1 Argentina nears second bankruptcy (Phillip Inman in The Guardian) A US judge has blocked a $500m (£290m) payment by Argentina to creditors due on Monday, pushing South America’s second largest economy closer to a second massive default in 13 years. New York district judge Thomas Griesa said Argentina was in breach of his decision that US vulture funds, which have pressed for full repayment of their loans, were entitled to bypass a longstanding debt restructuring deal.
The ruling, which enforces an earlier decision in favour of vulture funds seeking a $1.6bn payout, means that $539m of Argentina’s scheduled debt repayments were stuck in Bank of New York Mellon, which as trustee was due to disburse the payments under the previous debt deal. A spokesman for the vulture funds called Argentina’s attempt to pay rival creditors holding restructured bonds a “brazen step” that had forced them back to court.
Argentina has claimed it will default if the US courts insist the vulture fund bondholders – many of which bought their bonds at a steep discount – are repaid in full. The Argentinian government, led by president Cristina Fernández de Kirchner, published adverts in most major local newspapers explaining why it had rejected the court’s ruling and needed to press ahead with the original payments to meet its obligations.
Argentina defaulted on nearly $100bn of debt in 2001. It could decide to pay the vulture funds, but experts believe it would be unable to do that for all other bondholders and so be forced back into bankruptcy.
2 Japan inflation at 32-year high (BBC) Consumer prices in Japan rose at an annual rate of 3.4% in May, the fastest pace in 32 years, as the effect of the sales tax hike started to be felt. Japan raised its sales tax rate from 5% to 8% on 1 April. Japan has been battling deflation, or falling prices, for best part of the past two decades and that has hurt domestic demand and stifled growth. The Japanese government has taken various steps over the past few months to try and reverse this trend, and the country’s central bank has set a target of a 2% inflation rate.
The measures, which include boosting the country’s money supply, have started to have an impact and consumer prices in the country have now risen for 12 months in a row. Virtually the entire surge in the consumer price index (CPI) over the past two months can be attributed to April’s consumption tax hike” Policymakers have been hoping that once prices start to rise, consumers and business will be encouraged to start spending and not hold back on purchases, as they may have to pay more later on.
The tax hike in April was the first in 17 years. The increase comes as Japan is facing rising social welfare costs due to an ageing population. At the same time, the country is trying to rein in its public debt – which at nearly 230% of its gross domestic product (GDP) is the highest among industrialised nations. The tax hike is expected to help ease some of the financial burden of the government. At the same time, the increase may also help to trigger inflation as businesses pass on the hike to consumers, resulting in increased prices of goods.
3 Wondering if US is losing faith in universal democracy (David Brooks in The New York Times) The Cold War settled the contest of historic visions. Democracy won. You would think the gospel of democracy would be triumphant. But, as Mark Lilla writes in an essay called ‘The truth about our libertarian age’ in The New Republic, the post-Cold War era hasn’t meant the triumph of one ideology; it destroyed the tendency to rely upon big historic visions of any sort. Lilla argues that we have slid into a debauched libertarianism. Nobody envisions the large sweep of events; we just go our own separate ways making individual choices.
He’s a bit right about that. When the US was a weak nation, Americans dedicated themselves to proving to the world that democracy could last. When the US became a superpower, Americans felt responsible for creating a global order that would nurture the spread of democracy. But now the nation is tired, distrustful, divided and withdrawing. Democratic vistas give way to laissez-faire fatalism: History has no shape. The dream of universal democracy seems naïve. National interest matters most.
Lilla argues that the notion of history as a march toward universal democracy is a pipe dream. Arab nations are not going to be democratic anytime soon. The world is an aviary of different systems — autocracy, mercantile despotism — and always will be. Instead of worrying about spreading democracy, we’d be better off trying to make theocracies less beastly.
Such is life in a spiritual recession. Americans have lost faith in their own gospel. Meanwhile, the country grows strangely indifferent to democratic heroes. Decades ago, everyone knew about Sakharov. But how many raised a fuss over the systematic persecution of democratic activists and Christians across the Middle East? If America isn’t a champion of universal democracy, what is the country for? A great inheritance is being squandered; a 200-year-old language is being left by the side of the road.
4. Soccer World Cup’s flopping rankings (Geoff Foster in The Wall Street Journal) Fans of the world’s most popular game know of soccer’s old and universally despised tactics. Turning a small foul into a death performance can draw cards for opposing players, kill time from the clock or just give one’s winded teammates a breather. What’s interesting about the World Cup is that not all national teams are the same. Some embellish all the time, some hardly at all.
So here are the “winners” of our first-ever international soccer injury-embellishment awards. The Team Most Commonly Seen in Anguish: Brazil. There were 17 incidents in two games when a member of the Seleção was seen on the ground in pain—the most of any country. The Overall Writhing-Time Champions: Honduras. Los Catrachos spent the most time on the ground or being tended to by trainers: seven minutes and 40 seconds to be exact. Naturally, five minutes and 10 seconds of that came in the first half against France when the match was tied (which would have been good enough for them).
The Team Most Likely to Grin and Bear it: Bosnia and Herzegovina. These World Cup newbies obviously don’t get how this works. They only had two “injuries” in two games for a total of 24 seconds of writhing time. The Team With the Most Carnage in One Game: Chile. While they protected an early lead against Spain, the Chileans tallied 11 “injuries,” more than 24 other teams had in two games. The Fastest “Injury” Yet: Enner Valencia, Ecuador. Against Honduras, Valencia was on the ground, clutching his leg after four seconds. Worst Use of a Stretcher: 5 players (tie) Of the nine players carried off in these matches, five returned—all in less than 90 seconds, including American DaMarcus Beasley