Argentina, the drama queen of South American nations, led by President Cristina Kirchner, the drama queen of world leaders, has had a heck of a run the past few months, at least in the court of public opinion.
Despite the fact that her country technically slipped into default last month and is on the fast track toward recession, the world's media has cheered the perennially dead-beat nation for standing up to American bondholders led by hedge-fund investor Paul Singer who have the "audacity" to demand that they get every penny on the dollar of the IOUs they hold.
"Vulture," "the Taliban of global finance" and "amoral billionaire" are among the few printable names that have been thrown Singer's way.
For those not following the saga, here are the basics: After its last defaulting in 2001, Argentina restructured its debt and reissued it at fire-sale prices and then got many of its lenders to take a haircut again in 2005.
Singer's fund, Elliot Management, and a handful of others decided not to take that deal nine years ago and are refusing to take a similar offer this time, holding out to be paid the full face value of its bonds.
More than 90 percent of the bondholders are willing to settle for less, but US courts have ruled that every bondholder must get paid and Singer wants to be paid in full.
If Argentina had to pay everyone what it owes them, it is estimated it would cost the country as much as $15 billion, or more than half its foreign reserves, setting up a huge run on its peso and crashing the stock market and the economy.
Naturally, the idea of a New York billionaire playing hardball with a country of 40 million, a quarter of whom live in poverty, has set up an easy meme — the 1 percent versus the poor of the emerging nations.
Indeed, it is nearly impossible to find a positive word about Singer and Argentina online. Such vitriol toward lenders is as old as finance itself, but it is profoundly troubling to see such animus against funds like Singer's for merely asking that the legally binding covenants of their IOUs get some respect.
Kirchner's Argentina is in a mess of its own making. Had it not issued billions in these US dollar-denominated bonds to bail itself out yet again, none of the Wall Street crowd would have bought the bonds in the first place, even at rock-bottom prices.
If the bonds were denominated in pesos, Argentina could devalue its currency to make good on its promises — a time-honored strategy that exacts a huge economic toll on its citizens but keeps profit-seeking foreigners at bay.
Instead, Argentina took the quick fix, sold its debt in dollars, agreed to US law and now wants to renege.
President Kirchner for her part is happy to have a New York billionaire be the focal point of her countrymen's ire while she lives her Marie Antionette-lifestyle, taking a helicopter for her 9-mile commute to work and jetting around on her Air Force One equivalent known as Tango-One.
Sure, it would be "nice" if Singer settled and gave the Argentine people some hope their economy won't plunge further into a death spiral. But how many promises have to be broken before lenders stop being "nice" and decide to completely shun shaky borrowers, be they countries or corporations?
The Argentine crisis of 2014 may not tip the scales completely, but you can be sure the next time a country comes to Wall Street in desperate search for money, it won't be an easy sell.
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