Wow! I take it all back...Argentina wants to do a deal on the debt holdouts

The funniest thing is that they're offering about the same as they did in 2005, and much less if you take into account opportunity cost.

ROFL LMFAO!!!!

Ok, trying to keep a straight face about this one, La Nacion is running a good article that tells how the three banks involved, Citi, Deutsche and Barclays, think they can get about 50% of the holdouts to accept a deal at $0.32 to the dollar on the lapsed bonds (they traded at $27 last week, to give you an idea..that's 0.27 on the dollar) because the ATFA vultures are tired of trying to bullyboy their way to a better deal and will take whatever is offered.

Nobody quite knows the exact number, but the best estimate is that there are U$23Bn of holdout bonds out there. So Klishtina can theoretically mop away half of that for U$3.68Bn. A nice bargain compared to the $6.7Bn she's shelling out to get rid of the Paris Club once and for all, and a small slice of the U$50Bn international reserves tucked away at the BCRA.

So the same people who said no to 30c on the dollar three years ago will take 32c, or if you like 6.66% compounded interest over three years.......nice going, ATFA boyz!

South America 2, North America 0

New York gets a taste of Argentine smoke'n'mirrors

This is not how Argentina's President will be appearing in New York this week

(and before you ask, yes, it really is her)

The Argentine stock market has had a rough quarter, as any quick glance at the Merval index will confirm.

But just look what the Merval did today. Wowsers, what a pump'n'dump!

Why so? Because the world heard how Klishtina is going to open up the debt held by the vulture funds, a.k.a. the debt paper that was stupid enough not to have submitted to the debt swap way back in 2005 (here's Reuters on the story). The Merval peaked at 1751 (+5.36%) on the news, then started dropping when....well, when the locals couldn't keep a straight face any longer and sold it all to 'Los Janquis'. It finished just 1.7% up at 1690.

What really happened was that Klishtina, in New York for the UN bigmeet right now, was starting to pick up flak from the loathsome vultures at ATFA and decided to counter in finest Argentine style. Out came the portable smoke'n'mirrors set and suddenly Klishtina was presented with a report "written by three banks" that she "was studying" that would lead the way to her sending a bill to the Argentine Senate that would possibly allow the frozen debt to be negotiated.

Oh what fun! My how I laughed! And the funniest thing is that the gringos actually swallowed this story, hook, line and sinker. The result? Klishtina immediately off the hook while on her sojourn to the Big Apple, she can concentrate on shopping and UNning and we all live happily ever after. Let me make this as plain as possible:

THERE IS NO WAY THAT THIS ARGENTINE GOVERNMENT NEGOTIATES THAT DEBT.

Welcome to the crazy world of Argentine politics, New York edition.