Vulture funds: theory and practice

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Politics & economyArgentinaFinance

In line with the rules of good journalism, the information reported should be clear and objective, addressing the key questions that need to be answered so that people can draw their own conclusions.


Having been informed of "what", "when", "where", "how" and "why", the readers, listeners or viewers are equipped with the elements needed to think for themselves, contributing towards allowing society to decide, based on a better assessment of the information available, on the best way forward.

This explains why the media conglomerates, responding to the interests of big business, do everything in their power to muddy the debate on issues crucial to our present and future, such as vulture funds, the regulation of the financial system, tax havens, income concentration and the taxing of wealth and financial transactions.

The mass media, be it by omission or outrageous manipulation, tries to confuse concepts, invent precepts, bring down governments and destroy reputations, in a game in which anything goes in the battle to maintain privileges, and in which the first victim is the truth.

Argentina, which major newspapers and television networks are repeatedly accusing of "cheating" and a "setting bad example" - for refusing to give in to the blackmail by vulture funds - is a good example, as the intention of those who own these mouthpieces, the faithful guard dogs of the interests of the rentier class, is obvious.

Who/what are vulture funds? They are speculative funds owned by magnates who buy bonds, mainly government bonds, at heavily discounted prices, and then subsequently go on to demand - using pressure, bribery and blackmail - their repayment at face value.

These financial parasites prey on heavily indebted countries and live off this carrion, which is why they are called vultures.

When, where and how? In the case of Argentina, these funds refused to accept the debt restructuring negotiated by Néstor Kirchner’s government between 2005 and 2010.

At that time, 93 per cent of the creditors agreed to a deal offering repayment of between 45 per cent and 70 per cent of the debt, while the vultures refused, banking on a policy of "the worse, the better".

They wanted the country to hit rock bottom, forecasting that their winnings would be boosted by the growth of unemployment, hunger and misery. Now these same vultures are demanding full repayment of the debt from the Argentinian government, as stated in the original agreement: US$1.3 billion plus interest. They have a lot of cheek.

Finally, the big question is why? What is behind this onslaught against Argentina? The reason is that President Cristina Kirchner’s sovereign decision not to bow to the speculators’ logic and to say "no" sets a dangerous precedent.

It is an audacious decision to give precedence the interests of the nation, development, wages, jobs and rights, which would be compromised by the bleeding of the state budget to feed parasites.

In the middle of this battle - which is as political and ideological as it is economic - we once again insist that it is unacceptable that the decision of a supreme court, such as that of New York, should seal the position of a judge like Thomas Griesa, appointed by former President Richard Nixon - who needs no introduction - and take precedent over the interests of an entire nation.


This article has been translated from Spanish.