The cutely-named American Task Force Argentina (ATFA) ran a full-page advert in the Wall Street Journal today. With the snappy title of "Argentina: Bad Friend, Growing Threat", it explained to the world just how terrible things are for......erm.....for themselves, really. Here's the link, so have a look for yourself...nice photo, no?
Those ATFA dudes must be feeling pretty stupid right now, and methinks just a little bit desperate. After three years of lobbying for bond holders that didn't take the Argentina haircut deal in 2005, they have exactly zero to show for their efforts. Worse than zero, in fact. All this time the group has pinned its hopes on the day Argentina wanted to go back to the world debt markets, sell bonds...y'know, stuff like that. They reckoned that when that day came, Argentina would be forced to settle its debts before getting any love from the world.
WRONGO!! Not only has Argentina tapped "Uncle Hugo" for cash these last few years, it now has a nice line of credit going with the Interamerican Development Bank (IADB), which looks like getting extended another $8Bn in the near future. It also has about U$3Bn coming from a private French brokered bond deal for Klishtina's dream bullet train project. But the one that must have made the blood drain from ATFA faces was Henry Paulson giving USA public backing for Argentina to go and sort out its Paris Club debt in a whole bunch of negotiations coming up in the near future.
Hence today's advert from ATFA, and let's just note in passing the factual mistakes in today's ad before getting to the main point here.
1) It says Nestor Kirchner's government defaulted on the Argentina debt. Ridiculous. I mean, even wikipedia has got a better time line than you guys.
2) It talks about "disastrously inept economic management". Well that might be true right now, but from 2003 to early 2007 Argentina dug itself out of the hole really well, and even though he's by no means my favourite, credit should go to then finance minister Roberto Lavagna for the policies that allowed Argentina to recover much faster than any world finance body expected.
3) It says Klishtina is voicing a "New claim to the Falkland islands." That's nothing new; Argentina has consistently claimed the islands since the war in the early 80s. Whether it's a valid claim or not is beside the point. ATFA is just making things up.
Then there's the usual bunch of crap about Chávez and the FARC and a very weird thing about Argentine farmers, foot and mouth disease, and having a unfair advantage over their US counterparts. Note that the US agro industry is the most subsidized sector of the whole US economy....but that one doesn't count....
But the main point is not mentioned. This whole ATFA thing makes it sound like there's a bunch of impoverished individuals who were unlucky enough to be holding Argentine bonds when the wheels came off the merry-go-round and now they're stuck with useless paper and about to lose their homes cos they can't get their money back. In fact, the defaulted Argentine bonds are freely traded in the markets and those holding them can sell at any time they like. The REAL reason behind all this is that a group of so-called "vulture funds" has been buying up the defaulted paper at a heavy discount to face value (say for example paying $30 for a $100 bond) in the hope they can bully Argentina into paying full whack. The little guys sold out years ago...this is big, dirty capitalism at work now.
Hence the bullshit advert in the WSJ today. And with the chance to turn about $7Bn into $20Bn, you can bet they can afford a few more ads like that in the near future.