THE LOST CONTINENT

It's gone from funny, ha-ha to funny peculiar.  South America or to be more specific, Argentina and Venezuela.

Yesterday, Argentina was declared in contempt of the United States Court for the Southern District of New York by Judge Griesa.  Now I have no idea as to whether this has ever happened before but if it has it was certainly in BC (Before Charlie) times.  How a nation could allow itself to get in this position is a bit beyond me, but I did get a bit of insight from a retired financial buddy of mine who just returned from a brief trip to BA last week.  He met with a broad range of Argentine financial and political officials and had the following reaction:  with the exception of the central bank governor who has no stroke whatsoever, they are all insane.  Worse yet, the collective attitude is, "We are out of here in 14 months, let the next government deal with it."  His highlight was the minister of finance, a 27 year old committed Marxist/Leninist explaining to him that the only reason Communism failed was because the capitalists had better IT systems.  I didn't understand the argument; neither did he.

Now to be honest, I don't know what being in contempt means when a sovereign is involved.  I mean, like, what does the court do?  Hoist White Ensign and sail up the Plate guns blazing?  The Hedgies are asking for a fine of 50 Large a day but where does that come from and if you are looking at a liability of a couple of billion, should you care?   As for a further damage to your reputation, do you stay up late worrying about it?  And if your goal is really to hang on for 14 more months and then slither out of town with all the money you can steal, so what?  Finally, I can't imagine that Christina has given a thought as to future effects on capital markets for her country.  Then again, you can, always it seems, find someone stupid enough to lend you money which history, unfortunately, teaches us.  Perhaps this is the dawn of a new day.  Oh, in the mean time the Argie ambassador has written John Kerry about the unfairness of it all.  Big John is looking into it.

From the sublime to the…really, I don't know what.  The Bolivar, the currency of the Zulus reached a new low yesterday of +100 to the dollar in the black market.  That kinda means the only thing you can buy in Caracas is gasoline unless you have dollars and working stiffs don't have many of those. If you think about it, the two most potentially rich countries on the entire continent (OK, Brazil is far bigger but with the size comes vast problems) are rapidly becoming--or have become--economic basket cases because of politics.  Having said that, their politics receives greater acceptance throughout the continent than that associated with capitalism.   Can this be anything more than a monumental failure in our foreign affairs for the past 100 years?  And today we for all intents and purposes ignore Latin American except for the issue of illegal immigration.  What a waste.  Makes you want to cry for Argentina…Just saying.