As international holders of Argentine debt braced themselves at
the end of last year for what promised to be one of the biggest
haircuts in history, a few players remained in the game betting
that they could squeeze a little more money out of the markets.
They are exceptional only in their extreme appetite for risk.
For many other traders, getting Argentina right was one of the
easiest and most lucrative trades of 2001.
Topping Out at the Bottom
For the real emerging market gamblers, Argentina offered up a wild ride last year. Many investors came out ahead, but the outlook for the emerging market asset class is uncertain.
The inevitability of the country's financial collapse seemed
clear as early as last February. Yet Buenos Aires, the G-7
governments and International Monetary Fund struggled all year
to prop up Argentina's finances until they finally gave up in
December. This did the country little good, but it did hand
traders generous profits.
Martin Schubert, a veteran of emerging markets distressed
trading and now chairman of European InterAmerican Finance
Corporation, says, "Anybody who went short in...
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