Sovereign defaults: a thought exercise

I’ve been reading the day-by-day progress reports about Argentina’s debt renegotiations with bemusement.

Breathless reporting of the details of the Argentine government’s offer to bondholders – and their non-attributed expressions of disappointment in response –tend to presuppose there is doubt in the outcome.

I just don’t see it.

For months I’ve been assuming that the negotiations will be a bust and ultimately Argentina will default. As I’ve stated previously, the main reasons are that Argentina knows it has little prospect of re-accessing international markets during this administration, even with a deal.