percent of his production for the year.
“It looked to be a good year starting out and now we’re going to be selling a minimum of 10 percent less for the year,” Borgic told FoxNews.com.
Borgic said he had been preparing for the virus to hit his farm. After it hit, he quickly encouraged the spread of the disease throughout his sows, hoping they would develop antibodies to the virus. However, it’s still unclear how long maternal antibodies to PEDv last – and Borgic said he’s prepared for a re-break of the disease.
“I’m not very optimistic that we’re going to be able to control it going into the winter again,” Borgic said. “But I’m hopeful we have a much lower incidence rate and the sow farms that do contract it will not have near the losses that we’ll have this past winter.”
On June 5, 2014, the USDA announced $26.2 million in funding to combat the spread of PEDv. The money will go towards supporting hog farmers in increasing their bio-security efforts, towards diagnostic testing and to support management and control of the disease. Other funds will be used to develop a vaccine for the disease and to be used for research into PEDv. While a vaccine was recently approved to fight PEDv, its effectiveness remains to be seen.
However, reports from veterinarians warn that the disease could worsen going into the winter months – and many questions linger as to the best ways to prevent and contain the disease, or why it affects some farms but not others.
Luckey said though he had been aware that PEDv was in the U.S., his farm was one of the first in Nebraska to be affected – taking him by surprise.
“We still don’t know where it came from, because we’re sort of isolated and it seemed strange as to why we got it,” Luckey said. “And so we’ve changed some protocols …we hope it does some good, we’ll find out with summer months coming on and warmer weather, hopefully the spread of this will slow down.”
While both Borgic and Luckey said their business will suffer this year, the higher price of pork will ease their losses. Both have made changes on their respective farms, including improving bio-security by implementing more thorough sterilization techniques in barns and in vehicles used to transport pigs.
“Right now, the pig health is very good, probably better than ever and that might just be because of the increased bio-security, cleaning buildings better, disinfecting twice, whatever it may be and being a little more aware of what’s going on and doing a little better job with the bio-security in the barns,” Luckey said.
However, the lack of information about the origins of the PEDv outbreak, and how best to control it, remains frustrating for those in the hog farming industry.
“Basically, we’re going to need research dollars to research a cure for something like this,” Luckey said. “But also we’re going to have to have coordination between the diagnostic labs so if there is an outbreak, communication can be rapidly put out through the whole industry as to what’s out there so we know what to look for right away instead of wondering, ‘What this is?’
Is this the reason for the blowout, on the surface, payroll number? In June the BLS reports that the number of full-time jobs tumbled by 523K to 118.2 million while part-time jobs soared by 799K to over 28 million!
Looking at the breakdown of full and part-time jobs so far in 2014, we find that 926K full-time jobs were added to the US economy. The offset: 646K part-time jobs.
Something tells us that the fact that the BLS just reported June part-time jobs rose by just shy of 800,000 the biggest monthly jump since 1993, will hardly get much airplay today. Because remember: when it comes to jobs, it is only the quantity that matters, never the quality.
... just in case there is any confusion why there is zero real wage growth (for two months in a row now), and why it will take a few more months before experts start tossing the word stagflation a little more casually.
Yesterday we heard from the CEO of the world's biggest company that the exuberant jobs data did not reflect any economic reality Wal-Mart was seeing. Overnight, William Arthur Tindell, CEO of The Container Store, further destroyed the myth of a 'recovery' stalled by 'weather' and threw the rest of his 'retailer' brethren under the bu:"We thought our sluggish sales were all because of weather and calendar shift...but now we've come to realize it's more than that, consistent with so many of our fellow retailers, we're experiencing a retail funk."
Container Store CEO William Arthur Tindell
"We thought our sluggish sales were all because of weather and calendar shifts in the fourth quarter. Going into this first quarter, we had whatever bug we had, weather and calendar shifts for Christmas that began last November and continued into the spring, but now we've come to realize it's more than just weather, consistent with so many of our fellow retailers, we're experiencing a retail funk, I mean, so many retailers that we talk to are experiencing that."
and from the Q&A
"We're certainly doing everything we think we should and can do to try to both improve traffic and average ticket. But in this sort of more tepid environment that we're in, we really felt as though the appropriate thing to do was to really lower that guidance for the next two quarters particularly in light of the fact that these -- some of these great initiatives we're talking about don't really have much of an impact to the shorter term. So, that was really sort of what drove our thinking, it's just -- we didn't want to unrealistically expect that trends would dramatically turn quickly."
and in his summary
"Our highest-end customer seems to be a little bit infrequently shopping us for some darn reason and so does the – I mean we have a very uneven economic recovery still. So for a long time it was the lower-end retailers we're suffering and the higher end, we're doing better and we were doing better. Now, it seems to be more democratic. It seems to be kind of across the board."
* * *
Simply put, if 'weather' had been to blame - as has been scapegoated by everyone - then there would/should be a massive buying surge in Q2 (which is absolutely not what firms like Wal-Mart and The Container Store are seeing)
Main Street and Wall Street are moving in opposite directions.
Individual investors are plowing money back into the U.S. stock market just as professional strategists say gains for this year are over. About $100 billion has been added to equity mutual funds and exchange-traded funds in the past year, 10 times more than the previous 12 months, according to data compiled by Bloomberg and the Investment Company Institute.
The growing optimism contrasts with forecasters from UBS AG to HSBC Holdings Plc, who say the stock market will be stagnant with valuations at a four-year high. While the strategists have a mixed record of being right, history shows the bull market has already lasted longer than average and individuals tend to pile in at the end of the rally.
"If Wall Street, after poring over all known data, comes up with a target and we're already there, and you still see individual investors buying and they're typically the ones that are late to the party, it would seem there is limited upside," Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a July 8 phone interview.
U.S. stocks slid from record highs last week, sending the Standard & Poor's 500 Index to the biggest drop since April, amid concern over financial stress in Europe and the timing of higher U.S. interest rates. The Chicago Board Options Exchange Volatility Index jumped 17 percent from a seven-year low.
Steady Gains
The S&P 500 rose 0.5 percent to 1,977.10 at 4 p.m. in New York as Citigroup Inc. rallied on better-than-forecast earnings. The benchmark gauge is up 7 percent for 2014, compared with a 3.5 percent advance in the Bloomberg Commodity (BCOM) Index of 22 raw materials and 3.3 percent gain for the Bloomberg U.S. Treasury Bond Index. (BUSY)
For most of this year, equity investors have seen little volatility and steady gains, giving them confidence to put money back into the market. Individuals deposited about $9.5 billion in June to stock funds and have added cash in eight of the past 10 months, data compiled by ICI and Bloomberg show. That's a reversal from the five years through 2012, when $300 billion was withdrawn.
Blue Skies
Professional investors, such as Nick Skiming of Ashburton Ltd., say that individuals investors are attracted to stocks after seeing others getting rich from a big rally, a time when equities are usually overpriced. The bursting of the technology bubble in March 2000 was marked by mutual funds absorbing a record $102 billion in the first quarter.
"As institutional investors, we're always concerned when the retail investor is actually arriving in the market," Skiming, who helps manage $10 billion at Ashburton, said by telephone from Jersey, the Channel Islands. "The retail investor arrives when they can only see blue skies."
For Laszlo Birinyi of Birinyi Associates Inc., stocks have entered what he calls the exuberance phase, the last of four stages usually seen in bull markets. He still sees more gains to come, citing the skepticism on Wall Street as a sign that plenty of investors haven't bought shares yet.
The track record of equity strategists as a whole shows the difficulty in predicting stock prices. About half of the time, the S&P 500 ended the year more than 10 percent away from the average level predicted by strategists in January, according to data compiled by Bloomberg since 1999.
Birinyi expects the S&P 500 to keep advancing as bears capitulate and pick up stocks.
Durable, Sustainable
"This is a durable and sustainable bull market," he said in a July 9 phone interview from Westport, Connecticut. "It's going to surprise us because I still don't think we've got to a point where water is boiling yet."
Birinyi, one of the first analysts to advise clients to buy when stocks were bottoming after the 2008 financial crisis, predicts the S&P 500 will rise to 2,100 (SPX) by December.
Goldman Sachs Group Inc. raised its S&P 500 forecast today to 2,050 from 1,900. Rising earnings and faster economic growth will push equities higher and stocks are still attractive to bonds, according to a research report from David Kostin, chief equity U.S strategist at the bank.
Wall Street strategists are more cautious with forecasts implying the S&P 500 will rise 0.5 percent by year-end to 1,986, the average from a Bloomberg survey of 19 investment firms.
Set Back
The end of economic stimulus from the Federal Reserve will lead to more stock-market volatility and lower returns, according to Julian Emanuel, a U.S. equity and derivatives strategist with UBS in New York. Minutes released last week from the Fed meeting in June showed officials agreed they'll end their asset-purchase program in October if the economy holds up.
"When you're making a transition away from the Fed being the primary driver to corporate profits and a growing economy, it's more muted returns," Emanuel said by phone on July 10. "Stocks will pause or set back a little."
Relatively expensive valuations will also limit future gains, according to Garry Evans, HSBC's global head of equity strategy in Hong Kong. He said in a report last week that the S&P 500 will finish the year at 2,000, a 1.6 percent gain from last week's close. The index trades at 16.6 times projected earnings, near the highest level in four years, data compiled by Bloomberg show.
Earnings Season
Investors will get more clues about the health of the economy during the next two weeks with more than 200 companies in the S&P 500 releasing quarterly results. Profit probably rose 4.5 percent in the three months through June, analyst estimates compiled by Bloomberg show.
The bull market, which has almost tripled the S&P 500's value since 2009, is closer to the end than the beginning, said Walter Todd, who oversees about $980 million as chief investment officer at Greenwood Capital Associates LLC. The rally has lasted 64 months, about a year longer than average, according to data since 1962 compiled by Birinyi and Bloomberg.
"To the extent that investors start to put a lot of money into the market, it would certainly be late," Todd said in a July 9 phone interview from Greenwood, South Carolina. "But to say that the end is going to happen in the next few months, I don't agree with that."
If you're in mutual funds, look at the YTD performance. If it's not knocking your socks off, get out of the fund.
"Far better it is to dare mighty things, to win glorious triumphs even though checkered by failure, than to rank with those poor spirits who neither enjoy nor suffer much because they live in the gray twilight that knows neither victory nor defeat."
-- Theodore Roosevelt
Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 95 percent of the population had less wealth.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.
For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.
“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.
The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss.
My household, while worth more than it did in 2003, still feels the loss in dollar value. Instead of under $100 in groceries, it's now $140.00. Instead of $30/week in fuel, it's $80. Instead of $2500 in property tax, it's $5000.00. Instead of 10.5 cents per killowatt it's 11.3. The cable bill used to be $30/month, now it's $60 and I don't have any more channels, it's just that I get to pay for HD and a DVR. My phone bill in 2003 was $33.50/month. Today it's $130.00.
It's like every company is a giant tick, feeding off me and every year, they suck more and more.
"Far better it is to dare mighty things, to win glorious triumphs even though checkered by failure, than to rank with those poor spirits who neither enjoy nor suffer much because they live in the gray twilight that knows neither victory nor defeat."
-- Theodore Roosevelt
As Talks Falter, Bond Default by Argentina Appears Likely
By ALEXANDRA STEVENSON July 30, 2014 10:58 am Photo Graffiti in Buenos Aires says, “No to the payment of the debt.” Hedge funds have won court victories demanding full payment on the bonds.Credit Marcos Brindicci/Reuters
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Updated, 6:38 a.m. | Barring a last-minute deal, Argentina will default on billions of dollars of bonds on Wednesday.
It would be Argentina’s second default in 13 years. But unlike the last time, when scores of unhappy Argentines took to the street as unemployment rose to 25 percent and inflation soared, this default would look decidedly different.
Argentina’s equity, bond and currency markets, which have been volatile in recent days, would certainly feel a jolt. The government and Argentine companies, which have been largely locked out of global markets since the last default in 2001, would find it even harder to raise money. And the economy, which has struggled with stagflation for years, would most likely slow further.
But the reaction will probably be muted because this default is not a surprise.
“This is kind of a chronicle of a default foretold,” said Arturo Porzecanski, director of the international economic relations program at American University, referring to the novella by the Colombian writer Gabriel GarcÃ*a Márquez, “Chronicle of a Death Foretold.” Photo “Enough vultures, Argentina united for a national cause” reads the sign in Buenos Aires.Credit Enrique Marcarian/Reuters
A default has been in the making since a group of New York hedge funds gained significant victories in American courts, where they are demanding that Argentina pay them in full on government bonds that defaulted in 2001.
As in Mr. GarcÃ*a Márquez’s books, the hedge funds’ battle against Argentina is full of unusual twists.
In a pivotal ruling, Judge Thomas P. Griesa of Federal District Court in Manhattan said that Argentina could not continue to make regular payments on its main class of bonds — whose investors had agreed to accept a lower amount than they were owed — without paying the hedge funds. A payment is scheduled for the main class of bondholders on Wednesday. Argentina, however, has insisted that it will not cave into the demands of the hedge funds, which it has called vultures.
“It would be a shocking surprise,” Mr. Porzecanski said, “if Argentina pulled out their pocketbook and paid” the hedge funds. Photo Judge Thomas P. Griesa told Argentina and the hedge funds to meet “continuously until a settlement is reached.”Credit Pablo Corradi/La Nación
But late on Tuesday night another unexpected twist occurred. A mediator appointed by Judge Griesa announced that Argentina’s negotiators, led by the country’s economy minister, Axel Kicillof, had held discussions with representatives of the hedge funds for several hours. This was the first face-to-face meeting between the two sides under Daniel A. Pollack, the so-called special master who was appointed by the court in June. “There was a frank exchange of views and concerns,” Mr. Pollack said in a statement. “The issues that divide the parties remain unresolved.” He added that it was not clear whether the two sides would meet again on Wednesday.
Argentina’s main class of bond holders are most likely hoping that the last-minute talks might lead to a breakthrough that will prevent a default on their bonds.
The country’s predicament today is inextricably linked to its default in 2001 and events after it. Argentina’s economy in 2001 was in dire straits after four years of recession. Unable to continue making payments on loans from foreign creditors, it was engulfed in debt before it declared a formal default. Photo Hedge funds, led by Paul E. Singer’s NML Capital, are seeking $1.5 billion in repayment, including interest.Credit John Minchillo/Associated Press
Through two restructurings, the government eventually struck a deal with a majority of its bond investors, who are now called exchange bondholders because they exchanged their bonds for ones that were worth as little as a fourth of the value of the original securities. The hedge funds, known as the holdouts, declined to participate in the restructurings. Instead, the funds, led by Paul E. Singer’s NML Capital, are seeking $1.5 billion in repayment, including interest.
Judge Griesa’s ruling in 2012 was later upheld by the United States Court of Appeals for the Second Circuit. Then in June, the United States Supreme Court refused to consider Argentina’s last appeal. Judge Griesa gave Argentina a 30-day grace period on a scheduled June 30 payment to its main exchange bondholders.
In defiance of Judge Griesa’s ruling, Argentina in June deposited $539 million into the Bank of New York Mellon, the trustee handling the bond payments, in an attempt to meet its exchange bond payment.
But Judge Griesa ruled that if Bank of New York Mellon made the payment, it would be in contempt of court.
Argentina has also asked the judge for a stay on his 2012 ruling, arguing that a delay would help it to negotiate a deal. On Tuesday, a group of investors of Argentina’s euro-denominated exchange bonds urged the judge to issue an emergency stay on his ruling. But this is unlikely to be granted unless the holdouts request it, analysts said, or the court-appointed mediator, Daniel Pollack, recommends it. Photo President Cristina Fernandez of Argentina at a trade summit in Caracas, Venezuela, on Tuesday.Credit Fernando Llano/Associated Press
In depositing the next installment of bond payments, the Argentine government has said that a default would not be its fault, a claim that has gained it political mileage. In a speech last week, the country’s president, Cristina Fernández de Kirchner, conveyed this belief. “They’re going to have to come up with a new name,” she told an audience, referring to the word default, “a new term that reflects the fact that the debtor paid and someone blocked it.”
Also last week, Judge Griesa ordered the Argentine delegation and the holdouts to meet with Mr. Pollack and talk “continuously” until an agreement was reached.
The response from Argentina was tepid; the delegation met twice with Mr. Pollack last week before returning home to Buenos Aires for the weekend to consult with the government.
Argentina’s lack of enthusiasm had prompted some lawyers and analysts watching the case to question whether Argentina actually wants to avert a default.
“If you’re picking a default as a rational avenue, it is because you have decided two things,” said Marco E. Schnabl, a partner at Skadden, Arps, Slate, Meagher & Flom who is not directly involved in the case. “One, that picking a fight with the American legal system is politically convenient, and two, that the cost of settling with holdouts and everyone else who still has unpaid bonds is vastly greater than the costs of having to take a default.”
But even with that thinking, the picture is anything but clear because some of the legal theories behind the contracts governing Argentina’s debt have not been tested.
Argentina has said, for example, that if it agreed to a settlement, it could be on the line for as much as $15 billion in holdout investors’ claims. That is because any deal would have to include all holdouts, even those not represented in the case.
In such a case, bondholders who exchanged their defaulted bonds for discounted ones might also have the right to demand the same compensation terms, according to a clause in the bond restructuring terms that expires at the end of this year.
On the other hand, if Argentina does default, it runs the risk of more lawsuits, said Siobhan Morden, head of Latin America strategy at Jefferies. In many ways, this is perhaps the most significant implication of a default.
If enough bondholders from one class of exchange bondholders agree, they have the right to “accelerate” their bonds after Argentina misses its July 30 payment. They could then pressure the government to pay the full amount of their discounted bonds quickly, Ms. Morden added. This could mean a payment of as much as $28.7 billion to those bondholders, according to estimates by JPMorgan.
“With acceleration, you know everyone has a gun,” said Anna Gelpern, a law professor at Georgetown University. “The question is. Will they shoot?” But, she added, if Argentina agreed on a settlement with the holdouts, that could prompt lawsuits from exchange bondholders seeking the same terms. In that case, she said, “You don’t know if there is a gun, but if there is, it is a bazooka.” Peter Eavis contributed reporting.
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Re: Financial Crisis - 2013 - ????
Originally Posted by American Patriot
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