A little 'Argentino' default?
We've been hearing about an Argentina default for some months. It looks like the default may be here before the weekend, according to Reuters:
"The country's economy minister, Axel Kicillof, speaking at a news conference at the Argentine consulate in New York, repeatedly referred to the holdout hedge funds as "vultures" after two days of talks failed to produce an agreement.
"Unfortunately, no agreement was reached and the Republic ofArgentina will imminently be in default," Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening."
Argentina's default matters for several reasons:
1) Argentina has the 4th largest GDP in Latin America after Brazil, Mexico and Colombia. This is not a small country;
2) Argentina's political class borders on immaturity and silliness. Calling the foreign creditors "vultures" may get some applause locally but won't encourage anyone else to invest in the country;
3) The Argentina economy is already in trouble; and,
4) The default could impact smaller countries with debt problems.
Hopefully, Argentina can figure out someway of avoiding default. However, I'm not optimistic, primarily because Argentina is not run by serious people.