Debt Rattle Aug 12 2014: The Lost Art of Empire
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NPC Penn Oil Co., Massachusetts Avenue and North Capitol, Washington DC 1920 I can’t seem to get away from Ukraine and Iraq lately. Don’t know if I sh
[See the full post at: Debt Rattle Aug 12 2014: The Lost Art of Empire]“When it comes to a bilateral relationship with a sovereign country and the violation of its immunities, it is necessary for the executive branch to intervene,” Capitanich said. “The executive has a monopoly on relations with other countries.”
So, the Executive should trump Contract Law?
And where would that lead? In the Executive trumping all Rule of Law?
Brave New World we have here.
Professor – the Executive should not trump Contract Law, yet it’s being done all over the place now. Many banks should have gone under, people who bit off more than they could chew should have lost, bankers should be in jail (i.e. Goldman failing to disclose to investors that a particular CDO was handpicked by John Paulson, and that he took a short position, as one tiny example), and on and on and on. In the past 6 years, when has the law been sacrosanct? Not much.
“These New York-issued bonds of the 1990s had two other important features besides being issued under New York legal jurisdiction. The incorporation of the paripassu clause and the absence of the collective action clause. The paripassu clause holds that Argentina agrees to treat all creditors on equal terms (especially regarding payments of coupons and capital). The collective action clause states that in the case of a debt restructuring, if a certain percentage of creditors accept the debt swap, then creditors who turn down the offer (the “holdouts”) automatically must accept the new bonds. However, when Argentina defaulted on its bonds at the end of 2001, it did so with bonds that included the paripassu clause but which did not require collective action by creditors.”
No Tears For Argentina—-But A Swift Kick To The Greenspan Fed Is Warranted
The judge is probably following the letter of the law on this one, and Argentina, it looks like, was stupid for issuing bonds with the paripassu clause (perhaps the language difference explains their mistake?). Still, I find it difficult to swallow that some hedge fund boys who bought the bonds on the cheap are going to make out like bandits, especially when it seems the whole world is being bailed out.
If Argentina had U.S. counsel at the time they did this, perhaps they can go after them. Somebody made a terrible mistake on Argentina’s behalf. Who counselled them? Who benefited? Who benefited by issuing bonds with the paripassu clause versus the collective action clause? I sure as hell know it wasn’t the poor people of Argentina.
This stinks. Like the Goldman/John Paulson scheme cited above, perhaps it was the same type of thing.
Thank you Raúl.
Here is an article in Dutch by a journalist who has actually visited the other side in Ukraine. My wife – who is Russian – told me about it.
‘Kiev’
will lose it’s war, even in winning it’s battles. For the west to win, allies to US interests must be drawn in to the situation. Putin needs only to remain aloof, for economics and the cold of Russian winter to allow dissenting internal Ukrainian political pressures to grow.Three points to make, and no time to make them.
1. What will the absence of any response to Dr Euan Mearns’s letter signify? That he wasted his time writing?
2. Lake Mead Article from ZeroHedge:
https://www.zerohedge.com/news/2014-08-12/las-vegas-will-go-dry-if-water-levels-drop-7-further-lake-mead-hits-record-lowsA commenter calling himself “magnumpk” linked this:
https://www.usbr.gov/lc/region/g4000/hourly/mead-elv.htmlSeven feet to work with and dropping four feet a month? It’s gonna be a long wait for the Spring runoff from the western slope of Colorado.
3. Social Security is financed via paycheck confiscations. Ayn Rand paid into Social Security, so her collecting from Social Security does not entirely constitute a violation of her principles.
Ayn Rand got an awful lot right. Condemning her because she was liked by Greenspan strikes me as being both unjust and unsound. After all, I can think of plenty of terrorists from every religion who claim to like God.
Lake Powell to the rescue. At least for now, they claim to have the Lake Mead situation under control.
https://www.mail.com/news/us/3042436-water-headed-to-struggling-lake-mead.html#.7518-stage-hero1-4
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