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Argentina's New President Faces Economic Turmoil; Bullish Buys CoinDesk
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Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It is Tuesday, Nov. 21. In today's briefing, Argentina's President-elect Javier Milei has a long way to go to reverse recurring cycles of deep and destructive economic contractions brought on by policies that force governments to routinely spend more. A company run by former New York Stock Exchange President Tom Farley said that it has acquired crypto-focused media company CoinDesk.
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Argentine President-elect Javier Milei will take office in early December. PHOTO: AGUSTIN MARCARIAN/REUTERS
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Argentina’s Economic Turmoil Is Getting Worse
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Argentina has long been trapped in recurring cycles of deep and destructive economic contractions brought on by policies that force governments to routinely spend more than they collect through taxes and other income, economists say.
President-elect Javier Milei will take office in early December with the task of reversing unsustainable spending policies that have depleted government coffers and caused inflation and interest rates to soar.
Successive Argentine governments have resorted to printing money after exhausting other funding options such as borrowing billions of dollars from abroad, and the highly indebted country now finds itself cut off from global financial markets.
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“Argentina’s macro picture is in indisputable disrepair.”
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— Alberto Ramos, economist at Goldman Sachs
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Argentina May Get Currency Solution Under New President
Acting on the peso's exchange rate could be among the first measures taken by Argentina's new president, but this could raise the public debt and entail another restructuring of the country's heavy international debts, economist William Jackson at Capital Economics writes in a note. The peso looks overvalued, and ending foreign-exchange restrictions—as promised by newly elected rightwing president Javier Milei—would redress this, improving external competitiveness and boosting growth in the medium term, Jackson says. But doing so would also drive public debt higher and could lead to the International Monetary Fund demanding a restructuring of the debt as a condition for further financing, he says. "It seems most likely to us that the Fund will shift away from its recent leniency towards Argentina regarding fiscal and exchange rate policy," Jackson says.
—Joshua Kirby
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Tom Farley’s crypto exchange, Bullish, bought 100% of CoinDesk in an all-cash deal. PHOTO: SIMON DAWSON/BLOOMBERG NEWS
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Firm Led by Former NYSE President Buys CoinDesk
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A company run by former New York Stock Exchange President Tom Farley said on Monday that it has acquired crypto-focused media company CoinDesk.
Bullish, the crypto exchange run by Farley, bought 100% of CoinDesk in an all-cash deal. Financial terms of the deal weren’t disclosed. Digital Currency Group, the parent company of CoinDesk, acquired the media company in 2016 for $500,000.
The deal comes a year after CoinDesk broke news about Sam Bankman-Fried’s crypto empire that would ripple through the market and compound the financial troubles of its parent company. As part of the broader fallout in the crypto industry after FTX’s collapse, CoinDesk’s parent company DCG became ensnared by its own financial troubles.
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Lawyer Inaction Draws Attention in Boy Scouts Bankruptcy
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A bankruptcy judge questioned lawyers for 375 sexual-abuse claimants who said they were confused by the claims form in the Boy Scouts bankruptcy and mistakenly picked a quick $3,500 payment.
Judge Laurie Selber Silverstein on Monday said individuals who are represented by plaintiffs’ lawyers shouldn’t have had to review a 23-page ballot on their own.
The survivors are seeking court approval to change their selection to pursue potentially greater compensation than the quick $3,500.
A trustee overseeing a compensation fund of more than $2.4 billion, however, said allowing those survivors to change their votes could hold up the process for roughly 82,000 other claimants.
The judge said she would accept more legal briefings about the matter and planned to hold another hearing next month.
“They had counsel who are supposed to be representing them,” Judge Silverstein said to one plaintiffs’ lawyer at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. “If you’re getting 30% to 40% of the recovery of your client, maybe you ought to talk to them about the ballot as it’s a pretty important part of the case.”
She also questioned another plaintiffs’ lawyer about why, if his clients knew by early 2022 that they picked the wrong payment option, his firm didn’t raise concerns before the Boy Scouts plan got approved in September 2022.
He responded that they didn’t think anything would bar his clients from later changing their compensation preference.
Judge Silverstein said she wasn't even quite sure what to do with that. "You knew there was a mistake. Instead of taking prompt action, you waited,” she said.
–Becky Yerak
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Timber Pharmaceuticals Files for Chapter 11
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Timber Pharmaceuticals filed for chapter 11 bankruptcy protection on a day when LEO Pharma terminated a merger agreement that didn’t receive a sufficient stockholder vote at a Friday meeting.
Timber signed a stalking-horse asset-sale agreement with LEO Pharma. Timber, which focuses on treatments for rare and orphan dermatologic diseases, previously warned that there was substantial doubt about its ability to continue as a going concern and said it would “likely need to seek the protection of the bankruptcy courts” if the merger wasn’t completed.
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Office landlords face hybrid-work patterns that have companies cutting back on their workspace. PHOTO: AMIR HAMJA/BLOOMBERG NEWS
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Office Stocks Rallied Last Week but Real-Estate Problems Remain
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Shares of battered down office landlords had their biggest one-day rally in three years last week, after inflation data came in lower than anticipated and expectations rose that the Federal Reserve was done raising interest rates.
Shares of office real-estate investment trusts soared an average of 11.5% last Tuesday, according to real-estate analytics firm Green Street. That is the largest daily increase since November 2020, when an even larger rally was sparked by the announcement of a Covid-19 vaccine.
But most office stocks failed to hold all those gains. The surge in share prices reflected a number of factors, but none that fundamentally changed the long-term outlook for the sector, analysts said.
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There are 20 million units of uncompleted and delayed presold homes across China, according to one estimate. PHOTO: BLOOMBERG NEWS
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China’s Unfinished Homes Problem Keeps Getting Worse
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China’s housing market has a big problem: millions of unfinished homes that were sold but not delivered.
Solving that is crucial for a recovery, but the problem keeps getting bigger. More property developers are defaulting on their debt and adding to the logjam of construction delays and stalled residential developments across the country.
Potential home buyers have lost confidence in the housing market because they fear developers won’t be able to complete their projects. That sentiment has created a vicious circle as falling new home sales imperil even more companies. Households that have been waiting for years for the apartments they paid for have also become increasingly desperate for a resolution.
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