

Argentina’s debt default

Caught napping

Hold-out creditors seize an Argentine ship in Ghana

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Readers' comments



This is an act of war! ... The Libertad is a war ship and it should at least try to flee or put up a fight...capitulating without a fight will demoralize the armed forces, its citizens and make a joke of the nation...win or lose you would become heroes and always be remembered as such... never back away from a fight...specially with Ghana?


Debt avoidance forces people to live in isolation.It is always better to deal with your creditors and pay off in instalments.An individual would have to face baillifs or even jail.I believe in Argentina,the banks and companies do the same .I`m sure countries could come to an agreement if they want to.Individuals borrow money with extorbitant rates because they think a gamble is going to pay off.People expect better behavior from countries. The sad part is that other countries like Greece advocate the Argentine position .


The Elliott Management group is rubbish. Although I don't agree with Argentina's avoidance on debt, they go around buying this debt for pennies, sue and get fortunes out of it. Buying high risk debt such as they do, mean they must accept default on a majority of it, instead of relying on lawyers to weasel their pay days on these purchases of bad debt. Legal as it may be for now, Elliott's practice must also be stopped!Though I doubt it will as there are other forces that come into play with Mr. Singer and his connections, I'm sure.


The ship is not a collateral.
Compare to China trying to collect 1 trillon dollars from the USA..
China won't take ships or drones...because are worthless..
A country debt is not guarantee for payment...I thought everyone knew it!

1 Kyat Drone

Vulture hedge funds and their lawyers are hilarious.

1 Kyat Drone in reply to Brian Pelican

Well if I purchased debt for 3 cents on the dollar and then tried to force the debtor to pay me 100 cents on the dollar by unleashing my vulture lawyers on said debtor then yes, I would believe that my actions are incredibly hilarious.


I don't know if that ship will be liberated by Ghanian authorities.

I don't know what Argentine Government will do to liberate it.

But I'm sure that current Argentine Government, the next Government, and every Government which will take power in the future, never will recognize the whole public debt, never, mainly when 95% of it was changed and acepted by investors around the World.

These two funds can't win, they haven't any chance.

PS: The truth is TE doesn't mind an Argentine ship caught in Africa. TE wants to do a warning for European countries in troubles.

Unasur in reply to Brian Pelican

"I would lend to a European country any day before Argentina."

Well, that's what big banks think, and they have decided lend money to European countries. So they bought german and danish bonds with no yield or spanish and at the same time bought portuguese and irish bonds which those countries can't pay.

The point is big banks don't mind what could happend with the money invested, because it's people's money (for the retirement and others) and at the end, there are people like you to rescue them.

But people like you will be happy, because you will read TE and you'll think European authorities have avoided be like Argentina.

Brian Pelican in reply to JorgeNewbery

Silly boy.

Russia is an east European country.

And talking about "guys like me", I have traveled to 38 countries and lived in 4.


And talking about my investments, I am a very early retired senior financial executive from the energy sector who is living extremely well on a very handsome portfolio and a significant corporate pension.


But then I see your motive. What else would a boy named Jorge say?

A chunk of the world's people are so droll.

Brian Pelican in reply to Unasur

"People like you" seem to think that because Argentina defaulted on its debt of almost $100 billion ten years ago, that somehow there should be no repercussions now. Somehow that debt has been waived? Very dishonorable - and very South American.

How would you like it if someone walked away with impunity from a debt to you. Well, I imagine you would not like it at all. But then that would be different. Wouldn't it? Self, self, self.

I would be just as supportive of a bank, or their surrogate, going after the assets of a European country which defaults on its debts as I am to see this ship impounded. When you don't pay your debts to whoever, other people suffer. And why the hell should they? Is there no more honor in the world?

The American government should confiscate any Argentinian financial assets there are in the US until this debt is repaid. And that also includes the aircraft of Aerolíneas Argentinas, wherever they may be in the world. That would send a very strong lesson to all those who think they can get away with not paying their debts.

And, of course, with a moniker like you have, self interest.

It disgusts me.

latinaview in reply to Brian Pelican

HA! "Retired senior financial executive from the energy sector with a significant corporate pension"
A blinking corporate carrerist that has never risked a penny of his own money in a proper enterprise. Your "portfolio", did it happen to loose some money on Argentine bonds by any chance or are you part of the vulture fund slimeballs club?

Non-Extremist in reply to latinaview

So speaks the consumer of the sourest of grapes. Latinaview, you can't refute Brian Pelican's argument, so you resort to cheap shots based on your own supposition? Why don't you just build a scarecrow in your backyard and beat it with a stick?


If Argentina had a navy, the friagte would have sailed home long ago. But since the communists that have taken over the country have dismantled its armed forces in their quest for vengeance, utter submission, and prevention of another (well earned) coup to remove them from power before they destroy the country (too late!), the UK, the Royal Navy and the Kelpers have no fears whatsoever, and the bad Argies are now but a bad memory. Fortunately Chile, their benign neighbor, is ready to help at all costs, with their powerful British supplied navy, and US supplied army and air force. Chile could invade Argentina tomorrow, and punish it on behalf of Britain with absolute impunity. In the meantime, terrorist groups like La Campora, and Vatayon Militante, which recruits dangerous criminals in prison, and through the incompetence of the courts, allow them to rob, kill, and attend mob violence events, and be back in the cell by tea-time, control the country the same way Hitler's Storm Troopers enslaved Germany's population and engineered some of the world's worst acts of genocide. Before the end of this decade, Chile, Britain and the USA will be forced to invade Argentina to de-nazify or un-peronize the nation and the population just as they did in World War II. Brazil will not stand in the way.

latinaview in reply to Manney

I can understand you fantasising about the future, we all have our share of demented day dreams, but please leave the past in peace. As far as I'm aware, Argentina was not invaded by either Chile, Britain or the USA during WW II, or perhaps my education is missing a chapter? Please elucidate.

Brian Pelican in reply to latinaview

" As far as I'm aware, Argentina was not invaded by either Chile, Britain":

Two points:

1. Argentina had better not stiff Chile for $81 billion or they may take more than the Libertad. They might just annex Buenos Aires, assuming it is worth that. I lived in Chile for 4 years in the 90s, they are an honorable people who pay their debts and expect others to do so as well. But I would expect they would not be silly enough to lend Argentina anything.

2. Talking about the UK not invading Argentina during WWII, I seem to recall that the UK kicked Argentina off the Falklands Islands rather impressively. What a gall Argentina had and they must have thought that the UK wouldn't react. Kind of reminds me about the gall Saddam Hussein had in dissing the US. He might still be alive today had he not badly miscalculated.

romdems in reply to Manney

I am confused.

Are your perhaps overstatig the situation?

Why would Britain and the US and Chile go to war with such a large and isolated nation (it borders on just four other nations and has reasonable relations with all of them)?

Also, I do not see any evidence of a widespread fascist culture that requires an invasion.

Also, the dispute is with the government, not the Argentine people

Alan101 in reply to JorgeNewbery

I always am amazed at how history is modified to suit local needs. Your view Jorge, is a result of brain washing, I fear. The Argie forces who had been so tough and macho attacking students were found wanting in the Falklands conflict. In fact, when the butcher of Córdoba, Gral Menendez, dressed up as the lamb of Port Stanley, rapidly surrendered, there were far more Argie prisoners than Brits. Rapid deployment bank to BA was necessary since there was not enough food to feed all. "The Navy was close to defeat" sure!


Argentina has stiffed anyone and everyone foolish enough to loan it money, buying stock in Argentine corporations, or making any investment in the country. This has been going on since the end of WW-2, and the government has become expert in fleecing the foreigners. I'm delighted to see someone putting the heat on the government for a change. Cristina Kirchner is screwing her own citizens at present, controlling the amount of foreign currency they're allowed to take out of the country for travel or purchases.

Manney in reply to KennethPrice

In retrospect, it would have been a good idea to re-re-elect Carlos Menem in 1999 for another 4 year term. Or had he run against Nestor Kirchner in 2003 instead of chickening out, this entire mess would have been cleaned up and sorted out in an orderly and honorably fashion. In 2011, aided by a fragmented and inept opposition (they are good at OPPOSING, and at times WINNING elections, but once elected, they seldom finish their terms), and Argentines voting using the head between their legs, not the useful one, the Jiang Qing of Argentina, Cristina Kirchner, was re-elected despite inflation, corruption, the curtailment of freedom, and the lack of foreign investment. After her "glorious victory" of the Dear Leader (blessed be Her Name) over some snot-nosed spoiled drug addled un-patriotic rich kids at Georgetown and Harvard, the powerful Argentine Navy, whose history is the Envy of All Navies, will bomb Ghana and NML Capital into submission, and return the frigate to home port. - Watch the news over the next 2 weeks! - Either that, or the frigate will accumulate so much debt in port fees (USD $50K /day) that NML Capital will have to sell it for at least $200 million in order to break even and recoup the repossession costs.


Detaining a naval vessel from a foreign country can be construed as an act of war. Fortunately Argentina has acted responsibly and tried to go through the courts. It remains to be seen what will happen if Ghana actually tries to seize the vessel...

JorgeNewbery in reply to guest-iaolsjm

When Iran bombed the Israeli embassy in 1992 and later AMIA in 1994 - THOSE were acts of war against Argentina. To witness Cristina Kirchner nowadays smooch with Irani government officials, knowing that the mastermind of those two attacks is a current member of that government is nothing less than treason on Cristina´s behalf.

The frigate in Ghana? Who gives a sh*t.

Rikki Nadir in reply to guest-iaolsjm

Dear guest-iaolsjm, if Argentina is victim of an act of war she can only retaliate with sticks and stones. While this *is* military feasible, it is a lot of work, so the gov't retaliates with a battery of monumentally stupid international declarations, which may eventually cause 1)the aggressor to die of a heart attack, if he is too sensitive to outrageous stupidity; or 2) the aggressor to die of a fit of laughing. Fortunately, we have not been victims of acts of war, and no casualties are to be regretted for outrageous stupidities, which are routinely uttered by gov't officials anyway.

Manney in reply to guest-iaolsjm

Argentina has to go through the courts (but you and I know it will never work) as it no longer has a navy since the Kommunist dictators took over the country. I hope this national embarrassment will get people out in the streets, bravely demanding - like they did in 2001 with Fernando De La Rua - the resignation of the Queen and her entire cabinet and consorts.... then again, Argentina did not EARN its freedom, democracy or Libertad the way the Arabs did, or the Eastern Europeans did in the 1980s and 1990s. If anything, Argentina owes it undeserved "democracy" to Margaret Thatcher and the Royal Navy task force, who put the Tin Pot Dictators in their place (though I dispute the historical UK claim - negotiations, even if they took 50 years, would have been preferable to the unfortunate bloodshed) . ... In the 7-8 years of military rule, not one single peronist or radical civic union leader demonstrated for the return to democracy. In my view, Chile's Augusto Pinochet - either because he learned from the history of other military dictators, or because he had one hell of an advisory board guiding him- was the ONLY "bad general" who actually FIXED his country and left it BETTER than when he took over. AND he ceded power PEACEFULLY instead of thorough another coup, death or revolution. Maybe what Argentina needed were at least another 10 years of military rule like Chile or Brazil to get its house in order. Just to show you that like money, unearned democracy is not given any value until it is lost.


So the Argentine government get a feeling of what it was like to be one of their bond holders, there is a kind of justice to this. Maybe Elliot should confiscate Cristina Fernandez the next time she's in the USA and sell her to the highest bidder. It would certainly save the people of Argentina billions of dollars and stave off a lot more problems down the road.

latinaview in reply to taghairm

taghairm, are you one of those characters that think that lending money should be a risk free business? It never has, never will be. Variable interest rates and face values take care of the risk angle, remember? Your false moralising is disingenuous, if you want your money to be absolutely safe, keep it under your mattress.

Dwrig in reply to latinaview

As per my comment below to Unasur, borrowing money and then defaulting should also not be a risk free business. Maybe next time through EM's work Argentina will think twice before defaulting.

At the end of the day EM are doing nothing outside of their legal rights and responsibilities to shareholders. Be nice if the borrowers acted the same....

Anakha82 in reply to latinaview

It should not be risk-free, but default should only be a possibility when the debtor is unable to pay. A debtor should not be allowed to walk away from its obligations simply because it wishes not to pay.

latinaview in reply to Anakha82

Do you think Argentina was in a position to pay in 2001/2002? No it wasn't, its currency had collapsed, bartering was the order of the day and local government pseudo currencies were in circulation. Its rate of debt to GDP was over 120%, default was the only option open. Unlike Greece, Spain, Ireland, etc., it had no alternative escape mechanism open to it.
The Economist article explains the rest of the story.

Brian Pelican in reply to latinaview

When you lend money you expect to be paid. providing you are dealing with an honorable debtor. Which Argentina clearly is not. And if your comments are anything to go on, neither are you.

Now if the US had stiffed the Argentina government, then of course your story would be different.


Why doesn't Argentina have another go at grabbing the Falkland Islands seeing as that worked out so well before?

Brian Pelican in reply to JorgeNewbery

"You can´t compare a debtor person with a debtor nation. Not morally, juridically or otherwise."

And why the hell not. A debt is a debt and it deserves to be repaid unless the country is bankrupt and the last I heard Argentina was not, at least not yet.

JorgeNewbery in reply to Brian Pelican

So you feel personally responsible for the 16 trillion+ USD debt your government has accumulated over the past decade? That is good to know. I might add that printing your way out of such debt is equal to stealing. Try to stop Bernanke from doing just that and see how far you get.

These problems aren't as simple as some people - like yourself - like to portray them. But, I guess, ignorance is bliss.

Anakha82 in reply to latinaview

First, the Libertad was seized in 2012, not 2002. Second, Argentina should not be entitled to unilaterally impose a debt settlement on its creditors, which is why the court in New York rightly ruled against it.


"Among the buyers was a fund run by Elliott Management, a New York-based outfit with a history of wringing money out of bankrupt countries. In 1996 it bought $11m of defaulted Peruvian paper, which allowed it to win $58m in court awards. Soon after, an Elliott fund spent $2.3m on the debt of Congo-Brazzaville. In 2005 it used this to intercept $39m from a state oil sale."

Well, it puts clearly what we are talking about. They aren't fund which they were defrauded. They knew the circumstances they bought.

They're very different to a investor, those funds aren't investors.

"Argentina has reacted furiously to the seizure. The government called the fund “unscrupulous” and a “vulture”"

Wrong, that's a very common expression for funds which try to win in desperate situations.

Those funds are mainly in London and New York, and they usually read TE.

Dwrig in reply to Unasur

Or maybe they play the role of the financial police, tasking reckless governments that borrow money and then think they can just default without consequence.

There has to be balance. EM are taking losses, they haven't gotten their money back and they're spending millions in recovery costs.

Try not paying your mortgage and see what the bank does....

latinaview in reply to Dwrig

And when the lender bank you owe the money to behaves irresponsibly and looses its capital base, tell me, what happens? Ah, ...yes, we, the taxpayers bail them out. Strange double standards, wouldn't you say?

Dwrig in reply to latinaview

Thanks for the reply. My last post on this subject. I do see where you are coming from, but you must remember not all were bailed out, quite a number of banks have disappeared. The US government took equity in the banks it did bail out and has made a handsome profit in some cases.

With respect to this article, some creditors took a write down on the bonds, some chose to pursue other avenues. All legal. Our 'feelings' on the subject are quite mute.

Final two points, 1) Argentina doesn't seem to have learned any lessons and continues to behave recklessly, and 2) My apologies on behalf of Brian Pelican. Name calling to make a point is just not cricket. Not all gringos are that rude.

latinaview in reply to Dwrig

As I don't know the exact details of monies invested/recouped by the American state in the private banking system, I'm not in a position to agree or otherwise on that part of your statement. Nevertheless, what is indisputable is that the indirect economic costs the USA economy has had to bear (due to its too big to fail subsidies to the financial sector) are enormous. Lost GDP alone must be running close to two trillion dollars. And yet, nothing much has been done to curtail the gambling financiers in the United Sates.
The Argentine government, on the other hand, has not borrowed in the international markets since 2003, it has run a budget surplus every year since then and it has scrupulously kept to the renegotiated repayment terms on its outstanding international obligations. So, regardless of what you might think, some lessons have been learned.

latinaview in reply to Brian Pelican

Pelican, little man boy troll, get a message into your thick skull: Argentina doesn't need your money. And anyway, it isn't your money really in the first place, is it? You haven't got any, you've just got a pile of debts and a red hot printing press that churns out greenbacks.


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