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Financial piracy

7 October 2012

Mitt Romney financial supporter Paul Singer is giving piracy a bad name. Singer’s seizure of an Argentine ship by a Ghanian court on behalf of his Cayman Islands company might be fun and games to the readers of the New York Post, but it’s likely to raise some real questions about not just Singer, but his buddy Mitt, and bring up the question of how much of Mitt’s money also comes from “vulture capitalism”… i.e., shaking down bankrupt governments, or governments (like Argentina) recovering from the debts run up by discredited and disowned dictatorships.

Harriet Dennys in The Telegraph (U.K.)

New York financier Paul Singer has set a new watermark for hedge fund madness by seizing an 100-metre naval vessel as down-payment for a defaulted bond the Argentine government owes his $17bn (£10.5bn) fund Elliott Capital Management.

So for those not familiar with Singer’s form in making millions of dollars in profits from the world’s poorest countries, here’s Diary with a quick reminder.

In 1995, Elliott bought defaulted Peruvian bank debt for $20m and successfully sued for $58m. More recently, the company’s subsidiary Kensington International bought a $32.6m loan owed by Congo-Brazzaville at the reported cut-down price of $2.3m, and was then awarded more than $100m interest over 2002 and 2003.

Meanwhile, a scan of the interests and hobbies section of the sovereign debt specialist’s CV reveals he is a major donor to fellow vulture capitalist Mitt Romney, and that he finds time to read – notably Commentary magazine, the monthly that started life as the voice of the liberal left before veering sharply to the neoconservative right over the1980s.

No prizes for guessing which Republican bankroller also sits on the provocative magazine’s board of directors.

That”100-metre naval vessel” is ARS Libertad, is a a “tall ship” — an old fashioned sailing frigate used for training naval cadets and for showing the Argentine flag on  goodwill missions.  Singer, or… I suppose to be accurate, Singer’s Cayman Islands company, has been on an ill-will mission:  court shopping for someone to enforce judgements by New York and London courts against Argentina (the whole country) and with ARS Libertad scheduled to dock in Tema, Ghana… got a Ghanian injunction to hold the frigate pending hearings on the entire matter… in Ghana, which has nothing to do with all this, really.

Singer, though his “Elliott Management” company bought Argentine debt at “reduced prices” over 10 years ago, and is now trying to collect on old debts and interest, claiming Argentina owes Eliot around 1.6 billion dollars. Or, at least shake down the Argentines for a cool 10 million:

“Argentina may obtain release of the ship, however, by posting a bond with the High Court in Accra”, point out the local press mentioning the possible 10plus million dollars bond.

Argentina’s Navy was kind of disgraced a few years back, but with their motto of irse a pique antes que rendir el pabellón   ( Go to the bottom of the sea, but never surrender!) I don’t expect the Argentine Navy will just give Singer their boat.  Nor do I expect that Argentina is going to pay ransom to pirates.  And Argentina’s Navy has a few things Singer doesn’t.  They have four destroyers, three submarines, a bunch of patrol boats and fast attack vessels around, and Singer’s got… a big sail boat?

Yo ho ho, and a whole lot of dumb.

Arrrrrgh!

¡Libertad para la Libertad!

 

6 Comments leave one →
  1. Bob Mrotek permalink
    7 October 2012 8:31 am

    “irse a pique antes que rendir el pabellón”

    Founder ( or sink) rather than surrender the flag (national colors).

    • 7 October 2012 1:38 pm

      Well, yeah… if you want to be literal 🙂 The point being, some young sailor lad might do the patriotic thing and scuttle the ship… although seeing some hedge fund manager hoisted up the yardarm for piracy after being boarded on the high seas might be more satisfactory.

  2. 7 October 2012 8:55 am

    Unfortunately I don’t think most Romney fans would see this kind of behavior as a problem.

    • Nolan permalink
      8 October 2012 12:43 pm

      A completely anecdotal story I know, but I posted this story on facebook a few days ago only to discover a Romney-loving acquaintance reposted it under the caption “That’s how it’s done”. So you might be on to something.

  3. 7 October 2012 7:30 pm

    Robber barons never change, do they?

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