The Argentine debt exchange offer has noisily closed, many of the big dealers are refusing to touch the $20bn in untendered bonds and the Argentine government has even passed a law prohibiting the reopening of the exchange offer. Under those circumstances you would expect those outstanding bonds would have plunged in price to the level of mid-grade wallpaper.

Not quite. From a price of about 30½ to 31 cents on the euro from just before the close of the offer, Argentine bonds are now quoted at 27¾ to 28¼. In spite of the posturing of Argentine officials, some people think they are still worth something.

According to one big holder of untendered bonds, a number of Argentine banks have been bidding for the fund’s paper, apparently because they have the connections to backdate their submission of the bonds to the authorities.

But that does not entirely account for the unnaturally optimistic level of the bid for Argentine bonds. Some of the rich pricing can be accounted for by the strong bid for the “when issued” Argentine bonds offered in the exchange. In spite of the country’s treatment of its past creditors, the new paper has traded with a yield within 20 basis points of Brazil, a performing credit. There is one born every minute.

Peter Bartlett, managing director of Exotix and a connoisseur of emerging market toxic waste, says: “The signals from Argentina seem to be very clear, they have no intention of reopening the exchange. However, were I a betting man, I think that longer term they have to think about restoring some kind of amicable relations with the financial community. I do not think they want to appear spiteful and unfair towards Italian, French and German retail investors.”

Some supposedly well informed people believe the Argentine tender offer could be reopened as soon as July of this year. Others do not think it can happen until after some sort of deal with the International Monetary Fund later this year, with the reopening some time in the spring of 2006.

The IMF’s board will be deciding soon whether the Argentine exchange represented good faith dealing with the country’s private creditors. If it does, the fund will roll over at least half its maturing advances to the country, significantly reducing Argentina’s financing requirements.

More than one holder of Argentine paper has noticed there is an inherent conflict of interest on the part of the fund and its shareholding governments. The same Argentine assets and cash flow would be used to repay both the IMF and the private creditors, so there is a zero-sum game between the two. The IMF, in effect, is both a judge and a creditor class.

One supposedly behind the scenes player can be entirely discounted here: the US government. In the past the IMF has been characterised as an instrument of America’s financial foreign policy. For that to be true the US would need to have a financial foreign policy, which right now it doesn’t. John Snow, Treasury secretary, is preoccupied with tax and Social Security proposals; his deputies responsible for international policy are in the process of moving on to their next resumé entries.

One indication of the weakness of the administration’s international economic policymaking can be found is in the names floated for presidency of the World Bank. Public mockery has possibly eliminated Paul Wolfowitz and Carly Fiorina, but Peter McPherson, president of Michigan State university, is still in the running.

I had the opportunity to meet Mr McPherson in the summer of 2003, when he was the head of the Treasury’s team in Iraq. Much has been written about the failings of the Coalition Provisional Authority and much more will probably be written in prosecutorial briefs by US attorneys seeking to recover misappropriated funds.

Mr McPherson’s performance, however, was in a class of its own. Unlike that of many others who passed through the Republican Guard Palace in Baghdad, it was not motivated by venality.

Mr McPherson told me he had deliberately bypassed the private Iraqi banking sector in setting up facilities to clear letters of credit for Iraqi government agencies, which has helped retard the rebuilding of the country’s financial sector. His team cancelled the debts among Iraqi ministries and state-owned companies, therefore rewarding the least efficient enterprises and punishing the most profitable and effective.

When I inquired why Mr McPherson was appointed to this position I was told by another economic adviser to former ambassador Paul Bremer that he got Dick Cheney his first White House job. Apparently, the vice-president has never forgotten the favour.

But there is no reason why the rest of the world should pick up the bill to pay it back.