Retructuring, Default & Debt Reduction

[Brad DeLong]

>Meltzler's idea is that at the announcement of the default, the IMF announces
>that it will buy Argentinian bonds at 60 cents in the dollar.  This 
>removes the
>incentive to panic, because you now know the maximum extent of your loss.
>Anyone who wants to sell, sells to the IMF at 60c.  That won't attract genuine
>vultures, so there's more of a chance of an orderly market.  In fact, given a
>guarantee that there will be liquidity and that they won't get "stuck" with a
>position, it's likely that the everyday traders will continue to make a market
>and the price will never even reach 60.

But if it does reach 60, don't we need a much bigger and well-funded 
IMF? How many bond are out there?

Brad DeLong