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from Alison Frankel:

How contempt sanctions could force Argentina to talk to hedge funds

(Reuters) - Argentina's contempt for the U.S. court system is not even debatable. Argentine officials have openly jeered at court orders enjoining them from making payments to bondholders who participated in Argentine sovereign debt restructurings without also paying more than $1.5 billion to hedge funds that hold defaulted bonds. The government has run newspaper ads vowing not to capitulate, has attempted to bring an action against the United States at the International Court of Justice in The Hague and, most recently, pushed through legislation authorizing its government to replace BNY Mellon with a state-controlled bank in Buenos Aires as the exchange bond trustee, after BNY Mellon made clear that it would not process payments for fear of violating the U.S. injunctions. Contempt, as it's ordinarily defined, practically drips from the words of Argentine politicians when they talk about U.S. District Judge Thomas Griesa of Manhattan, who has presided over their standoff with the holdout hedge funds for nearly a decade.

Those funds, led by NML Capital and Aurelius Capital, asked Griesa on Wednesday to make Argentina's contempt official. They filed a motion to hold the government in contempt and impose sanctions on it. Griesa has scheduled a hearing Monday on the motion.

This isn't the first time that the funds have proposed a contempt finding after the U.S. Supreme Court refused in June to review the injunctions requiring Argentina to pay them. So far, Griesa has delivered plenty of stern warnings to Argentina, via its lawyers at Cleary Gottlieb Steen & Hamilton, but hasn't held the government in contempt, presumably in the hopes that court-ordered mediation would produce a settlement. The hedge funds' new motion argues that Griesa's admonitions haven't worked. Argentina has only cemented its defiance with the new legislation and followup newspaper ads billed as legal notices of its demand for BNY Mellon's resignation as exchange bond trustee.

Sooner or later, unless Argentina changes course, Griesa is going to have to find that the country has violated court orders. Otherwise, he'll be conceding that the federal court system must bow to the stubbornness of a foreign sovereign - even one that has voluntarily submitted to the jurisdiction of U.S. judges. As I've said before, Argentina's intransigence has already exposed limits on the power of U.S. courts. The questions now for Griesa are whether he can impose sanctions on Argentina, and whether those sanctions can change Argentina's behavior.

from James Saft:

Companies risk missing capex boat: James Saft

Sept 25 (Reuters) - Corporate America's decision not to take
advantage of low rates and easy terms to invest in new capacity
may turn out to be a mistake of historic proportions.

Combine a lost decade of investment and some of the easiest
debt terms in a long generation and the costs of delay look like
they may be high.

from Full Focus:

Fleeing the Islamic State

Refugees from Syria flood into Turkey and Lebanon to escape advancing Islamic State militants.

from Full Focus:

Photos of the week

Our top photos from the past week.

from Photographers' Blog:

Fleeing Islamic State

Suruc, Turkey
By Murad Sezer

Tens of thousands of Kurdish Syrians have fled Islamic State and flocked to the Turkish border. Most of them are from the Syrian border town Kobani and its surrounding villages, where the group’s fighters have launched attacks, but other refugees have travelled from further away.

A Kurdish Syrian refugee waits for transport during a sand storm on the Turkish-Syrian border near the southeastern town of Suruc

They arrive at the border, tired, miserable and desperate for water, but many have to wait days before they are allowed to cross into Turkey.

from Reuters FYI:

Raise a glass!

A waitress carries mugs of beer during the opening day of the 181st Oktoberfest in Munich September 20, 2014. Millions of beer drinkers from around the world will come to the Bavarian capital over the next two weeks for the Oktoberfest, which starts today and runs until October 5.                REUTERS/Michael Dalder

A waitress carries liters of Bavarian beer during the opening day of the 181st Oktoberfest in Munich on September 20, 2014. REUTERS/Michael Dalder

Un-happy hour? 

As beer prices rise, Germany's waitresses risk seeing smaller tips this Oktoberfest in Munich.

from Data Dive:

Who’s really dropping the bombs on Islamic State?

Yesterday's beheading of French tourist Herve Gourdel by an Algerian group prompted France to consider an expanded role in the anti-Islamic State air strikes that began this week.

The Arab League, the European Union and NATO all back action against the group, and the U.S.-led coalition boasts over 50 member states, but who is really doing the heavy lifting?

from Mark Jones:

Who’s really dropping the bombs on Islamic State? http://t.co/KHBv1V8Gap

Who’s really dropping the bombs on Islamic State? http://t.co/KHBv1V8Gap

from Mark Jones:

Who’s really dropping the bombs on Islamic State? http://t.co/Qniq4hFUVc

Who’s really dropping the bombs on Islamic State? http://t.co/Qniq4hFUVc

from Global Markets Forum Dashboard:

QE no EZ quick fix

 It's no doubt news that makes ECB President Mario Draghi breathe a sigh of relief –but today there's been no respite for the euro, with the single currency hitting its lowest in 22 months versus the dollar - below $1.27 at one point - and two year lows versus sterling as investors anticipate a divergence in monetary policies. 

Ahead of next week's rate-setting meeting, Draghi stoked expectations of further action to revive the euro zone economy and stave off the threat of deflation, telling a Lithuanian newspaper that the central bank was ready to use additional unconventional instruments or change the size of its current asset purchase programme if it became necessary. But our forum guests today were somewhat sceptical that such measures could work, casting doubt even on the effectiveness of the big gun of quantitative easing. 

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