In a July 31 open letter to the U.S. Congress, 100 international economists warn that the ruling by New York Federal Judge Thomas Griesa ordering Argentina to pay $1.6 billion to the predatory vulture funds, if not reversed, could cause “unnecessary economic damage to the international financial system as well as to U.S. economic interests.”
The economists, none of whom would back Lyndon LaRouche’s proposals for a new global financial system, are nevertheless extremely rattled over the implications of Griesa’s actions. They urge Congress to “act now and seek legislative solutions to mitigate the harmful impact of the court’s ruling.” They are particularly concerned that Griesa’s ruling will affect the U.S.’s status as a world financial center, and could force nations to seek “alternative locations to issue debt,” such as Britain or Belgium.
The letter does document the way in which the vulture funds preyed on Argentina, making obscene profits off their speculation, and “creating financial uncertainty along the way.” Griesa’s ruling, they warn, means that any holdout creditor “can torpedo an existing agreement with those bondholders who chose to negotiate,” thus threatening future restructurings, and having a significant negative impact “on the functioning of international financial markets. We hope that you will look for legislative solutions to prevent this court decision, or similar rulings, from causing unnecessary harm,” they conclude.
Nothing less than impeaching Obama will achieve what the economists ask.
Griesa, meanwhile, continues with his lunatic actions. In the hearing held in Manhattan Friday morning with lawyers for both parties, he ordered both to continue negotiating, while demanding that Argentina’s lawyers “take steps to stop the misleading information being released by the Republic.” Apparently the truth hurts. “The republic has issued public statements that have been highly misleading, and that has to be stopped,” he demanded. He also refused Argentina’s request to replace special master Daniel Pollack, who, the government claims is not impartial.
On Friday, the International Swaps and Derivatives Association (ISDA), characterized as a “credit event”—default—Argentina’s failure to make the $539 million payment to bondholders, ruling that sellers of credit default swaps must pay buyers. This will trigger an estimated $1 billion in credit default swaps.