How Argentina Blew Its Big Chance

The markets may have shrugged off a default, but there are reasons for alarm

If you're going to have an economic crisis, do the rest of the world a favor: signal your intentions well in advance. That's one lesson (there are others) from the default by Argentina on $132 billion of debt. So far, the markets have hardly blinked, and the reason is plain: this train wreck has been coming for two years, giving those foreign banks holding Argentine paper plenty of time to hedge their bets or make provisions against losses. The default, says Nariman Behravesh, chief global economist at DRI-WEFA, an economic consultancy in Massachusetts, was so well anticipated that "foreign investors who...

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