The Morning Brief: Argentina Ratchets Up Rhetoric in Debt Fight

Argentina has taken to the press to further express its disdain over a U.S. court ruling that it must pay out bond obligations to its hedge fund creditors, putting advertisements in both the New York Times and the Wall Street Journal. U.S. District Judge Thomas Griesa has warned the country that it could be held in contempt, Bloomberg reports, if there is not “a cessation of false and misleading statements by the republic,” he said. “If there is not, it will be necessary to consider contempt of court.” Argentina stated in the ads that its attempts to pay bondholders have been blocked by Griesa.

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Irving Picard, the trustee leading the charge to recoup funds for investors of Bernard Madoff, hit a snag in his efforts. A U.S. appeals court refused to void its settlement rulings that said Madoff feeder funds had to fork over almost $500 million back to investors. Circuit Judge Robert Sack said the trustee could not prove that settlements with manager J. Ezra Merkin and Fairfield Greenwich Ltd. “would in fact have an immediate adverse economic consequence for the BLMIS estate, or that the estate is likely to suffer irreparable harm,” Reuters reports.

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Third Point’s Daniel Loeb is bullish on “decisive” action from the Federal Reserve, Bloomberg reports. The New York-based manager, speaking on a conference call for his Bermuda-based Third Point Reinsurance, feels the second half of 2014 is primed to be one of note as the Fed finishes up its bond purchase taper.

Likewise, Loeb sounded upbeat on event-driven strategies in the coming months, noting, “We expect market volatility will create compelling entry points across the capital structure during the second half of the year.”

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Happy birthday to Long-Term Capital Management co-founder John Meriwether. The former Salomon Brothers bond trader-turned hedge fund manager turned 67 on Sunday. His firm LTCM is well-known for imploding in 1998 after the Asian and Russian financial crises, despite the big name academics involved in the fund, such as Nobel Prize winners Myron Scholes and Robert Merton. Meriwether’s subsequent fund, JWM Partners, shut down in 2009 after a period of losses.

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