Food for thought: The Hunger Bonds

Discussion in 'Politics, Religion, Social Issues' started by LizKat, Jun 9, 2017.

  1. LizKat macrumors 68040

    LizKat

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    Catskill Mountains
    #1
    Venezuela's been running fire sales on assorted bond issues lately, having defaulted on $950M in payments it owes to Russia. Goldman Sachs is among buyers, for instance, having scarfed up almost three billion bucks of a Venezuelan oil company bond issue for less than $900M, a transaction which earned the open-letter scorn of Venezuela's opposition leader in its Congress (paywalled link) who accused Goldman of "making a quick buck off the suffering of the Venezuelan people".

    There's some question about why the push to sell some of the bond issues continues, since the default date for the Russian payment is in the rear view and there's apparently no publicly recorded Venezuelan debt obligation coming up now until October.

    Meanwhile controversy continues over the American banks' investments in the marked down bonds since sticking money in the paws of Maduro's government may only enable him to continue oppressing his citizens. For possibly unwitting investors in the ETFs that feature assorted Venezuelan debt (and there are many such funds run by American financial institutions), the moral implications are a bit daunting. This is a good read:

     
  2. Zenithal Suspended

    Joined:
    Sep 10, 2009
    #2
    South America has so many troubles apart from two of its civilized countries that are more European in nature. Venezuela's current dire situation makes those other awful countries shine in comparison.
     
  3. darksithpro macrumors regular

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    Oct 27, 2016
    #3
    https://dolartoday.com/

    Wow, talk about hyperinflation. Food rationing lines, black market running rampant, and crime spiraling out of control. This is what happens when you put everyone on welfare and nationalize everything. Also, it didn't help that the leader was Hugo's Bus driver.
     
  4. LizKat thread starter macrumors 68040

    LizKat

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    #4
    Well and this is what happens when one adorns government ministries wiith a lot of military brass, strong-arms away a legitimate recall election effort and prepares to ram through a constitutional adjustment permitting "president for life", having become fairly certain one can do this: several loans from Russia were to pay for weapons Russia sold to the Venezuelan government.

    From the credit derivatives link I had posted up top:

    Russia loaned Venezuela $4 billion in December of 2011 to finance Russia\'s supply of industrial products to Venezuela, mainly defense products, including 92 T-72 tanks, 24 Sukhoi fighter jets, S-300 anti-aircraft missile systems, 15 Mi-35m combat helicopters, 20 Mi-17-1B multipurpose helicopters, 3 Mi-26T transport helicopters, in addition to guerrilla-favorite Kalishnikov rifles.

    and this:

    At the end of 2013 Russian companies sold weapons to Venezuela for $ 2.65 billion and those Russian companies were paid by Moscow under the credit agreement. By April 2015, the Russian Ministry of Finance added another $962 million in finance, giving Venezuela $3.6 billion in credits for the purchase of Russian products.

    Guns or butter, the usual considerations. Let's not put this down to "welfare". Maduro had options. He picked guns.



     
  5. Desertrat macrumors newbie

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    Terlingua, Texas
    #5
    Ah, the joys and benefits of socialism! Venezuela has been going down the tubes since Chavez first took power, and "It ain't got no better with age." (As forecast long ago.)

    GoldmanSucks is amoral when it comes to investing. They don't care if the profit comes from narcotrafficantes or Mother Theresa.

    Chavez/Maduro worked the arms deal in a foolish effort to "prepare for defense against the U.S." Silly, since there is no need for any U.S. effort to harm Venezuela. Those in power have shown their talent for self-destruction.
     
  6. LizKat thread starter macrumors 68040

    LizKat

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    #6
    LOL the more recent arms purchases are surely meant to defend themselves against their paranoid (if well earned but doubtless exaggerated) fears of "dissent" from amongst their own citizenry. You can always tell when crowned heads, or in this case self-crowning heads, are sleeping uneasily in their beds.

    As kids we used to lie in our beds at night and cast the shadows of giant "rabbits" against the wall by holding our fingers up to the night-light... of course we didn't have enough money to buy helicopters and tanks to kill them if they had the temerity to come down off that wall and try to hurt us.
     
  7. Desertrat macrumors newbie

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    #7
    Maduro has recently created a 100,000 member equivalent of the Red Guard or Brownshirts, armed wih AK-47s in the ongoing effort to control dissent.
     
  8. LizKat thread starter macrumors 68040

    LizKat

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    #8
    It certainly doesn't look like he expects to transfer power peacefully... or at all, ever. The OAS had called for support of the Venezuelan opposition's referendum effort last year, but by summer's end Maduro had managed to quash it. The deterioration since then is already horrendous, and it's pretty clear Maduro's decided he's not going anywhere, or not without leaving some incredible carnage behind unless someone inside can prevent it, which seems doubtful thanks to how he has laced so much brass --and ladled $$$ onto them-- into his government. What can the OAS do next? I really wonder, and haven't kept up with it in the news thanks to spending more time reading about a more local wannabe strong-arm ruler.
     
  9. DrewDaHilp1 macrumors 6502a

    DrewDaHilp1

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    #9
    Who in their right mind would buy bonds from a country that has nationalized foreign companies in the past?
     
  10. LizKat thread starter macrumors 68040

    LizKat

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    #10
    For 31c on the buck and having a good sales pitch to get them back outta the barn fast if it looks like 13c instead of 73c is on the path forward, I'd say GS for openers although they're certainly not alone. The big casino has a lot of players.

    And their "amoral" character as @Desertrat put it is probably a generous characterization. After all since Venezuela doesn't have any publicly recorded debt due until October, and since these fire sale transactions are not purchases from other investors but from the Venezuelan central bank, it's entirely possible that the cash that flow to Maduro right now then goes directly to Russia to buy even more weapons... but COD now since they defaulted on loans from Russia for earlier weapons buys.

    Why not? Maybe Russia says to Madruo well, hmm... loaning you money to buy our weapons didn't work out that great since we ended up eating a lot of it, but we still need to keep our weapons makers happy so if you got cash, we'll overlook the fact you owe us billlions already, if you plunk $US on the barrelhead for what we sell you going forward.

    I dunno. I hope US weapons makers are not selling to Venezuela. Bad enough US investment houses are shoveling dough into Maduro's maw. Money that then ends up in Russia long enough to get paid to whoever messes with our cybersetups on Russia's directives? It's a small world these days and getting smaller.
     
  11. VulchR macrumors 68020

    VulchR

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    #11
    You are confusing authoritarianism with socialism. The two are not the same.
     

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