Should Argentina Now Pay the Ransom to Its Hostage-Takers?

[Judi Lynn]

Should Argentina Now Pay the Ransom to Its Hostage-Takers?

Posted on February 12, 2016 by Yves Smith

By Jeremy Smith, a Co-Drector of PRIME and a barrister, and Jorge Vilches ([e-mail]), a financial op-ed columnist based in Buenos Aires, Argentina. Originally published at PRIME Economics

When it comes to dealing with hostage-taking and ransom-paying, governments always say publicly “we will never negotiate” with terrorists and criminals, because it sets a bad precedent, and encourages other bad guys to do yet more hostage-taking and ransom-demanding.

But this logic does not seem to apply in the field of sovereign debt and vulture funds. The advice, in this field, is always “do the deal, pay up, however unfair the situation and however usurious the amount”. [1]

So with Argentina and the ransom demanded from its people by the US vulture funds (which themselves, let us recall, never lent a single dollar to Argentina).

More:
http://www.nakedcapitalism.com/2016/02/should-argentina-now-pay-the-ransom-to-its-hostage-takers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[Travis_0004]

1. How does making a loan, then asking for payments equal a hostage situation?

They didnt seem to mind spending the money so they should repay it.

[COLGATE4]

2. And THAT is the million dollar question that you're not

likely to get answered. What you will hear is something to the effect that 'the government that took out those loans wasn't truly responsive to the people's wishes (whatever that means) so the government now has no obligation to repay those loans. In addition, because some of the original bondholders cashed out for pennies on the dollar, the people that didn't cash out and the people who bought up the original bonds should not be entitled to collect on them, either. I know - it doesn't make sense to me, either.

[Travis_0004]

3. Then let them default

Just dont complain when future loans are at a 15% rate.

[COLGATE4]

4. i fully expect them to. nt