And the Money Kept Rolling in (And Out): Wall Street, the Imf, And the Bankrupting of Argentina: Wall Street, the IMF and the Bankrupting of Argentina

At the same time, however, Argentina's errors were indulged by the policy elites of Washington and the financial elites of Wall Street. The IMF may be fairly accused of what might be called "poster-child syndrome" in the enthusiasm it manifested for the country's adoptions of reforms that the Fund had favored.

Taylor was trying to make the case that the Argentine crisis was handled better than is commonly understood. This is the theory: Although IMF rescues failed to keep Argentina from defaulting and devaluing, they still had important benefits, and this applies to the second rescue in August 2001 as well as the blindaje in December 2000. Markets worldw

The hot-potato game over the presidency finally ended with the selection by Congress of Senator Eduardo Duhalde, the Peronists' candidate in the 1999 presidential election. Then came the long-expected but nonetheless seismic shift: At Duhalde's behest, Congress approved legislation on January 6, 2002, ending the convertibility system and fixing the

An oft-repeated joke about the IMF is that its initials stand for "It's Mostly Fiscal." The humor stems from the Fund's seeming obsession with bludgeoning countries into cutting spending or raising taxes, as if there were no economic problem that a lower budget deficit or (better yet) fatter surplus wouldn't cure.

The emerging-markets world has its own indices that many portfolio managers are expected to outperform if they want to keep their jobs and earn tidy bonuses. For the buy-siders who were purchasing Argentine government bonds, the most commonly used by far was the Emerging-Markets Bond Index-Plus, or EMBI-Plus, which was developed by J.P. Morgan.

Heading the IMF are two officials chosen by rich countries.

In magnitudes that Argentines could only dream of, the U.S. government has been spending more than it raises in taxes, and American consumers and businesses have been importing more goods than they have been exporting, with borrowing from foreigners covering much of the gaps. The record budget deficit of about $413 billion for 2004, and the record

"exploding debt dynamics." It refers to an ever-increasing debt-to-GDP ratio, with higher interest payments and low growth driving the ratio inexorably upward with the passage of time.

the second loan "only postponed the inevitable and, by raising the debt burden, also meant that the costs of the eventual collapse were all the greater."