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interestrateripoff

Venezuela The First Oil Producer To Blow?

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The First Oil-Exporting Casualty Of The Crude Carnage: Venezuela

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What best shows that for Venezuela it is essentially game over, is that as the chart below shows, Venezuela’s international reserves declined $1.3 billion in the week after President Nicolas Maduro transfered $4 billion of Chinese loans to the central bank. In other words, the scrambling oil exporter was forced to burn one third of its Chinese bail-out loan to keep itself solvent. The country’s reserves dropped to $22.2 billion today, according to central bank data. As Bloomberg also notes, Maduro on Nov. 18 ordered the Chinese loan proceeds to be moved from an off-budget fund, so that they would show up in reserves and help boost investor confidence in an economy beset by the world’s highest inflation and widest budget deficit. The following day, Venezuelan bonds rose the most in six years in intraday trading. “If the plan was to calm the bondholders, then burning through a third of that money in five working days doesn’t do it in any way,” Henkel Garcia, director of Caracas-based consultancy Econometrica, said in a telephone interview.

Venezuela about to become a Chinese puppet state?

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96% of exports come from oil, some countries are going to be big losers and some big winners.

It may be a blessing in disguise. Oil affords dictators the wealth to gain the control of their population. Saudi, Venezuala, Russia. People will give up many rights if they get some money in return. Norway is the exception.

Perhaps it will lead to places like venezuala getting out of the hands of the totalitarians.

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But they got back their gold early. Maybe anticipating currency wars?

http://www.mining.com/france-wants-its-gold-back-12270/

The repatriation trend began in 2011, when then Venezuelan president Hugo Chavez brought back most of the nation's reserves, the largest in South America.

Germany followed shortly after, but failed to bring all its reserves back.

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Crude Crash Slams Venezuelan Bonds To Close At 5-Year Lows: 21% Yield

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It is no wonder Venezuela is suffering... Venezuelan bond prices have collapsed around 51 - the lowest close in at least 5 years as yields surge to around 21% yield. The market is pricing in extremely high probability of default (around 63% over 2Y, and 80% based on 5Y CDS) which, as Bloomberg reports, is surging as "every $1 drop in oil is around $770 million of lost revenue, so their ability to pay has taken a big hit."

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It may be a blessing in disguise. Oil affords dictators the wealth to gain the control of their population. Saudi, Venezuala, Russia. People will give up many rights if they get some money in return. Norway is the exception.

Perhaps it will lead to places like venezuala getting out of the hands of the totalitarians.

I hope you are right, although the Saudis are so rich that oil would have to drop a lot more for that to happen. A Venezuelan politician once called oil "the Devil's excrement".

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"Cash-Strapped" Venezuela Stares Into The Abyss... And Its Default Risk Goes Parabolic

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Some two weeks ago (when Venezuela CDS was trading at 2300 bps) we previewed what - with almost absolute certainty - would be the first "casualty of the crude carnage" - Nicholas Maduro's little socialist paradise that couldn't: Venezuela. As a reminder, back then we learned that the OPEC member was in such dire straits it had burned through a third of a Chinese' bailout loan in the matter of days. Since then things have gone from bad to worse to freefall and why earlier today Venezuela CDS soared again by several hundred points wider touching 3100 bps (800 wider since our first post) and is now in record wide territory - suggesting the same probability default risk as when just after the Lehman collapse, crude traded briefly as low as $30 - as the bankruptcy vultures start circling over what will most certainly be the next sovereign bankruptcy carcass.

Will she blow???

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Venezuela Default Probability Has Never Been Higher; Maduro "Working To Raise Oil Prices"

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With OPEC slashing demand expectations to 12 year lows, oil prices have re-cratered today putting further pressure on socialist-utopia Venezuala which needs $121/bbl to break-even. Credit risk for the South American nation has exploded today to record highs - implying a 93% probability of default and President Maduro has taken to the airwaves to calm a benefit-needy nation... tensions are mounting...

Will Venezuala blow???

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"Now There's Not Even Soap" Maduro Heads To China To 'Save' Socialist Utopia Venezuela

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Social media is awash with striking images of #EmptyShelvesInVenezuela (#AnaquelesVaciosEnVenezuela) as the evaporation of basic human staples such as toilet paper has now been hyperinflated to total chaos at warehouses and supermarkets. As President Maduro decries the loss of $100 oil "stability", vowing to return oil prices to their rightful places (and heads to China for help), lines reach for miles for milk and soap... and the people defy governmental bans on photographing empty market shelves... "We couldn't find shampoo, so we washed our hair with soap. Now there's not even soap."

Edited by interestrateripoff

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