HOLDING PATTERN

I've been holding of on writing more on Argentina until we see if there can be a breakthrough before the grace period of July 31 is reached but it appears increasingly like that may be a date to far.  Yesterday Judge Griesa ordered non-stop negotiations to begin at 10;00 am today but at neen it was announced that the talks would not begin until tomorrow.  Seems as though the right Argies weren't present.  Don't know whether they asked the judge but I assume so, nevertheless, in this day and age with the communications available I can't understand why there is no palavering going on if indeed this is the case.  I guess the Indians don't talk together anymore but now have to wait until the chiefs arrive.

Anyway, the real issue is what's going to happen if somebody doesn't blink?  The word is beginning to get out that the bond market will collapse in the event of an Argentine default.  Horror of horrors, some people may lose money…well at least those who will be found to be long and wrong at the close of business on July 31.  Big deal.  Fact is, except for the Argies, it's NOT a big deal.  Things are going to get very ugly down south but after losing the Copa, the populous is conditioned.  Keep in mind that this isn't the first time the country has been a bit of a financial pariahs and nor will it be the last as long as there is someone stupid enough out there to lend them money and begin the process all over again.  The present government is about at the end of its term and the next will reach some sort of an accommodation with the creditors blaming the humble pie that Argentina may be forced to eat on the previous administration.  You know, sort of "It's all Bush's fault" kind of thing.  Worked here, will work there.  But it will be a while.  In the mean time life will go on.  So we leave this happy land to return only upon default time or if by some fortunate and unforeseen scenario, the parties reach a compromise.  Otherwise we continue to circle in our holding pattern.



Barney Frank appeared today before the House finance and banking committee to reassure them Dodd/Frank was the finest piece of legislation ever enacted.  Of course, no one asked him if that was the case how come less than 50% is in force and of that number nobody knows what 50% of it means.  Might reflect badly on them you see.  Too Big To Fail was a major topic as was the "resolution authority" and the "living wills" thingy we talked about a few days ago.  A colossal waste of time and money all around.  Barney was his usual self but looking a bit more porcine than usual.  General Hospital was far more inviting.