Posted on 05/31/2017 12:48:28 PM PDT by Sean_Anthony
Unconstitutional nature of Nicolas Maduro’s administration, its unwillingness to hold democratic elections and its systematic violation of human rights
A key Venezuelan opposition leader is accusing Wall Street investment bank Goldman Sachs of “aiding and abetting the country’s dictatorial regime” by purchasing its government-issued bonds.
The allegation, of course, is completely accurate and comes after two months of bloody unrest caused by the failing socialist economy presided over by President Nicolas Maduro.
The amoral agenda-setting elitists of Goldman Sachs reportedly purchased $2.8 billion in Venezuelan debt. That apparently includes an $865 million transaction involving debt from state-run oil company PDVSA, which owns gasoline provider Citgo. Goldman reportedly shelled out 31 cents on the dollar for PDVSA bonds scheduled to mature in 2022.
(Excerpt) Read more at canadafreepress.com ...
A non-profit I used to work for received a huge, and I mean YUGE donation from the, ‘Goldman Girls’ when Dear Old Mom passed away and the daughter is still a YUGE advocate of that non-profit (as am I, but for different reasons and because I know the Principles, personally.)
That said, glad I no longer take a paycheck from them.
The more I know, the less I want to know, you know? ;)
If it is true that Goldman bought those bonds on the SECONDARY market (as reported), then the government of Venezuela received no cash from this resale of “old” bonds by frightened bondholders.
From Goldman’s point of view, to buy a bond at 31 cents on the dollar gives Goldman a potential loss of 31 cents and a potential gain of 69 cents.
Hmmmm...
So Goldman “bet” 31 hoping for a potential gain of 69.
Beats T-bills, doesn’t it?
But isn’t the downside risk on this pretty significant? Venezuela has been swirling like fecal material in a toilet bowl for some time, I see little chance for a happy ending there.
I agree.
The risk of a default on Venezuela’s bonds is strong. That means that the risk that Goldman will lose its “bet” is strong.
Even so, if a new “non-socialist” government of Venezuela redeems those bonds at 50 cents on the dollar, then Goldman will have a gain of 19 cents, for a gross yield of about 60%.
The allegation, of course, is completely accurate and comes after two months of bloody unrest caused by the failing socialist economy presided over by President Nicolas Maduro.
The amoral agenda-setting elitists of Goldman Sachs reportedly purchased $2.8 billion in Venezuelan debt. That apparently includes an $865 million transaction involving debt from state-run oil company PDVSA, which owns gasoline provider Citgo. Goldman reportedly shelled out 31 cents on the dollar for PDVSA bonds scheduled to mature in 2022.
“Goldman Sachs’ financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country,” Julio Borges, president of Venezuela’s National Assembly, wrote in a letter to Goldman Sachs president Lloyd Blankfein.
“Given the unconstitutional nature of Nicolas Maduro’s administration, its unwillingness to hold democratic elections and its systematic violation of human rights, I am dismayed that Goldman Sachs decided to enter this transaction.”
Borges said the National Assembly will open an investigation into the matter and he will recommend “to any future democratic government of Venezuela not to recognize or pay these bonds.”
Good move. Screw ’em.
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