Expand chart
Source: Risky Finance; Chart: Axios Visuals

Context: Local debt is riskier. The U.S. government can print money while the city of Detroit, or the state of Illinois, cannot. That's why the U.S. government borrows at much lower rates than Detroit or Illinois.

  • The same is true for nearly all the countries in the world. Countries can bail out cities and other sub-national entities, but if the country itself runs into trouble, it simply taxes those entities to raise the necessary funds.

Argentina is the exception to the rule. As Nick Dunbar of Risky Finance explains, some Argentine local governments, like the city of Buenos Aires or the province of Neuquén, are considered less likely to default than the sovereign. As a result, their bonds trade at significantly higher prices than the equivalent sovereign bonds do.

  • By the numbers: Argentina's sovereign bonds generally trade at around 50 cents on the dollar. The debt of Mendoza Province, by contrast, trades around 75 cents, while Neuquén trades at 85 cents. And the bonds of the city of Buenos Aires trade at 99 cents on the dollar.

The bottom line: Creditworthiness is a function of the debtor's ability and willingness to pay. In Argentina, both of those things can sometimes be found more at the regional level than within the national government.

Go deeper: Trump says he will restore steel and aluminum tariffs against Brazil and Argentina

Go deeper

Updated 51 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 31,778,331 — Total deaths: 974,436 — Total recoveries: 21,876,025Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 6,943,078 — Total deaths: 201,930 — Total recoveries: 2,670,256 — Total tests: 97,459,742Map.
  3. Health: CDC director says over 90% of Americans have not yet been exposed to coronavirus — Supply shortages continue to plague testing.
  4. Politics: Missouri Gov. Mike Parson tests positive for coronavirus — Poll says 51% of Republicans trust Trump on coronavirus more than the CDC.
  5. Technology: The tech solutions of 2020 may be sapping our resolve to beat the coronavirus
  6. Vaccines: Johnson & Johnson begins large phase 3 trial — The FDA plans to toughen standards.
  7. Sports: Less travel is causing the NBA to see better basketball.
  8. Future: America's halfway coronavirus response

Biden: Breonna Taylor indictment "does not answer" call for justice

Former Vice President Joe Biden. Photo: Leigh Vogel/Getty Images

Former Vice President Joe Biden on Wednesday condemned the grand jury indictment of a Louisville police officer who entered Breonna Taylor's home in March in a botched drug raid that led to her death, saying in a statement the decision "does not answer" for equal justice.

The big picture: Biden called for reforms to address police use of force and no-knock warrants, while demanding a ban on chokeholds. He added that people "have a right to peacefully protest, but violence is never acceptable."

Trump refuses to commit to peaceful transfer of power if he loses

President Trump repeatedly refused to say on Wednesday whether he would commit to a peaceful transition of power if he loses the election to Joe Biden, saying at a press briefing: "We're going to have to see what happens."

The big picture: Trump has baselessly claimed on a number of occasions that the only way he will lose the election is if it's "rigged," claiming — without evidence — that mail-in ballots will result in widespread fraud. Earlier on Wednesday, the president said he wants to quickly confirm a replacement for Justice Ruth Bader Ginsburg because he believes the Supreme Court may have to decide the result of the election.

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Subscription failed
Thank you for subscribing!