Several weeks ago we summarized the highly entertaining (if largely futile) fight between naval commodore second class Paul Singer of Her Majesty's Elliott Capital Navy, and the defaulted and soon to be re-defaulted state of Argentina. The punchline, much to the chagrin of all those other "sophisticated" bloggers who read so very much into the recent decision of the 2nd Circuit Court of Appeals, was the following: "What this really means is that Western courts have decided that Elliott has not been stripped of pre-petition rights despite, or rather in spite of, holding out, and is entitled to collecting up to par recovery. There is one problem: there is absolutely no enforcement mechanism! And therein lies the rub: because how does a court located on Pearl Street in New York order the Argentina State Treasurer located in Buenos Aires to wire a payment on bonds, via intermediary banks, that Argentina effectively has disowned? It can't." Today, Argentina just made it very clear that once again those desperate for page views by analyzing and overanalyzing an utterly meaningless court decision's implications for rogue sovereign debtor will have to try even harder, following Reuters' report confirming precisely what we said would happen - that Argentina would completely ignore the appeals court decision, and not pay holdout, read Elliott, bondholders.

Now comes the realization that in a broke sovereign world, pretty much anything goes, unless enforced by trade (or naval) blockades, and/or, well, war. And as long as the impaired party is simply a uber-prosperous hedge fund, the probability of either happening is negligible. Said party, however, may continue confiscating Argentinian ships at will: hopefully it is capable of creating an efficient clearing market for three-mast frigates.

From Reuters:

Argentina will not pay creditors who own defaulted bonds despite a U.S. federal appeals court ruling in favor of the holdout creditors, the economy minister was quoted as saying in an interview published on Sunday. The 2nd U.S. Circuit Court of Appeals in New York last month ruled that Argentina discriminated against bondholders who refused to take part in two debt restructurings as the nation tried to recover from a $100 billion default a decade ago. The decision upheld a ruling by U.S. District Judge Thomas Griesa. The South American country appealed that ruling, and on Friday told Griesa that sovereign debt repayments made outside the United States are immune to U.S. law and seizures by holdout bondholders. "Argentina is responsible and will fulfill all commitment it has made to its creditors. ... Our creditors are all those who participated in the two restructuring proposals in 2005 and 2010," economy minister Hernan Lorenzino told newspaper Pagina 12. "We're going to continue to oppose any alternative that goes beyond that. We're going to continue presenting and defending our position to each legal entity." The judge is expected to give a speedy response, given that Argentina is due to start making $3.3 billion worth of payments to exchange bondholders starting Dec. 2.

We, for one, can't wait until this tragicomedy hits the ridiculously politicized US Supreme Court... and CNN's reporting on the decision:

"Argentina reiterated to judge Griesa that the decision taken about pari passu (equal treatment) cannot prejudice creditors who entered the debt swaps," Lorenzino was quoted as saying. "We're going to continue our legal defense in all areas possible, including in the United States' Supreme Court," Lorenzino added.

We conclude this post with what we said last month, as this response from Argentina merely confirms our expectations:

As for the Argentina vs Elliott bare-knuckled match, enjoy it while you can: very soon the Latin American country will likely proceed with yet another round of creeping selective defaults, exchange offers, consent solicitations, and other debt reorganizations, which will make the current free-for-all into a total and epic labyrinth of creditors, interests, bondholder classes, general unsecured claims, and other total confusion which we are confident, will soon lead Elliott to give up in disgust and just walk away.

Those curious what really happens next are urged to take a quick glance at the chart from "Meanwhile in Argentina..."

Finally, we can only hope that other "financial bloggers" who tend to opine on these, and other topics of importance, can at least read the first chapter of "Sovereign defaults for dummies" because endlessly writing on the issue from a presumed position of "expertise" while being wrong constantly and without remorse, does little to augment their credibility.