Understanding Argentina’s Coming Default


link

12 more hours...
http://www.economist.com...7/economist-explains-22

It could be said that Judge Griesa had to do little more than read the contract that Argentina offered its creditors. In spite of this, much has been said in Argentina (and abroad) about how Judge Griesa’s ruling damages the legal security of sovereign bonds and debt restructuring.

The problem is not Judge Griesa’s ruling. The problem is that Argentina had decided to once again prefer deficits and unrestrained government spending to paying its obligations. Griesa’s ruling suggests that a default cannot be used as a political tool to ignore contracts at politician’s convenience.

A ruling favorable to Argentina’s government would have allowed a government to violate its own contracts, making it even harder for poor countries to access capital.

We can simplify the case to an analogy on a smaller scale. Try to explain to your bank that since it was you who squandered your earnings for more than a decade,you have the right to not pay the mortgage with which you purchased your home. When the bank takes you to court for not paying your mortgage, explain to the judge that you are a poor victim of evil money vultures and that you have the right to ignore creditors because you couldn’t be bothered with changing your unsustainable spending habits. When the judge rules against you, try to explain to the world in international newspapers how the decision of the judge is an injustice that endangers the international banking market (as the Argentine government has been doing recently). Try now to justify the position of the Argentine government.

When i read that statement by KTB i assumed they meant Arrivals and not tourist arrivals.

Just thinking wildly, will we ever see a day where commodities will be traded on the exchange in Kenya? Silver, Gold etc? How does it happen elsewhere?

Absa Bank has removed all African Bank Investments Limited investments (Abil) from its Absa Money Market Fund, it said on Friday.

The Times reported on Friday that investments in the bank's money market fund were reduced by 0.3 percent following the massive losses in African Bank, which saw its share price plummet to a low of 28 cents on Friday from a high of R30 a share in March 2012.

On Monday, the statements of Absa money market account-holders had a line that reportedly read “adjustement (sic) debit” and a rand figure with a negative symbol in front of it.

Several account-holders reported noticing less money in their accounts.

The SA Reserve Bank (SARB) announced on Sunday that it had placed African Bank under curatorship.