# US hedge fund seized an Argentine naval ship



## winnipegoo7 (4 Oct 2012)

http://www.bbc.com/news/world-africa-19827562

ARA Libertad, a commissioned training ship (has sails), was seized by Ghana at the request of NML Capital.


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## old medic (24 Oct 2012)

Ghana: Crew of Argentine Libertad ship board plane to fly home
By Francis Kokutse, The Associated Press
24 Oct 2012

http://www.calgaryherald.com/business/Ghana+Crew+Argentine+Libertad+ship+board+plane+home/7439616/story.html



> ACCRA, Ghana - More than 280 crew of the Argentine naval sailing ship, Libertad, have boarded an Air France plane to take them home.
> 
> The sailors have been in Accra since Oct. 2 after a Ghana court ruled to keep the Libertad at Tema Port following an order served by a United States investment group NML.
> 
> ...


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## cupper (24 Oct 2012)

You know, wars have started over things like this.  :facepalm:


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## winnipegoo7 (24 Oct 2012)

http://www.bbc.co.uk/news/world-africa-20074775



> An earlier plan for the sailors to fly back on an Argentine plane was scrapped because of fears that the aircraft might itself be impounded as part of the debt dispute.


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## MAJONES (24 Oct 2012)

cupper said:
			
		

> You know, wars have started over things like this.  :facepalm:



Perhaps if the British had seized it.


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## uptheglens (25 Oct 2012)

MAJONES said:
			
		

> Perhaps if the British had seized it.



Should the UK stump up the money to buy the ship, I would love to hear Her Majesty's speech "I now Christen this ship HMS Margaret Thatcher"


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## Tank Troll (25 Oct 2012)

Now that would be rather poetic


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## MAJONES (26 Oct 2012)

uptheglens said:
			
		

> Should the UK stump up the money to buy the ship, I would love to hear Her Majesty's speech "I now Christen this ship HMS Margaret Thatcher"



 :rofl:

.....I'd kick in ten bucks towards that.


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## cupper (26 Oct 2012)

Should we really be kicking Argentina when they are down?  >


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## my72jeep (26 Oct 2012)

uptheglens said:
			
		

> Should the UK stump up the money to buy the ship, I would love to hear Her Majesty's speech "I now Christen this ship HMS Margaret Thatcher"


Better yet HMS Iron Maiden.


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## Dissident (26 Oct 2012)

my72jeep said:
			
		

> Better yet HMS Iron Maiden.



Seconded.


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## Kat Stevens (26 Oct 2012)

my72jeep said:
			
		

> Better yet HMS Iron Maiden.



Totally agree, with a huge Eddy statue up in the bow as a figurehead.  That would totally rock, 
And we could name the next one HMS Judas Priest.


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## Canadian.Trucker (26 Oct 2012)

This is interesting considering all of the "concerns" over possible Argentine aggression towards the Falkland Islands lately.  The RN recently put HMS Dauntless into the area for rotation to maintain a deterrent and presence. http://www.bbc.co.uk/news/uk-16810417

With Argentina having issues with debt collectors, it's unlikely they are in any position to launch any sort of an attack.

I too like the idea of the "HMS Iron Maiden"


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## Edward Campbell (16 Dec 2012)

So, Argentina took this dispute to the _International Tribunal for the Law of the Sea_ (ITLOS) in Hamburg, Germany for resolution and this report, reproduced under the Fair Dealing provisions of the Copyright Act from _Opinio Juris_, explains why it found in Argentina's favour:

http://opiniojuris.org/2012/12/15/law-of-the-sea-tribunal-resoundingly-affirms-the-sovereign-immunity-of-warships-and-orders-ghana-to-release-argentine-tall-ship-ara-libertad/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+opiniojurisfeed+(Opinio+Juris)&utm_content=Google+Reader


> Law of the Sea Tribunal Resoundingly Affirms the Sovereign Immunity of Warships and Orders Ghana to Release Argentine Tall Ship ARA Libertad
> 
> by Craig Allen
> 
> ...




RCN members should be pleased, but it doesn't excuse the underlying problem: decades of political and economic mismanagement in Argentina which, in my view, persist today and are common to (almost?) all of Latin America including Brazil and Chile.


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## Brad Sallows (16 Dec 2012)

That's too bad.   I was going to buy some US government bonds, and then when they default acquire myself a US CV on its next port visit.


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## a_majoor (8 Jul 2013)

Despite repeated failues of these sorts of policies through history, people never seem to learn. Argentina continues on its self propelled downward spiral:

http://www.bloomberg.com/news/2013-07-05/argentina-applies-law-that-jails-hoarders-as-bread-prices-double.html



> *Argentina Applies Law That Jails Hoarders as Bread Surges*
> By Eliana Raszewski - Jul 5, 2013 1:40 PM ET
> 
> Argentina plans to apply a law that forces holders of wheat and flour suitable for bread making to sell stock on the domestic market in a bid to contain inflation.
> ...


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## Edward Campbell (24 Jun 2014)

OK, a lot of people are not going to read this article (which is reproduced udner the Fair Dealing provisions of the Copyright Act from _Foreign Affairs_) all the way to the end, and that's a shame because it makes a very important point about _international responsibility_ and why the United States - both the judicial and executive branches - have failed/are failing in their _global_ leadership role:

http://www.foreignaffairs.com/articles/141588/felix-salmon/hedge-fund-vs-sovereign


> Hedge Fund vs. Sovereign
> *How U.S. Courts Are Upending International Finance*
> 
> By Felix Salmon
> ...




Now, the author, Flelix Salmon, a financial journalist, blames only the courts, the US Second Circuit Court and the USSC, for not disallowing Judge Griesa's understandable ruling. He suggests, and I agree, that the courts could have and should have looked beyond the _law_, proper, and should have asked how far US _extraterritoriality_ can extend. But I also blame the Obama administration for not having argued, in front of Judge Griesa, that ruling as he did would be an unjustifiable _intrusion_ into foreign policy which is not any judge's business.

Justice Scalia is wrong and so is the (existing) Foreign Sovereign Immunities Act (1976): it is not the court's (or, indeed, America's) business to sort out the "bedlam" that is the very nature of the global economy. If America wants to apply its _sovereign_ laws to other nations then it had best invade them ~ and then support and govern them, and we have seen how well that works, haven't we? ~ or indemnify US companies, shielding them from risk, and the US hasn't got the financial where-with-all for that.

This is bad law and bad policy ... and it is 100% American.


Edited to add:

And see this. US _extraterritoriality_ extends to both the individual and corporate levels. It, US law, is very, very powerful but it will, inevitably, draw business, investments, management fees, etc, away from Wall Street and towards London (not the safest choice) and Singapore. It is a bit like shooting yourself in the foot, in order to escape from the next battle, but forgetting that you wanted to resume your career as a ballet dancer when the war is over.


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## Edward Campbell (29 Jun 2014)

Today, the _Financial Times_ reports that "Barring a last minute deal with holdout creditors, Argentina will on Monday enter technical default for the second time in 15 years."

The recent ruling (see above) by Judge Thomas Griesa in the United States District Court for the Southern District of New York even effects, generally, bonds denominated in _Euros_ and issued in England.

The _FT_ say, and I hope it is correct that, "Investors have so far shrugged off the legal too-ing and fro-ing as they believe Buenos Aires’ actions and rhetoric are largely for domestic political consumption. With the economy in recession, they mask Argentina’s underlying desire to regain access to international credit to fund development of the country’s huge shale gas reserves and also avert another financial crisis."


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## Edward Campbell (7 Jul 2014)

I know this is boring as hell but, trust me, international financial markets matter in a _strategic_ sense. Countries have gone to war for things that are less important and countries have used war to deflect attention from deep economic problems. This article, which is reproduced under the Fair Dealing provisions of the Copyright Act from the _World Economic Forum_, explains some of the consequences of _Elliott v Argentina_:

http://forumblog.org/2014/07/elliott-argentina-debt/?utm_content=bufferecd6c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer


> What Elliott v Argentina means for global debt markets
> 
> By : Anna Gelpern
> 
> ...


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## Loachman (7 Jul 2014)

One wonders how much of Ontario's debt is owned by Elliott...


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## Edward Campbell (7 Jul 2014)

Loachman said:
			
		

> One wonders how much of Ontario's debt is owned by Elliott...




That's (part of) the reason I keep saying ...



			
				E.R. Campbell said:
			
		

> Actually I think that, despite her own and her party's _instincts_, Premier Wynne will have little choice because:
> ...
> Please remember that the bond market isn't interested in democracy or Premier Wynne's platform or why you and I voted as we did ... it just wants to *must* be paid it return on investment. (I say "must" because we are not Argentina or Brazil.)
> ...


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## Good2Golf (7 Jul 2014)

Indeed, although Elliott Assoc. has broken the code on strong-arming inequitable debt repayment to make huge profits on otherwise risky investments. 

While some might argue that Elliott Associates is working within the law, it is a particularly ugly side of capitalist America.


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## Remius (7 Jul 2014)

Loachman said:
			
		

> One wonders how much of Ontario's debt is owned by Elliott...



Or anyone else that might start taking their cue from Elliott.

This article in the Financial Post highlights the pitfall and consequences this decision might have on Ontario.

http://business.financialpost.com/2014/07/05/ontarios-debt-puts-focus-back-on-investors-appetite-for-political-risk/

And while it does indicate that we are in fact no where near Argentina or Greece it does highlight that Ontario does have a solid sugar daddy in the form of the federal governement that won't let Ontario fail.  But that relief would come in the form of austerity measures and conditions that will make Ontarians cringe and cry.  And will likely p*ss off the rest of the country. 

You can bet that Premier Wynn is really, really hoping for a liberal win federally.


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## Edward Campbell (7 Jul 2014)

Crantor said:
			
		

> Or anyone else that might start taking their cue from Elliott.
> 
> This article in the Financial Post highlights the pitfall and consequences this decision might have on Ontario.
> 
> ...




Or maybe not ...

You're right, Canada will not let Ontario default on its debt, but the price for helping Ontario move into a fiscally sound position might be very stiff ... and it may well suit Premier Wynne to have an _"enemy"_ in Ottawa at whose feet she can lay the blame for things she really knows she really, really has to do for herself. A federal Liberal government would be harder to blame ... not impossible, just harder.


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## Good2Golf (7 Jul 2014)

Concur, Mr. Campbell.  A potentially elected young Dauphin would have much of his fiscal 'room to manoeuvre' eaten up by keeping Ontario from spiraling into greater insolvency...maybe 2015 is the right time to have a bit or karmic, "Alright kid, let's see how you do?"


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## PuckChaser (7 Jul 2014)

Good2Golf said:
			
		

> Concur, Mr. Campbell.  A potentially elected young Dauphin would have much of his fiscal 'room to manoeuvre' eaten up by keeping Ontario from spiraling into greater insolvency...maybe 2015 is the right time to have a bit or karmic, "Alright kid, let's see how you do?"



I'm not a big fan of playing russian roulette with Canada's economy.


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## Brad Sallows (7 Jul 2014)

>Canada will not let Ontario default on its debt

In what way?  Loans, or by making it an absolute requirement for ON to pay its obligations ahead of all its other public spending?


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## Edward Campbell (8 Jul 2014)

PuckChaser said:
			
		

> I'm not a big fan of playing russian roulette with Canada's economy.




Yes ... to both. In the (really highly unlikely) event that ON got anywhere near to a Latin American situation then Canada (assuming that it, unlike ON, remains fiscally responsible) would make a big _loan_ by buying ON's bonds on the market and then imposing strict repayment conditions. It would be the political/constitutional equivalent of Canada becoming a bankruptcy trustee.


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## Remius (8 Jul 2014)

Think of it like the relationship Germany has with Greece.


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## Edward Campbell (8 Jul 2014)

Crantor said:
			
		

> Think of it like the relationship Germany has with Greece.




Thanks; that's better than my bankruptcy trustee example.


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## Edward Campbell (8 Jul 2014)

Nouriel Roubini, a pretty smart fellow, weighs in on the sovereign debt crisis in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from _Project Syndicate_:

http://www.project-syndicate.org/commentary/nouriel-roubini-criticizes-recent-us-court-rulings-that-impede-orderly-restructuring-of-sovereign-debt


> Gouging the Gauchos
> 
> Nouriel Roubini
> 
> ...




This is just one way in which US law stretches around the globe trying to and sometimes succeeding, in _regulating_ the global financial markets. Sometimes the US views on _extraterritoriality_ (as in e.g. the punishments meted out to BNP, HSBC, ING and Standard Chartered bank (all for _transactions_ made in third countries but in US dollars which, therefore, allowed some US laws to be applied) are broadly and generally accepted as being in the "common good," (but not by the French) but other times, as in intruding into the details of debt management, they are, most likely, unhelpful ... to anyone, including the USA.

One thing which should trouble everyone, Americans included, is the degree to which the US administrations has _conscripted_[ the courts and made them a tool of foreign policy. Judges should be wary of serving the interests of the Executive Branch of government.

One immediate impact of the Elliott v Argentina affair is that _The City_ (London) and Hong Kong and Singapore for those who want to avoid anyplace with direct legal ties to the EU in Brussels, will all 'sell' themselves as being _better_, more trustworthy global market centres, each with their own stable, globally convertible currencies, than is Wall Street.


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## Good2Golf (8 Jul 2014)

E.R. Campbell said:
			
		

> ...One thing which should trouble everyone, Americans included, is the degree to which the US administrations has _conscripted_[ the courts and made them a tool of foreign policy. Judges should be wary of serving the interests of the Executive Branch of government.
> 
> One immediate impact of the Elliott v Argentina affair is that *The City (London)* and Hong Kong and Singapore for those who want to avoid anyplace with direct legal ties to the EU in Brussels, will all 'sell' themselves as being _better_, more trustworthy global market centres, each with their own stable, globally convertible currencies, than is Wall Street.



If Cameron were foresightful, he would develop this element into his EU-wary approach to keeping the UK in a position of influence, both in Europe and globally.

I'm not sure many American's see the effect of the interwoven aspects between the executive and judiciary elements of government, and the manner in which it could result in long-term degradation of America's desire to maintain global influence financially.


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## Brad Sallows (8 Jul 2014)

>Canada (assuming that it, unlike ON, remains fiscally responsible) would make a big loan by buying ON's bonds on the market and then imposing strict repayment conditions.

Sure, I can see the government of the day rushing to do that, eager to be portrayed by the government of ON and the federal opposition parties as coming down hard on poor old ON.

It might be easier to simply pass legislation requiring all political subdivisions of Canada to pay creditors first and then deal as they please with any of their own residual internal management challenges.


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## Fishbone Jones (9 Jul 2014)

Good2Golf said:
			
		

> Concur, Mr. Campbell.  A potentially elected young Dauphin would have much of his fiscal 'room to manoeuvre' eaten up by keeping Ontario from spiraling into greater insolvency...maybe 2015 is the right time to have a bit or karmic, "Alright kid, let's see how you do?"



I am going to have to suffer through four years of the human windmill posturing and sinking us into more debt financially and socially, while trying to appease her bonehead backers.

I don't need the same thing going on in Ottawa.

Our stupid electorate bears the full brunt of re-electing McWynne.

Let's not force our moronic attitude and government on the rest of Canada.

It would be like a person taking a huge loan to consolidate their debt and then taking the money to raise Walmart stock dividends and going on a Caribbean cruise instead off paying down their debt.

The only good thing, that I keep coming back to, is that she'll have to use Hudak's platform to make even the slightest headway. At least he was upfront about it and people expected it. Now it will be skulking in the darkened hallways, cloak and dagger, smoke and mirror stuff.


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## Good2Golf (9 Jul 2014)

recceguy said:
			
		

> ...The only good thing, that I keep coming back to, is that she'll have to use Hudak's platform to make even the slightest headway. At least he was upfront about it and people expected it. Now it will be skulking in the darkened hallways, cloak and dagger, smoke and mirror stuff.



This.

Don't  get me wrong, recceguy.  I too am wincing at the prospect of another four years are double-speak and jingoistic continuation towards insolvency.  The fact that it was a reasonably solid majority is even more reason to despair.  Pretty much any other province will be looking pretty good in no time.  *sigh*

Regards
G2G


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## Edward Campbell (9 Jul 2014)

I _think_, recceguy that Premier Wynne knows what she has to do ... indeed, she has promised to do it, all the while hoping that Ontario voters would focus on the candy offered in 2014/15, not on the castor oil which will follow it, beginning later next year. (Ontario voters did, indeed, vote for _instant gratification_ ~ all of us who are parents understand, from experience, that the transition from wanting instant gratification to accepting the value of delayed gratification is one of the key signs of _maturity_; it says something about 37.65% of Ontario voters, doesn't it?)


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## YZT580 (9 Jul 2014)

I wonder how many public service contracts are up for renewal later this year?  There is no provision in the proposed budget for salary increases anywhere that I can see and she has to start now to lay the foundations for belt tightening next year.  When the unions start to pull their labour force either the blankets will fall off or she will cave.  On another note, Ontario cannot continue subsidizing the electric companies without a significant jump in rates that will hit a lot sooner than next year.  I expect significant numbers of plant closures and unemployment will soon follow.  Expect a large emigration of NFLDers to start moving home real soon.


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## Fishbone Jones (9 Jul 2014)

YZT580 said:
			
		

> I wonder how many public service contracts are up for renewal later this year?  There is no provision in the proposed budget for salary increases anywhere that I can see and she has to start now to lay the foundations for belt tightening next year.  When the unions start to pull their labour force either the blankets will fall off or she will cave.  On another note, Ontario cannot continue subsidizing the electric companies without a significant jump in rates that will hit a lot sooner than next year.  I expect significant numbers of plant closures and unemployment will soon follow.  Expect a large emigration of NFLDers to start moving home real soon.



At least Hudak was going to cut Sunshine list management types and overblown useless committees and pseudo Ministries.

However, considering it was the McGuinty\ Wynne governments that created the positions in the first place, don't expect the cuts to be there.

She may not hand pink slips to the front line workers, but I'll bet they don't get replaced once they retire or move on. (That accounts for approx. 50,000\year)

The McSquinty government took the union workers to the bare bones in the last round of contracts. There's not much left to take away from them. It will amount to almost 8 years without a raise after the next round.


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## Fishbone Jones (9 Jul 2014)

E.R. Campbell said:
			
		

> I _think_, recceguy that Premier Wynne knows what she has to do ... indeed, she has promised to do it, all the while hoping that Ontario voters would focus on the candy offered in 2014/15, not on the castor oil which will follow it, beginning later next year. (Ontario voters did, indeed, vote for _instant gratification_ ~ all of us who are parents understand, from experience, that the transition from wanting instant gratification to accepting the value of delayed gratification is one of the key signs of _maturity_; it says something about 37.65% of Ontario voters, doesn't it?)



Knowing what has to be done is a no brainer. She promised? Really? The road to the McWynne majority is strewn with the stinking road kill of broken promises, outright lies and deceit.

I don't expect anything different for the next four years.


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## Remius (9 Jul 2014)

Notice the change of language and tone coming from her.  We are now talking about challenges and having to work hard to balance the budget.  Right.

It does not matter what she promised.  She has to act.  Because she really has no choice.  All she has done is make her job that much harder with all her goodies this budget offered and now the eventual downgrade that will result.

As per the original story in this thread, there's a new wind coming from the creditors and it is cold and unforgiving.


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## Edward Campbell (9 Jul 2014)

Crantor said:
			
		

> Notice the change of language and tone coming from her.  We are now talking about challenges and having to work hard to balance the budget.  Right.
> 
> It does not matter what she promised.  She has to act.  Because she really has no choice.  All she has done is make her job that much harder with all her goodies this budget offered and now the eventual downgrade that will result.
> 
> As per the original story in this thread, there's a new wind coming from the creditors and it is cold and unforgiving.



                                                                                                                             :goodpost:


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## Fishbone Jones (9 Jul 2014)

Crantor said:
			
		

> Notice the change of language and tone coming from her.  We are now talking about challenges and having to work hard to balance the budget.  Right.
> 
> It does not matter what she promised.  She has to act.  Because she really has no choice.  All she has done is make her job that much harder with all her goodies this budget offered and now the eventual downgrade that will result.
> 
> As per the original story in this thread, there's a new wind coming from the creditors and it is cold and unforgiving.



You mean when she was yelling at Horvath, stating that the voters of Ontario wanted her and her budget. She already seems somewhat drunk with power.

However, yes, we should get the thread back on track.


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## Brad Sallows (9 Jul 2014)

So, what does ON have in lieu of a navy?


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## PuckChaser (9 Jul 2014)

Solar and wind farms. That stuff is probably worth a pretty penny. After all, we're paying billions in subsidies for it.


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## Edward Campbell (16 Jul 2014)

According to this article, which is reproduced under the Fair Dealing provisions of the Copyright Act from the _Globe and Mail_, the US is trying, again, to extend the _reach_ of its tax collectors:

http://www.ft.com/intl/cms/s/0/9288ffc6-0c9a-11e4-9080-00144feabdc0.html?siteedition=intl#axzz37crPcU1r


> Jack Lew pushes US Congress to crack down on tax ‘inversions’
> 
> By James Politi in Washington
> 
> ...




All countries want to attract and retain global head offices and their associated R&D facilities. America has, traditionally, been better at this than anyone since _Edwardian_ Britain. But it's not, now. Successive US governments have tried to steal the corporate golden egg by applying silly corporate taxes. (Corporate taxes are very, very popular amongst a HUGE majority of people, including Canadians, but the HUGE majority of Canadians is terminally bloody stupid.) Now companies, which are always way smarter than the HUGE majority of voters, are "voting with their feet." The Obama administration's _answer_ is to "outlaw" rational business decisions. US courts have shown a propensity to read laws as written, even dumb laws. Maybe _activist_ courts, which would slap the administration and the congress upside the head for making stupid, illiberal decisions, would be a good thing.


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## a_majoor (16 Jul 2014)

Since US business taxes are among the highest in the OECD, setting up shop somewhere else makes perfect sense. Apple has a dragon's horde of about $35 billion USD in offshore accounts that won't ever be repatriated to the US for that very reason. Of course this is OK so long as you are one of the "crony's"; GE has payed npo or minimal taxes following the same rules but without comment by the Admnistration or the press...

Asking the courts to take an activist stand may be a mixed blessing; there is a good chance that instead of throwing out poorly conceived laws and regulations, the court will enthusiastically embrace and expand upon it instead.

The only cure is to let the hard realities of the market take their course. Outlawing something that the market demands only stokes the black or grey markets; US companies prevented from sensible relocation to low tax, low regulation regimes may simply close shop altogether and sell their patents and intellectual property to a (notionally) foreign company instead. Consumers will go for cheaper imports in order to maximize their own standard of living and make their dollar stretch. Investors fed up with lower rates of return may demand action to remove the impediments to economic activity and growth within the US, and of course this is also in line with some domestic political movements.


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## Edward Campbell (23 Jul 2014)

According to a report in _Business Insider_ the New York Judge Thomas Griesa said that he "will not grant Argentina a stay on payment to bondholders as it attempts to negotiate the payment of over $1.3 billion worth of bonds owed to a group of hedge fund creditors referred to collectively as NML ... Now The Republic has until July 30th to either pay all its bondholders including NML, negotiate with NML to the creditors' satisfaction, or default on its debt."

Sovereign default is nothing new, and it's certainly not new to Argentina, but it tends to drive out "good money" from entire regions. In fact the same article says that, "In 2015 — whether Argentina pays or not — President Cristina Fernandez de Kirchner and her administration will be gone. All the alternatives are more market friendly. It's one of the reasons why hedge fund managers like Mike Novogratz of Fortress Investments and Dan Loeb of Third Point Partners have said they're ready to invest once Argentina hits bottom."  So the _*vulture funds*_ will be there but, I suspect most of the bond market will look elsewhere, outside of Latin America, to the detriment of Brazil and Chile, too.


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