Take physic, pomp

Something that’s held up really well is…

…IKN’s call on Argentina’s bond default back in July 2014 (somebody reminded me about the post today and I just re-read it). When the whole issue was hot we asked “who cares?”, we answered “very few people outside of the vulture funds”, we explained why. Here we are nigh on a year later and surprise surprise, nobody cares whether Argentina’s in default or not. The link is here, the essence is in the wrap-up:

“The bottom line here is that Argentina doesn’t need to pay and it can fall into default, because 1) the consequences for the country are much better than the chain reaction that it might (repeat might, lot of discussion over RUFO right now) set off if it pays and 2) the consequences for the country really aren’t that bad even compared to a neutral position. 

“…this is at least part of the point I alluded to a couple of days ago in this post, the bit about the difference between the law and justice. Yes for sure the law says that Argentina defaults and it’s in the wrong, but only according to the eyes of the law, which in this case is personified by a dusty idiot of a biased judge in New York who should have been put out to grass a decade ago and is showing signs of Alzheimer’s. Therefore Argentina can and indeed will ignore this book-driven law and bide its time until the real terms of agreement are struck and that will only happen via true justice, a far more powerful thing than a mere law.”

whole thing here

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