Argentina has defaulted on its debt after failing to reach an agreement with creditors by midnight in New York.
The default is the second in the last 13 years for the South American country and comes after a protracted wrangle with much mud slinging and little face-to-face negotiation.
In what has become the Argentine rhetoric, economy minister Axel Kicillof said that he had reached an impasse with the "vultures" and that Argentina was simply not in a position to pay what the group of hedge funds was asking.
Before Kicillof had made the grim announcement Standard and Poors had already dumped Argentina's credit rating down to "selective default", due to the missing of a £539m interest payment on its debt by deadline time.
There had even been whispers that Argentine businesses might step in to prevent the collapse, but the speculation never materialised.
The default is likely to lead to inflation spikes and put pressure on Argentine foreign-currency reserves as well as making it harder for the private sector and state institutions to borrow. The inflation rate in Argentina is already seen to be far above official rates, possibly as high as 25 per cent.
The underlying issue is that Argentina reached a deal with a number of bondholders during its previous default in 2001, with creditors agreeing to cut the amounts they would receive. The group of hedge funds with whom Argentina has been negotiating gambled on an ailing economy and then refused to agree to a change in terms.
Legally, however, should Argentina offer more favourable conditions to one group of bondholders it would have to offer the same rate to all, something it says it simply cannot afford.
The country had tried to service the rest of its debt, but New York judge Thomas Griesa said that Argentina could not selectively pay creditors and would have to pay all of them.