Wednesday, August 27, 2014


Carter checked in the other day a touch emotional over a piece in the latest edition of Foreign Affairs.      My copy arrived yesterday and I read it whilst preparing for sleep which, as a result of the article, came at about 0530.  I awoke this morning still quite incredulous but before I could get my arms full around it came news of the latest piece of stupidity from the Argies and another new twist to this tale.  Anyway, I'll deal with Foreign Affairs tomorrow but lets try to get the latest chapter in this soap opera out of the way.

There was an old joke about the terrorists that took themselves hostage and threatened to commit suicide if their demands were not met.  Clearly, they were Argentines.  You might remember that the trustee for all the New York law bonds as well as many of the bonds goverened by English law is the Bank of NewYork/Mellon.  Until yesterday.  The Argies fired BNYM…at least in regard to the N.Y. law bonds.  They also kicked them out of Argentina which probably brought a great sign of relief from the directors, but does little to resolve the dispute. B.A. has decided that Nacion shall be the trustee which raises the interesting issue of how Nacion expects to make the payments that the government expects them to make given that they must go through New York where sits Judge Griesa in what now must be Fully Pissed-Off mode.  I have no idea how one places a sovereign nation in contempt of court but perhaps we are about to find out.  Nor do I understand what happens to the Argie argument that since the funds owed (according to them) were in fact deposited with BNYM--in BNYM's account with the central bank--and as I suppose Mellon has given the funds to Nacion, that no default has occured.  Or maybe they haven't.  Wouldn't it be a kick if before turning off the lights Mellon somehow got the funds to Nacion but in Nacion's account with the N.Y. Fed!  Oh joy!  Oh bliss!  Of course I have no idea how they could pull that off.

Anyway, while all this was going on, George Soros and a couple of other zillionaires filed suit in the  Court of the Assizes or some such place to compell BNYM to make payment on Argie restructured bonds covered under English law, claiming that the American courts have no jurisdiction over these instruments.   Interesting argument.  Leave it to Georgie Porgie, the vulture of all vultures to come up with this one.  Now that raises the question is BNYM fired just as the New York Law trustee or or as trustee, period, and if the latter, how does a non-trustee act like a trustee, and what difference does the governing law make if the payments are in dollars and must be made in New York?  I mean do you think I can dust off my diploma, get re-qualified in New York after 40 years and start getting in on this thing?  I mean they must be running out of lawyers!  This is just wonderful and for distinguished and learned counsel, it must seem that money is raining down from the sky…but that's tomorrow's story.  Let's not get ahead of ourselves.

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