Venezuela: Probabile Default prossimo venturo?

[Amati75]

Venezuela Default Almost Certain, Harvard Economists
Say

By Anatoly Kurmanaev, Katia Porzecanski and Sebastian BoydOct 13, 2014 10:00 PM ET


Venezuela will probably default on its foreign debt as a shortage of dollars makes it impossible for the government to meet its citizens’ basic needs, Harvard University economists Carmen Reinhart and Kenneth Rogoff said.
The economy is so badly managed that per-capita gross domestic product is 2 percent below 1970 levels, the professors wrote in an column published by Project Syndicate yesterday. A decade of currency controls has made dollars scarce in the country with the world’s biggest oil reserves, causing shortages of everything from deodorant to airplane tickets.
“They have extensive domestic defaults and an economy that is really imploding,” Reinhart said in a telephone interview from Cambridge, Massachusetts. “What they really need to do is get their house in order. If an external default would trigger such a possibility, that’s not a bad thing.”
The suggestion that the country stop servicing its bonds comes a month after Harvard colleagues Ricardo Hausmann and Miguel Angel Santos wrote that Venezuela should consider defaulting given that it was piling up arrears to importers. Venezuela owes about $21 billion to domestic companies and airlines, according to Caracas-based consultancy Ecoanalitica.


Venezuelan debt is the riskiest in the world, yielding 15.42 percentage points more than similar maturity Treasuries, according to data compiled by JPMorgan Chase & Co. The cost to insure the country’s bonds against default with credit-default swaps is also the highest for any government globally.
“Given that the government is defaulting in numerous ways on its domestic residents already, the historical cross-country probability of an external default is close to” 100 percent, Reinhart and Rogoff wrote in their piece.
Bond Decline

The country’s bonds lost 1.9 percent on Sept. 5, the day Hausmann and Santos published their article, and 4.4 percent on Sept. 8, the next trading day.
The two-day decline was the steepest in more than a year. President Nicolas Maduro dubbed Hausmann a “financial hitman” and “outlaw,” and instructed the attorney general and public prosecutor to take “actions” against the Venezuelan-born professor for seeking to destabilize the country.
For Venezuela to recover, Maduro must unwind policies that have fueled annual inflation of 63 percent and eroded wages, Reinhart said. The poverty rate has risen since Maduro came to power 18 months ago, climbing to 32 percent at the end of last year from a record low 25 percent in 2012, according to the National Statistics Institute.
“They’re paying no one,” Reinhart said. “At those levels, inflation is certainly expropriation.”
Debt Payments

Discontent over rising prices, soaring crime and mounting shortages sparked nationwide protests in February that were put down by soldiers and police. Forty-three people will killed in clashes, according to the public prosecutor’s office.
Venezuela paid back $1.5 billion of debt that matured Oct. 8. It dipped into its international reserves to make the payment, pushing them to an 11-year low of $19.8 billion. The payment didn’t end the decline in the country’s bonds, which have lost 22 percent in the past three months.
State-owned oil company Petroleos de Venezuela SA is due to repay $3 billion of bonds maturing on Oct. 28. It has already bought back 60 percent of the debt, a company official said Oct. 10. The company will also pay interest on bonds due in 2017, 2027 and 2037 on Oct. 14, it said in an e-mailed statement yesterday.
Rogoff is the former chief economist at the International Monetary Fund and author of a 1985 paper suggesting central banks should focus more on low inflation than spurring employment.
Debt Ratios

Rogoff and Reinhart wrote the 2009 book “This Time Is Different: Eight Centuries of Financial Folly,” which predicted that the recovery from the financial crisis would be a “protracted affair,” featuring extended declines in asset markets, large contractions in output and employment, and an explosion of government debt -- similar to the aftermath of past financial crises.
Reinhart and Rogoff argued in a 2010 paper that high government debt depresses GDP growth. In developing countries, high debt-to-GDP ratios may also spark inflation, they wrote.
In 2013, the professors acknowledged they had inadvertently left some data out of their calculations for the paper, which had been used by some policy makers to justify austerity in the U.S. and Europe, after researchers at the University of Massachusetts at Amherst questioned their methods. The professors said the error didn’t change the thrust of their research.
To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net; Anatoly Kurmanaev in Caracas at akurmanaev1@bloomberg.net; Katia Porzecanski in New York at kporzecansk1@bloomberg.net
To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net; Andre Soliani at asoliani@bloomberg.net Robert Jameson

[Amati75]

Venezuela Bonds Fall as Harvard Economists Predict Crisis


Venezuela Bonds Fall as Harvard Economists Predict Crisis - Bloomberg

[Guy Fawkes]

Beh, non è che gli economisti di Harvard abbiano mostrato capacità previsorie superlative, viste le continue sorprese che questa crisi ha riservato senza che nessuno riuscisse ad anticipare la situazione.
In questo caso penso che stiano tentando di vincere facile, il Venezuela è veramente allo stremo, non potrà continuare così ancora a lungo; certo hanno trovato un alleato solido nella Cina, ma saranno presto costretti a cedere ancora più assets strategici a Pechino, che però potrà coprire la situazione solo a breve termine, dopo di che il Governo di Caracas dovrà gestire da solo la situazione in cui si è cacciato.

[ziomaio]

piu che possibile direi probabile

[Amati75]

Venezuela Goes From Bad to Worse as Oil Prices Plummets

Since becoming Venezuela’s president 18 months ago, Nicolas Maduro has contended with chronic shortages of everything from toothpaste to medicine, the world’s fastest inflation and sinking foreign reserves.
His predicament is about to get worse. Prices for Venezuela’s oil, which accounts for 95 percent of the nation’s exports, are tumbling to a four-year low and threatening to choke off the export dollars the country needs to pay its debts.
“It’s a direct hit on tax revenues,” Lars Christensen, chief emerging-markets economist at Danske Bank A/S, said in a telephone interview from Copenhagen. “There is nothing good to say about the state of Venezuela’s economy, and this isn’t helping.”
The slump in oil prices comes as Harvard University economists Carmen Reinhart and Kenneth Rogoff warned this week that Venezuela is almost certain to default on its foreign-currency bonds. Deepening concern the South American country will renege on its debt payments triggered a selloff in its $4 billion benchmark bonds due 2027, causing yields to soar to a five-year high of 17.87 percent this week.
Venezuela’s Information Ministry didn’t respond to an e-mail seeking comment, and a media official for the state oil producer Petroleos de Venezuela SA declined to comment on the potential impact of falling oil prices.
Venezuela has enough resources in bolivars and foreign currency to meet all of its obligations, Maduro said on state television on Oct. 9.
A day later, he gave instructions to ask for an emergency meeting of the Organization of Petroleum Exporting Countries, Venezuela’s foreign ministry said on its Twitter account.
Oil Sinks

The price of Venezuela’s oil basket has declined 18 percent from a nine-month high in June to $82.72 per barrel, the lowest since December 2010. The decline is in line with the drop in benchmark Brent crude prices sparked by a combination of a slowing global economy and rising world output.
“This is a huge shock for Venezuela more than for any other country,” Alberto Ramos, chief Latin American economist at Goldman Sachs Group Inc., said by phone from New York. “They have to either adjust spending or print more money, and if they print more money that means their hyper-inflation gets even more hyper. Inflation is already running at a very high level and completely unanchored, so this is like a wildfire.”
Consumer prices rose 63 percent in the 12 months through August, the most among 85 countries tracked by Bloomberg. Venezuela had a budget deficit worth 16.9 percent of GDP last year.
‘Much Lower’

The drop in crude prices will reduce government revenue in Venezuela by about $10 billion a year, according to Francisco Rodriguez, an economist at Bank of America Corp.
Oil taxes accounted for about 30 percent of central government revenue last year, below the 41 percent five-year average. PDVSA’s operating surplus accounted for 17 percent of revenue from government-owned companies, compared with an average 26 percent over the last five years, according to a regulatory filing.
Still, he recommends investors buy Venezuelan bonds, since Maduro could offset the decline by cutting gasoline subsidies or devaluing the currency.
“Even at this oil price, the likelihood of a Venezuela default is much lower than implied by current bond prices,” he said by phone from New York.
Default Odds

The cost of protecting Venezuela’s debt against non-payment with five-year credit-default swaps, already the highest in the world, soared 2.13 percentage points this week to a five-year high of 19.89 percentage points yesterday, according to data provider CMA.
The level implies a 75 percent chance that Venezuela will default in the next five years.
PDVSA’s bonds due November 2017 fell 4.63 cents yesterday to 68.26 cents on the dollar, pushing yields to a record high of 23.76 percent. The company has $3 billion of debt payments due on Oct. 28.
Venezuela paid back $1.5 billion of debt that matured Oct. 8, reducing foreign reserves to an 11-year low of $19.8 billion.
Dwindling Cash

The country’s dwindling cash and billions of dollars in arrears prompted Reinhart and Rogoff to suggest in a column published by Project Syndicate on Oct. 13 that Venezuela is better off defaulting.
“Given that the government is defaulting in numerous ways on its domestic residents already, the historical cross-country probability of an external default is close to” 100 percent, they wrote in their article.
Venezuela, whose economy will shrink 3 percent this year, owes about $21 billion to domestic companies and airlines, according to Caracas-based consultancy Ecoanalitica.
“Under normal circumstances this would be a negative shock,” Goldman Sachs’s Ramos said. “It’s a major oil producer, and this is a major loss of income.”
To contact the reporters on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net; Pietro D. Pitts in Caracas at ppitts2@bloomberg.net
To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.netLester Pimentel, Bradley Keoun

Venezuela Goes From Bad to Worse as Oil Prices Plummets - Bloomberg



Conseguenze di riserve in calo in Venezuela oltre alle possibilita' di default?

Il Venezuela regala petrolio a Cuba ed altri paesi della regione.
Nel caso di Cuba questo regalo (ripagato con "servizi", esempio invio di dottori, ce pero' non servono per pagare i debiti), implica che Cuba può' usare i Dollari (tanto odiati) che riceve per importare e colmare il deficit alimentare dell' isola, che grazie alle fantastiche produzioni socialiste, implica che importa la maggiorparte di quello che "mangia". In assenza del regola del Venezuela, gli toccherebbe pagare pure il petrolio, e come Cuba ci sono altri paesi della regione che sostenevo i deliri di Chavez, che fino a quando il petrolio cresceva poteva far credere che il suo "sistema" funzionasse.

Insomma, da un defualt del Venezuela, aparte indirettamente, si vedrebbero conseguenze molto dirette anche in altri paesi.

[Guy Fawkes]

Conseguenze di riserve in calo in Venezuela oltre alle possibilita' di default?

Il Venezuela regala petrolio a Cuba ed altri paesi della regione.
Nel caso di Cuba questo regalo (ripagato con "servizi", esempio invio di dottori, ce pero' non servono per pagare i debiti), implica che Cuba può' usare i Dollari (tanto odiati) che riceve per importare e colmare il deficit alimentare dell' isola, che grazie alle fantastiche produzioni socialiste, implica che importa la maggiorparte di quello che "mangia". In assenza del regola del Venezuela, gli toccherebbe pagare pure il petrolio, e come Cuba ci sono altri paesi della regione che sostenevo i deliri di Chavez, che fino a quando il petrolio cresceva poteva far credere che il suo "sistema" funzionasse.

Insomma, da un defualt del Venezuela, aparte indirettamente, si vedrebbero conseguenze molto dirette anche in altri paesi.

Legami politico-commerciali particolarmente stretti tendono a dare il via a effetti a catena.
In ogni caso non penso sia utile restare col fiato sospeso ad aspettare lo svolgersi degli eventi: il default non è dietro l'angolo, e il crollo non sarà repentino e totale, quanto un progressivo afflosciarsi.