So, good news coming out of Argentina.
It turns out that they have restructured
their debt that has been hanging around
for a long time. Originally, the
problems were back in 2001. Uh, and
they've reached an agreement with an
overwhelming majority of the uh the debt
holders. Okay. Great, great, great. And
they're the number three economy uh in
that region of the world. So, this
should help a lot. Here, we go to the
Guardian for the explanation of this.
Argentina restructured restructured its
debt in two rounds of negotiations in
2005 and 2010. More than 92% of
creditors accepted the new deal and
received exchange bonds and GDP index
bonds. H they did that back in 2010. I
wonder why it's in the news today. Well,
let's keep reading. It worked out well
both for Argentina and those who
accepted the restructuring. The economy
soared, so the GDP index bonds paid off
handsomely. Oh, great. Great. This story
only gets better. It turns out Argentina
just put $539 million in the Bank of New
York Melon to give to debt holders. So
Argentina is doing its job. It's got the
money. It's giving
it. And then all of a sudden the story
turns a little bit. And it turns out US
Federal Judge Thomas Greo, who's been on
the bench for 42
years, appointed originally by a
Republican, shocking, decided, no, you
know what? I'm gonna stop Argentina from
paying its debts.
What? Because the 8% that did not agree
to the restructuring, they need to be
paid in their entirety immediately. I
won't even let you pay anyone else until
you pay them first. So, let's explain
who they are and let's explain how this
works. Now, the guys who wrote this uh
are Joseph Stiglets who only won a
couple of Nobel prizes in economics and
Martin Guzman. Okay? They say it was the
first time in history that a country was
willing and able to pay its creditors
but was blocked by a judge from doing
so. So, uh what happened? Vulture
capitalist happened. So, they explain
uh the so-called vulture investors saw
an opportunity in Argentina to make even
larger profits. So, they had already
bought the stuff pennies on the dollar,
but they're going to turn bigger
profits. They're going to explain how
they're going to do that in a second. So
they were simply speculators who swooped
in after the 2001 default and bought up
bonds for a fraction of their face value
from panicky investors. They then sued
Argentina to obtain 100% of that value.
So understand how this scam works. They
know that Argentina has already
defaulted. So it's not a surprise to
them. It's not like, "Oh man, I put my
money in Argentina and I thought it was
going to work out, but it they went into
default. Golly G." No, they bought it
from the guys who already knew that the
country had gone into default and they
weren't going to get certainly not 100%
of their money back. They were going to
get a small fraction of their money back
if anything, right? So, after the
default happened, they came and they pay
pennies on the dollar, a little bit.
We're going to show you how. But then
they turn to Argentina and they go,
"Here's what we're going to do. We're
going to do a marketing campaign against
you. We're going to do a political
campaign against you. And we're going to
do a legal campaign waging the United
States of America against you. And we're
going to get America to stop you from
paying your debts to anyone else. So
that we basically do extortion for you
to pay us 100%. But not 100% of what
they paid. Remember, they paid a tiny
amount. 100% of what was originally owed
to someone else. Okay, more explanation
here.
NML Capital, uh, a subsidiary of the
hedge fund Elliot Management, headed by
Paul Singer, spent $48 million on bonds
in 2008. Thanks to Greece's ruling, NML
Capital should now receive
$832 million, a return of more than
[Music]
1600%. An unheard of return.
So why in the world should they get this
money? Well, Grea agreed with the
vulture capitalists that well they
should not only be paid the entirety of
the money that was originally owed.
Remember they got the money in 2008. The
default happened in 2001. No, it doesn't
matter. Doesn't matter. They should be
paid 100% of what was owed originally
plus an exorbitant interest rate. But as
Stiglas points out and so does Gooseman,
wait a minute. you get you pay a high
interest rate if you think it's risky.
And in this case, it was risky. But the
whole point of the risk is you might not
get paid back. That's why you're getting
a high interest rate. In this case, the
judge says it's a 100% guarantee
according to my ruling that you will get
paid. Plus, you're going to get the
exorbitant interest rate based on the
risk that I just now
eliminated. That makes no economic sense
whatsoever. But it doesn't have to make
economic sense. They just have to
convince one US federal judge to rule in
their direction. And the whole country
of Argentina is frozen now. So now, even
though they're a huge economy in the
region, they're having trouble going
into the market to get money that they
would know, any country would. You know
how much in debt the United States is.
If they cut off our funding right now,
said you can't get debt anymore, the
country would be in a panic. And that's
what we put Argentina through. Why?
because some vulture capitalists want to
get 1600% return on their money. Now
understand they've done this before.
They did it to Peru and it worked. They
did it to Congo and Congo is a little
bit more complicated. They got paid but
there was a guy who came in and stopped
their exorbitant request. You're going
to be shocked at who that guy is. I'll
get to that in a little bit. Okay. And
then a separate vulture capitalist group
also did it to Liberia and it's just
these extortion groups. In fact, his
story is a has wonderful twists and
turns. Uh it turns out they also did it
to us. I'll tell you about that in a
second as well. The same group, Singer's
group. So, uh we go back to Stiglets to
explain repayment on Greece's terms
would devastate Argentina's economy
because the debt restructuring
stipulated that all the creditors who
accepted it could demand the same terms
as holdouts receive. Argentina might be
on the hook for
$140 billion dollar more. To give you a
sense of perspective, every
Argentinian, every Argentine, I should
say, might thus owe more than
$3500, more than onethird of the average
annual per capita income. And who does
it go back to? Goes back to these debt
holders. 92% of them already agreed to
the other deal. And they're perfectly
happy and the money's in the bank to pay
them, and the judge won't let them. And
the other 8% say, "No, I want insane
profits. I want everybody in Argentina,
open up your pocketbook. Give me a third
of the money you'd make all year. Give
it to me. I'm gonna put it in my
pocket." Okay. To give you a sense of
perspective from the American context,
if they did that in America, you know
how much we'd all have to give? We'd all
have to give
$20,000 to these guys running these
funds. $20,000 a piece. This is
insanity, man. And by the way, they
already got an amazing deal. Here's a
report from Reuters. Reuters IFR has
reported that private banks are trying
to reach an agreement with the holdouts
that would pay them 80 cents on the
dollar for their Argentine bonds in
hopes of getting the frozen coupon
payment sitting at BNY Melon released as
soon as possible. So the hostage taking
worked. The guys who are the other debt
holders are like, "Look, I got $500
million sitting there. I need to get it
and I need to get more from Argentina,
but you won't let me get it because you
convinced this scenile old judge that
you're right about this. And so, okay,
fine. I'll pay it. 80 cents on the
dollar. They paid pennies on the dollar.
They're going to make a killing. No, not
good enough. Paul Singer and Elliot
Management says, "Nope. Nope. Nope.
Nope. I want more. More. More. More.
More. Is there no end to the greed?"
Okay. Now, I turn to Donald Trump.
Speaking of which, you know why? On an
unrelated story when he was asked uh by
ABC News, hey, listen. Haven't you gone
through a whole bunch of bankruptcies
like defaulted on payments for the
companies that you ran? Kind of like
Argentina. It's interesting perspective.
Here's what Donald Trump said. I never
went bankrupt. And let me just tell you,
if you look at our great business people
today, Carl Icon, Henry Kravis,
Unintentel, Leon Black of Apollo, all of
them have done the same. They use and we
use the laws of this country, the
bankruptcy laws, because we'll buy a
company, we'll have the company, we'll
throw it into a chapter. That means
chapter 7, chapter 11, a form of
bankruptcy. We'll negotiate with the
banks, we'll make a fantastic deal,
we'll use those, but they were never
personal. This is nothing personal. So,
here's Trump explaining how it works.
It's just business, man. So, if I want
to go into bankruptcy, I just throw it
into what he calls a chapter. Okay? and
then I don't pay you. I pay you pennies
on the dollar. That's normal business.
But when they go into New York court,
the Paul Singers of the world, they say,
"No, Argentina must pay everything. This
is an obligation. It's a legal and moral
obligation by Argentina." When Trump
doesn't pay you, it's just business.
When Argentina doesn't pay you, they
say, "No, that's a moral and legal
obligation. There's no way around it."
More from Trump. He said, "I've used
these laws of this country to pay my
debt. Fine for Trump, not fine for
Argentina." He explains what I did is
reduce the debt from a billion8 he talks
about a specific example here from a
billion8 meaning 1 bill800 million to
like $300 million and and by using
intelligently the laws of this country.
So Trump can bring his debt down from
1.8 billion to just 300 million but
Argentina can't. The judges in this
country allow Trump to do it but they
don't let Argentina do it. But judges
Trump's just a smart businessman. more
from Trump. If you look at our greatest
business people, so it's not just Trump.
Most of them in order to pay debt or
change a company or change a structure,
most of them and many of them and some
the best ones and I named some of them.
I can name 25 more have used the laws to
take a deal. But that's the same deal
that Argentina is not allowed to take.
Now they have to pay 100% and then some.
Finally, Trump said about his
bankruptcies, his company's
bankruptcies. He says, "You know what
it's called? It's called
negotiation." For him, it's negotiation.
For Argentina, it is a legal and moral
imperative that they pay more than
100%. Now, here comes the most maddening
part of this. It turns out there is one
guy who could put an end to all this.
His name is Barack Obama. Now, in a
separate article in the Guardian, they
explain Greg Palace does Obama could
prevent vulture hedge fund billionaire
Paul Singer from collecting a single
penny from Argentina by invoking the
longestablished authority granted
presidents by the US Constitution's
separation of powers clause. So, he goes
to the judge and he says, "Look, you're
affecting my foreign policy and as a
president of the United States, I have
the sole power to deal in foreign
policy." And here Argentina is trying to
bring us to international court of
justice to say what the hell is the US
doing meddling in my affairs blocking my
money which by the way I'm never going
to send to the America again and note to
everybody else in the c in the world
don't send your money to America they'll
just block it they won't even let you
pay your debtors cuz the billionaire
hedge fund operators have taken control
of the US government and won't let them
do anything so what are you doing to
take us to international court so Obama
could easily say hey it's foreign policy
separation of powers. Step aside, Bush.
In fact, an appeals court told the same
judge decades ago, "Hey, don't mess with
foreign policy. That is the president's
prerogative. He doesn't listen. He
doesn't care. He's a conservative
appointed by Richard Nixon." He says,
"No, no, I give the money to the
billionaires in America." Okay, now you
think, "Come on, that seems like an
interesting theory uh by the Guardian
there, but it's not like a president
could really do that, could they?" Well,
indeed, as Palace explains, President
George W. Bush invoked this power
against the very same hedge fund now
threatening Argentina. Bush blocked
Singer seizure of Congo US property
despite the fact that the hedge fund
chief is one of the largest and most
influential contributors to the
Republican candidates.
So, it turns out that Obama is even more
pro- vulture capitalist than Bush was.
And of course, as always, he'll tell
you, "Oh, there's nothing I can do." But
we know that's not true. Even Bush did
something. Now, how do we know that
Obama wasn't going to do anything
anyway? Turns out Paul Singer already
took this country hostage. He did
something incredibly similar when he
bought a parts company that sold parts
to GM and Chrysler. And as GM and
Chrysler were in the middle of their
panic and they couldn't pay their bills,
he said, "I will in fact now if they
don't send the parts to GM and Chrysler,
they're going to shut down in a matter
of literally days." And he threatened,
and at that time, remember the American
taxpayers own GM and Chrysler. So he's
threatening us directly. And he told the
American taxpayers at the time about GM
and Chrysler, quote, "We'll shut you
down." And what did President Obama do
in the face of what they at the time
called extortion? Argentina is calling
it extortion now against the same exact
vulture capitalist. We called it
extortion. What do we do? We paid. Of
course, Obama immediately capitulated.
Here's explanation from the Guardian on
that. The US Treasury quietly paid the
Singer Consortium a cool
$12.9 billion in cash and subsidies from
the US Treasury's auto bailout fund.
That's US taxpayer money. We paid him
$13 billion. And by the way, that parts
manufacturer that was based in the US,
how did Paul Singer and his group repay
us for our $13 billion? Did he at least
keep those jobs here? He he shut down 25
out of the 29 plants in the US and moved
the jobs abroad and got to keep the 301
13 billion of taxpayer money
anyway. How long are we going to allow
this to go on? This ruling by this
federal judge is insane. It should be
overturned immediately by a higher
court. If it isn't, it should be
overturned by the United States
president who should exercise his powers
under the separation of powers to
immediately put an end to this nonsense.
But he's not going to because he works
for the same guys. If you remember the
number one contributor to President
Obama in
2008, financial
companies. They keep holding all of us
hostage and we keep paying the ransom.