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from Alison Frankel:

U.S. stays out of Argentina pari passu case at SCOTUS – for now

France, Brazil and Mexico told the U.S. Supreme Court this week that the 2nd Circuit Court of Appeals has endangered sovereign debt markets with its ruling last year against the Republic of Argentina. In amicus briefs supporting Argentina's petition for Supreme Court review, the foreign sovereigns argue that the 2nd Circuit gravely misinterpreted the so-called "pari passu" (or equal footing) clause of Argentina's sovereign debt contracts. By ruling that Argentina may not pay bondholders who exchanged defaulted bonds for restructured debt before it pays hedge fund creditors that refused to exchange their defaulted bonds, the amicus briefs argue, the 2nd Circuit has undermined international debt restructurings, permitting vulture investors to hold entire foreign economies hostage.

The United States made quite similar arguments, as you may recall, when Argentina's pari passu case was before the 2nd Circuit. But there's no filing from the Justice Department among the 10 new amicus briefs urging the Supreme Court to take Argentina's appeal. Does that mean Argentina has lost its most influential friend in the U.S. court system?

It does not, but it does mean that the administration is waiting for an invitation from the Supreme Court justices before it takes a position in the Argentina pari passu case. And there's at least some chance the invitation will never come.

It has become rare in recent years for the Justice Department, via the solicitor general, to file an amicus brief on a cert petition without the justices asking to hear the government's position, said Thomas Goldstein of Goldstein & Russell (and Scotusblog). Unless a government employee is a party in the case, Goldstein told me in an email, the SG "almost never" opines on cert petitions without a specific invitation from the Supreme Court.

from Felix Salmon:

Elliott vs Argentina: 3 possible resolutions

Argentina, as everybody knew it would, has gone to the Supreme Court to appeal the bad (and ignoble) ruling against the country by New York’s Second Circuit. The most likely final outcome, still, is that Argentina will default, for the reasons (but not with the timing) I gave last year. But, with this petition, Argentina now has three possible outs.

Call them sovereign immunity, pari passu, and the bondholders’ ransom. None of them is particularly likely to happen — but add them all together, and there’s still a glimmer of hope for Argentina.

from Anatole Kaletsky:

Behind the wave of market anxiety

What has caused the sudden anxiety attack that overwhelmed financial markets after the New Year? We may find out the answer at 8.30 on Friday morning, Eastern Standard Time.

Almost all agree that the market turmoil has been linked to alarming events in several emerging economies -- including Turkey, Thailand, Argentina and Ukraine -- that has spilled over into concerns about more important economies, such as China, Russia, South Africa, Indonesia and Brazil.

from Global Investing:

“Dog-Eared” debt and the IMF’s sovereign restructuring ideas

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Since April of last year, a small but growing cadre of lawyers, investors, regulators, and yes, even journalists, have been carrying around dog-eared copies of an International Monetary Fund paper (read: trial balloon) that revisits how the fund, the lender of last resort for many nations, might revamp its approach to sovereign debt restructurings.

 

The IMF prefaces its latest foray into sovereign restructurings by saying history shows official sector sovereign debt restructurings have been “too little too late” and when it gets involved, the public money used in a settlement too often just flows to private sector investors who take the cash out of the afflicted country.

from Counterparties:

MORNING BID – Turkey, the Fed, and we all float down here

The messy sell-off in emerging markets was stemmed overnight after Turkey surprised everyone by raising rates to 12 percent – but it didn’t last. Major averages in Britain and Germany opened at their highs of the day but have since faded, and even though the big rate increases in Turkey, South Africa and India are meant to stem capital flight, so far the market’s shooting first and asking questions later. S&P futures were up about 20 points after the Turkey rate hike – an odd move for such a localized event – and we’re seeing the reaction now, which, to quote Tom the cat about the ‘white mouse no longer being dangerous,’ “DON’T…YOU…BELIEVE…IT.” So we’re lower, and continue to head lower, and for those of you new to the markets, this is what’s called a selloff.

The big question: Will the Federal Reserve defer its tapering campaign in recognition of emerging-markets difficulty? One could say the Fed cannot be expected to act as the underwriter for global risk-taking, but you’d be laughed out of the room, given the performance of assets around the world in the last several years as the Fed went into full-QE mode.

from Photographers' Blog:

Dreaming of the next Messi

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Bariloche, Argentina

By Chiwi Gianbirtone

When I went to see Claudio Nancufil, he looked like any other 8-year old kid, keen to play with his friends but not very communicative. Before playing a match they did a training session, kicking the ball to the coach and Claudio was waiting patiently for his turn without saying much.

Finally, they started playing and during the match he was constantly going for the ball and shots on goal. He dribbled swiftly past bigger boys, kicked the ball with his left and passed accurately. He kept on asking secretly for the ball so his opponents wouldn't notice. He played well, like a grown-up player. He was quiet but went directly to the referee if some of the other players kicked him. At the end of the match it came down to penalties. Claudio always got the ball into the goal but the goalie was not bad either.

from The Great Debate:

Argentine leader’s health recovering, as her dynasty ebbs

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As Argentina’s Cristina Fernandez de Kirchner convalesces in the presidential residence after surgery, a poor prognosis for her political and economic agenda awaits her outside. Yet the populist leader is unlikely to respond with major policy initiatives as she enters a prolonged lame duck period.

Fernandez faces big losses in Sunday’s mid-term congressional elections, which will likely determine how much legislative clout she can muster. Hope for her third presidential mandate is all but extinguished. Under her administration, Latin America’s third largest economy is slipping further behind the region’s top two -- Brazil and Mexico -- and looking ever more like the laggard Venezuela.

from Photographers' Blog:

No darkness within

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Buenos Aires, Argentina

By Enrique Marcarian

No disability scares me more than blindness. I depend on my sight more than on my legs. Impaired vision determines the course of the lives of those who suffer it, changing or eliminating their ability to do so much. Nevertheless, there are cases in which a person’s strength is greater than the challenge. Two such people are Leonardo Duarte (Leo) and Eusebia Casimiro (Evi), husband and wife who live by themselves, although they are both blind.

Leo and Evi are both in their mid-fifties, and both lost their eyesight as young adults. Leo lost his as a victim of an attempted robbery, and Evi was left blind during surgery to remove a brain tumor. I was attracted to them by their personalities and attitudes in the face of adversity; they live alone with limited resources but with great will to overcome all that, in a society that does not fully accommodate the visually impaired.

from MacroScope:

For workers, the long run has arrived in Latin America

The outlook for emerging market economies over the next decade looks more challenging as long-term interest rates start to bottom out in the United States. Here is another complicating factor: ageing populations.

That problem is not as serious as in Japan or Europe, of course. Still, investors probably need to cut down their expectations for economic growth in Latin America over the next years, according to a report by BNP Paribas.

from Photographers' Blog:

My memories of a dictator

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Buenos Aires, Argentina­

By Marcos Brindicci

Former Argentine dictator Jorge Rafael Videla died on May 17 at the age of 87 inside his cell in a prison near Buenos Aires, where he was serving a life sentence for crimes against humanity. He was the first President and most emblematic figure of the military junta that ruled Argentina from 1976 to 1983, during the so-called "Dirty War" years. Human rights organizations claim that around 30,000 people disappeared during those years, and Videla never repented about the kidnappings and murders ordered by the state.

His death of old age got me thinking about one of my first memories of him, and also, one of my last ones.

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