Monday, May 12, 2014

Fox News wins the Hype Award for the Argentina debt story

It is sad to see Fox News publish a horribly written story called "Litigious investors ask US Supreme Court to deny Argentina a 'do-over' on $1.4B debt ruling" from the Associated Press (here). First of all in the US taking someone who defaulted on debt to court is not "litigious", it is standard practice. Americans are generally quite proud of that right. But this clearly pro-Argentina story continues with more nonsense.
Fox News: - The "Aurelius Respondents," another group of hedge funds and holding companies based in the Cayman Islands and the U.S. state of Delaware to avoid taxes and scrutiny, urged the justices to deny Argentina's "do-over" request, saying "a chorus of disinterested parties has recognized that Argentina is without peer in its mistreatment of private-sector creditors."
Just to be clear, the Cayman entities are in the Cayman Islands because they are either owned by foreign organizations who are not supposed to pay US taxes (such as Canadian pensions) or by US corporate pensions who are tax exempt. As far as Delaware, those owners will certainly pay their share of taxes because these are pass-through entities. Fox News - check out something called Schedule K-1. And with respect to avoiding "scrutiny", the managers of these entities are Registered Investment Advisors regulated by the SEC. And for those who have been through an SEC RIA audit know there is no shortage of scutiny there.

Argentina is mocking the US legal system by appealing the court decisions in this case and then saying it won't comply with any final court ruling if it is not in Argentina's favor. Of all the news agencies it is particularly surprising that Fox News did not check the facts on this and is in effect buying Cristina Fernandez's propaganda on the issue. Congratulations on winning the Sober Look Hype Award.
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