Tweet
I know what the definition of moral hazard is, I asked what it is in case of Argentina.
-
-
By moral hazard I mean if private pension funds find themselves unable of giving you even the minimal monthly pension, then screw you for choosing private pension funds and not the state pensions.
The state nationalized the pension funds because that was not going to happen, the state would have ended up giving money to those retired argentines who chose private pension funds, in fact, that is what had started to happen.
On the suplus stuff. Argentina has an awful relationship with the whole international financial world.
Argentina had 5 presidents in a month in 2002, the fourth one, who lasted only a week and a half, defaulted on the argentine debt. Argentina renegotiated its debt (the process took three years) in 2005, most of the people Argentina owed money too, accepted it, but if I recall correctly, like 20% didn't.
Most of those bonds were bought by vulture funds, and they have been sueing Argentina in international courts trying to get a better deal than the one those who accepted the renegotiation got.
And Argentina payed all the money they owed to the IMF in 2005, 10 billion dollars, and they gave the finger to the IMF with leftist retoric. From that moment on, whenever we needed money, we went to Chavez who has flooding with oil money, and he would buy our crappy bonds, instead of going to the imf or some international banks.
The state does not want to refinance because it would be seen as a defeat, ideologically. Actually, they tried a few months ago, and the reception from international banks was great, but 2 weeks after the whole crisis with Lehman Brothers started and the deal got buried.
Che and Vetlegion, watch this, I doubt you will be able to see something like this somewhere else, it is the task force of a vulture fund lobbyng against Argentina.
Read this
I need a foot massageComment
Comment