Economic ignorance rears its misshapen head on WSO. AB complains about a firm which bought some Zambian debt and expects, you know, the Zambian government to honor that debt. AB, despite writing beautifully about monsoons, does not seem to understand how markets work. If you prevent investors from making money on Zambian debt, then the Zambian government won’t be able to borrow again.
Andrew Goldston claims that
Buying debt to call it in is legal, but dishonorable. In a more civilized age, guys like Sheehan would have been shunned by their neighbors for this kind of crap. But as bringing home money has become its own goal, normative restraints seem to have eased up on using thoroughly evil means to do it.
Does Andrew Goldston actually know anyone who buys debt? He should meet some of the (many) Williams alums involved in this type of work. A great example would be Hans Humes ’87, legendary member of WUFO and big wheel in the Argentinian debt restructuring of a few years ago.
UPDATE: This post was drafted 7 years ago. So, the Argentinian debt restructuring it refers to is not the current one but the last one.