General Discussion
In reply to the discussion: Clintonians Join Vulture Flock Over Argentina [View all]merrily
(45,251 posts)In light of the borrower's past history, no one is, or should be, very surprised by the default.
Junk bond dealer, who knew or should have known the risks involved with buying this debt of this borrower pays peanuts to those who actually made 100% of the loan, and sues to collect in full, in accordance with the original terms of their loan. The court awards him the remedy he seeks. For some reason, some DUers sympathize with him, anyway, saying how unfair and unjust any other outcome would have been to him.
Maybe, fairness and justice would require that he get back what he originally paid for the debt, if anything?
NO! He paid for the prospect of great gain.
Did he really, though?
And if he did, did his pricing not also reflect the very high possibility that he could lose his entire investment?
So, why is only the outcome that is the best possible scenario for him the only fair and just outcome? For that matter, why does fairness and justice to Singer not also require that he share the upside with the people who actually did give Argentina billions of dollars (knowing Argentina's prior history of defaut)?
Look, the court may have acted in accordance with the letter of existing law. Not a single post on this thread that I have read so far argues that the decision violates existing law.
You want to argue letter of the law? You'll get no argument from me. I'll even side with you.
However, when posters lose me is when posters start throwing around words like "fair" and "should" in connection with awarding Singer all the upside and zero of the downside of a clearly VERY risky transaction, a risk he undertook knowingly and voluntarily, and probably eagerly. The entire junk bond business has precious little to do with fairness and justice. For that matter, neither does a lot of our legal system or our economic system.
Getting sarcastic about posters who don't agree that Singer occupies some kind of moral high ground as to the nation of Argentina, the people of Argentina, the original lenders or anyone else simply is not reality. Is the law on his side? Yeah, but what the law currently says has nothing to do with the disagreements on this thread.