"If we have to reach default, we will do it responsibly. The national government does not recognize the illegal and illegitimate debt at all. Ladies and gentlemen, we are not playing; we are very serious and conclusive when saying "The national government rejects the illegal and therefore illegitimate debt."
Spooky huh? WHoooooOOOOoooooOOOOOoooooOOOOOO. Just the kind of thing Andres Oppenheimer can report on tomorrow while trying to forget what an idiot he's made of himself recently. Here's the Reuters version in English too...spookier and spookier... whooOOOoooOOOooo
So interesting that Brazil's main international advisor to President Lula, Marco Aurelio Garcia also said today, "Ecuador is going to pay its bill...we (Brazil) have the means with which to convince (them)."
Also interesting the way the Veep of the debt commission last week admitted that Ecuador will have to pay for the time being. There's no other way to take the complaint forward and maintain the "responsible" position. Right now Ecuador has two firms of US lawyers working on the same thing...betcha a dollar they advise Studmuffin&Co to keep paying the coupons while making an international case of it all. Nah...betcha ten dollars, in fact. Any takers?
Also interesting is the little snippet that Stephan Kueffner of bloomie picked up on. It's buried under the dramatic headline, but Bloomie does manage to mention that Ecuador quietly and without much fuss paid a U$1.2m coupon on one of its Brady bonds this week. The reason why it paid? To stay legal and responsible.
But most interesting is the action where it really counts, namely the bonds market. The key 2012 Globals sank to 21c on the dollar when the whole shebang first started. This time last week they were trading at 25.5c and 26c on the dollar. Today the same bonds closed the day at 31.5c on the dollar having touched 32c after (not before) Viteri spoke. That's a 50% climb since the drama began, and 20+% in the last couple of days. Money talks and BS walks, dudes and dudettes.
Speaking of BS, the whole thing comes to its inevitable climax on Saturday December 13th. That's the day Studmuffin has chosen to reveal to the world whether Ecuador is going to pay the delayed coupon, the announcement coming as part of the Studtastic* Roadshow to be transmitted on Radio MUFN. The guy must be after the ratings...hey, I wonder how much a 10 second slot to advertise this blog would set me back?
Finally, a word for those of you who've taken this blog's advice on Ecuador debt throughout this soap opera: So far you're making good coin but think about the retreat position that the idiots who called end-of-the-world over Ecuador's bonds will take. When Ecuador pays the coupon on Monday 15th, you can bet your sweet bippy you'll hear resounding cries of, "Well, they paid this time, but the issue isn't going away and the next round of coupons is steeper and you'll see you'll see I'm right y'know even though i'm wrong...." blah blah yada yadaaaaa ad infinitum.
The point here is that selling the news is a likely scenario as the pea-brained shills will still be preaching a sermon to people who want them to be right, thus maybe profit-taking on half your position on Friday 12th December is the prudent course. Biz iz biz.
*copyright DJ, used with kind permission