Investor’s Insanity: Argentina’s 100 Year Bonds
They just sold $2.75b USD worth of 100 year bonds at a 7.125% rate, and their subscription was 3.6X subscribed.
Why is this considered insanity?
Let's see when and how many times Argentina has defaulted on bonds, and how much time between the last bond default, shall we?
#1 - 1827 - no prior
#2 - 1890 - 63 years
#3 - 1951 - 61 years
#4 - 1956 - 5 years
#5 - 1982 - 26 years
#6 - 1989 - 7 years
#7 - 2002 - 13 years
#8 - 2014 - 12 years
Average time to default: 26 years
Median time to default: 13 years
(Source: World Economic Forum)
If we aren't at the cusp of madness yet, I am more than willing to be entertained to see what will top this insanity.
You don't need to trust me to know that this is not going to end well.