Argentina was likely to miss a bond payment Monday, setting it on a course for a possible catastrophic default.
Argentina owes an interest payment to the majority of its creditors, but the government has a 30-day grace period to avoid going into its second default in 13 years.
The U.S. Supreme Court recently turned down Argentina’s attempt to block a lower court ruling that it must pay hedge funds that own bonds left over from its record $100 billion default in 2001.
U.S. District Judge Thomas Griesa urged Argentina on Friday to continue negotiating with the funds that refused to participate in debt swaps in 2005 and 2010. The judge also said it would be illegal for Argentina to make a payment to the majority of its bondholders without also paying more than $1.5 billion to the holdouts.
Griesa appointed a special master last week to facilitate talks because Argentina indicated through its lawyers that it planned to negotiate for the first time with the U.S. bondholders, led by New York billionaire Paul Singer’s NML Capital.
The holdout creditors accused Argentina on Monday of refusing to begin talks.
“There are no negotiations underway, there have been no negotiations, and Argentina refuses to commit to negotiations in the future,” Elliott Management, which runs NML, said in a statement. “Argentina’s government has chosen to put the country on the brink of default. We sincerely hope it reconsiders this dead-end path.”
Later Monday, Argentina’s economy ministry issued a statement saying it would send a delegation to New York to meet with the debt negotiation mediator on July 7.
— Associated Press
Cosmetics maker L’Oreal USA has agreed to settle U.S. complaints that its advertisements for skin care products Lancome Génifique and L’Oreal Paris Youth Code were deceptive, the Federal Trade Commission said Monday.
Under the settlement, L’Oreal USA, a subsidiary of L’Oreal, is barred from making claims about the products that have not been substantiated by scientific proof, the FTC said.
In its complaint, the U.S. agency said L’Oreal claimed the Génifique line of products would cause “visibly younger skin in just 7 days” by prompting genes to “stimulate the production of youth proteins.” The ads for the Génifique products, which cost between $60 and $132, ran from about February 2009 to April 2013.
L’Oreal advertised the Youth Code products by saying they would “instantly improve skin quality while revealing the new youth of your skin,” the FTC said in its complaint. These products start at about $15.
The FTC alleged that L’Oreal had no studies to back up its assertions.
“It would be nice if cosmetics could alter our genes and turn back time,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “But L’Oreal couldn’t support these claims.”
L’Oreal said in its response that the claims that concerned the FTC had not been used “for some time now.” L’Oreal USA spokeswoman Kristina Schake said in a statement that “the safety, quality and effectiveness of the company’s products were never in question.”
● The number of Americans who signed contracts to buy homes shot up in May. The National Association of Realtors said its seasonally adjusted pending home sales index rose 6.1 percent to 103.9 last month. It was the sharpest month-over-month gain since April 2010. The index remains 5.2 percent below its level a year ago.
● Chrysler said it is adding about 696,000 minivans and SUVs to a 2011 recall to fix faulty ignition switches. The latest recall covers some Dodge Journey SUVs and Chrysler Town & Country and Dodge Caravan minivans from the 2007 to 2009 model years. After Chrysler filed paperwork telling the National Highway Traffic Safety Administration about the expansion, the agency said it was dissatisfied, raising concerns about whether the switch problem can stop the air bags from inflating in a crash. NHTSA has asked Chrysler for more information in the case and said it “will take appropriate action based on its findings.”
● The Supreme Court declined to hear Google’s appeal of a ruling that it violated the federal wiretap law when its employees rolled through residential streets with car cameras to shoot photos for the Street View mapping project. The federal appeals court in San Francisco said the information picked up from unencrypted WiFi signals included e-mails, user names, passwords, images and documents. Google had argued that it did not run afoul of the wiretap law because data transmitted over a WiFi network is a radio communication that is readily accessible to the public.
— From news services
● Day-long: Motor vehicle sales for June.
● 10 a.m.: Institute for Supply Management’s manufacturing index for June.