Ecuador pays, Zambia loses

I’m back! Didja miss me? I missed you. I was in England, mainly (when I wasn’t

stuck on the tarmac at JFK), where even cafés encrypt their wifi. Most

annoying. But even if internet access was hard, I did get to pick up the Guardian

– where the Zambia

vulture fund story made the front page! If you want a great overview of

the case and the issues, however, you should read Alan

Beattie in the FT, who had the great good sense to talk to my friends Anna

Gelpern and Brad Setser, both of whom really know their onions on this sort

of thing. And while we’re in the sovereign-debt part of the markets, I haven’t

even been able to mention here that Ecuador paid its bond coupon in full and

on time! (Great headline in the IHT: "Ecuador’s

on-time bond payment confuses economists", over an AP story which quotes

the perspicacious Ramiro Crespo describing Ecuador’s debt policy as "erratic,

arbitrary, capricious and manipulative".) I think Crespo might be right

in seeing Venezuela’s fingerprints all over the decision. Venezuela’s public-finance

technocrats are rather sophisticated, and know how much a debt default would

amount to shooting oneself in the foot.

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