DMac
31st August 2011, 05:04 PM
The Fabulous Life of the Ravenous Vulture Funds (http://www.thecuttingedgenews.com/index.php?article=12206)
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Rendering the Poor, Poorer
The term “vulture funds” is how critics have labelled the more smarmy and marginal investment houses which buy up the defaulted debt of poor countries for pennies on the dollar, and then proceed to sue them for immediate repayment on their full face value, plus interest. As an example of how this is done: A developing country sells bonds on which it eventually defaults. The vulture fund purchases the debt from the lender at bargain basement prices and proceeds to sue the issuing country, or uses other tactics to summarily claim to be paid the bonds’ full worth as compensation. When litigated, more than half of the resulting court cases were won by the vulture funds, ensuring in many instances outrageous profits in excess of 400 percent.
One of the “brilliant” masterminds behind this strategy is the Republican businessman Paul Singer, reputably the biggest funder of the Republican Party in New York. In 1996, Singer’s firm, Elliot Associates Ltd., sued Peru for $58 million, after the firm had bought $11 million (one-tenth of what it was worth before the country had defaulted) worth of debt. The U.S. Federal Court of Appeals ruled in Singer’s favour, who then threatened Peruvian officials to drive the country into bankruptcy and block Peru’s negotiations with the Bretton Woods-institutions unless that country’s treasury repaid its obligation to him. Finally, on October 7, 1996, the impoverished Latin American country had to pay $58 million to Singer, who made a $47 million dollar profit on the debt.
^Republican George Soros, with a little less power. Worth reading into him.
snip
Rendering the Poor, Poorer
The term “vulture funds” is how critics have labelled the more smarmy and marginal investment houses which buy up the defaulted debt of poor countries for pennies on the dollar, and then proceed to sue them for immediate repayment on their full face value, plus interest. As an example of how this is done: A developing country sells bonds on which it eventually defaults. The vulture fund purchases the debt from the lender at bargain basement prices and proceeds to sue the issuing country, or uses other tactics to summarily claim to be paid the bonds’ full worth as compensation. When litigated, more than half of the resulting court cases were won by the vulture funds, ensuring in many instances outrageous profits in excess of 400 percent.
One of the “brilliant” masterminds behind this strategy is the Republican businessman Paul Singer, reputably the biggest funder of the Republican Party in New York. In 1996, Singer’s firm, Elliot Associates Ltd., sued Peru for $58 million, after the firm had bought $11 million (one-tenth of what it was worth before the country had defaulted) worth of debt. The U.S. Federal Court of Appeals ruled in Singer’s favour, who then threatened Peruvian officials to drive the country into bankruptcy and block Peru’s negotiations with the Bretton Woods-institutions unless that country’s treasury repaid its obligation to him. Finally, on October 7, 1996, the impoverished Latin American country had to pay $58 million to Singer, who made a $47 million dollar profit on the debt.
^Republican George Soros, with a little less power. Worth reading into him.