Brazil & Southern Cone - August 2014 (ISSN 1741-4431)

“It’s 31 July, and the world’s still spinning…life goes on,” President Cristina Fernández said, a day after Argentina entered into default. The Merval stock market, despite suffering a modest fall since that day, remains one of the best performing indices in the world this year. Many of the country’s fundamental and serious economic problems remain, but it is hard to argue that they have been seriously aggravated by the default. Arguably the biggest losers so far are the bondholders who accepted Argentina’s 2005 or 2010 debt write-downs but now can no longer receive their interest payments due to a US court order. The reputation of the US as a reliable financial centre, as it seemingly failed to envisage the possibility of Argentine intransigence, has also taken a blow. The Argentine government, meanwhile, has seen its popularity at home rise significantly.

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