Their willingness to fund an insolvent county's sovereign debt allowed at least some of the assets to be saved. Now the Argentinians are calling the people who salvaged their miserable country "vultures."
The Argentinians never learn. Several years ago, they decided to nationalize their country's oil reserves, in effect stealing tens of billions of dollars from petrochemical companies that had invested in Argentina. Now they wonder why foreign investment is so difficult to attract.
Actions have consequences, and markets remember.
Small correction: the trades are executed under the laws of the State of New York. My opening statement makes it sound like the bond contracts were written under USC.
And people call America arrogant.
Unless I'm confused, the present owners of these bonds never gave a nickel to Argentina, much less "saved" them.
Back in say, 1990, Argentina sold bonds to (foolish) investors. 10 years later, as it became obvious they were going to default, the original investors, or those they had transferred the bonds to, sold the bonds for pennies on the dollar to the "vulture investors," who gambled the low cost of the bonds vs. their face value against the low change of ever collecting.
The vultures never gave any money at all to the Argentines. That is unless I'm confused about how this works. It wasn't like Bush and Obama bailing out the banks. It's actually a lot more like our first major political controversy, where Hamilton insisted we pay our debts at face value even to speculators.