T.J. York
213374939
The Argentine Dilemma
Doyran does a good job explaining the nature of vulture funds and the nature of transnational
finance to consider other potential issues. I want to rephrase something mentioned by Doyan in
defining vulture funds "...where holdout creditor through the secondary market buys distressed
assets at a discount, then refuse to participate in sovereign debt restructuring". So in other words,
holdout creditors have the most to gain (cited as over %1600 in returns) from a national default
that would likely allow them to buy cheap assets when national economies collapse (when
nations rely on the globalized/neo-liberal free market forces of transnational creditors who
purchase sovereign bonds or other investments). They refuse to participate because while they
could potentially make strategic gains through sovereign debt restructuring, they have more to
gain if they either get Griesa's ruling which would enact the RUSO clause, or if there is no debt
restructuring plan at all.
The other interesting thing this article mentioned was the conflict of interest essentially between
the IMF and U.S. Treasury represented through the Sovereign Debt Restructuring Mechanism
and Collection Action clause, as well the countries who supported and were against Argentina.
As to what that represents in my opinion should of been discussed, likely other veiled financial
interests of conflict, not fully covered in this article.
213374939
The Argentine Dilemma
Doyran does a good job explaining the nature of vulture funds and the nature of transnational
finance to consider other potential issues. I want to rephrase something mentioned by Doyan in
defining vulture funds "...where holdout creditor through the secondary market buys distressed
assets at a discount, then refuse to participate in sovereign debt restructuring". So in other words,
holdout creditors have the most to gain (cited as over %1600 in returns) from a national default
that would likely allow them to buy cheap assets when national economies collapse (when
nations rely on the globalized/neo-liberal free market forces of transnational creditors who
purchase sovereign bonds or other investments). They refuse to participate because while they
could potentially make strategic gains through sovereign debt restructuring, they have more to
gain if they either get Griesa's ruling which would enact the RUSO clause, or if there is no debt
restructuring plan at all.
The other interesting thing this article mentioned was the conflict of interest essentially between
the IMF and U.S. Treasury represented through the Sovereign Debt Restructuring Mechanism
and Collection Action clause, as well the countries who supported and were against Argentina.
As to what that represents in my opinion should of been discussed, likely other veiled financial
interests of conflict, not fully covered in this article.
