S&P Downgrades Venezuela's Credit Rating

[The Straight Story]

S&P Downgrades Venezuela's Credit Rating

The rating agency Standard & Poor's has downgraded Venezuela's credit rating, citing the country's political risk as a key weakness.

S&P lowered the country's sovereign currency rating once notch Friday from BB¯ to B+ with a stable outlook.

In a statement, S&P said "changing and arbitrary laws, price and exchange controls, and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity," and have weakened Venezuela's economy.

The agency also said uncertainty about the health of Venezuelan President Hugo Chavez has added to the country's economic risks.

http://www.voanews.com/english/news/americas/SP-Downgrades-Venezuelas-Credit-Rating-128118688.html

[dkf]

1. Why would anyone buy a Venezuelan bond anyway?

Crazy.

[metalbot]

6. Because they pay 14% interest

So if the government doesn't default, the returns are pretty nice. Of course, the reason that they have to offer those returns is that the risk of default (and losing your entire value) is non-trivial.

[Hydra]

2. I wonder if this has to do with the gold recall

Can't think that they need a lot of credit, though. IMF adverse people tend not to be in massive debt.

[hughee99]

4. Venezuela's debt is about $55 billion (USD)

or about 19% of their GDP. Not an unmanageable amount of debt at all. I don't think they need a ton of credit, but the people doing the ratings prefer to see countries holding such assets in other countries, because it supposedly makes it less likely they'll be shenanigans.

[Hydra]

5. True

It's like when you have a credit card and you pay it off every month. You're not a "good customer."

Besides, the less debt there is in the world, the less money is flowing. Have to incentivize people to take more debt on and promise high growth.

[RB TexLa]

7. High growth is not worth taking on debt.

[Hydra]

9. I don't think so either

But that's how our system works. Give out debt as money and have people pay back with interest.

Endgame: Out of control growth until the system eats itself alive.

[socialshockwave]

3. Maybe if good ol' Hugo stopped nationalizing EVERYTHING

there wouldn't be a need for a downgrade.

[sabrina 1]

10. I suppose that's why S&P down-graded the US

Because we have nationalized everything?

I doubt anyone cares much about a downgrade from an Org that should have been prosecuted, and hopefully will be, for its roll in the Global Financial Meltdown.

It's stunning, the irony of a totally discredited rating agency still functioning and still claiming to any kind of credibility.

Orwell would roll over in his grave. Even he couldn't have predicted the upside world we live in.

[banned from Kos]

12. Credit Raters have First Amendment immunity - "opinions" are just that

Dodd-Frank is changing that - supposedly. They are challenging.

[dd2003]

8. 14% Is a nice return

And this is just political fun. Chavez demanded physical gold.... Nothing safer... The gold standard will be here sooner then we think

[marmar]

11. I can hear Hugo saying, "Bésame el culo marrón."

To hell with the crooks at S&P.

[sabrina 1]

13. He probably will say it out loud. And he isn't the only one

It's almost laughable that this organization has the gall to rear its head anymore, rather than being grateful the US Government has chosen not to go after the criminals, S&P included, who destroyed this country's economy.

[Tipring]

14. Hugo

I kindda like Hugo.  He called W the devil.  He seems to know
how to treat big oil companies a hell of a lot better than we
do.
I remember about 2months ago when Tillerson, CEO Exxon-Mobile
threaten the economy of the USA in a Senate Committee meeting
when he was ask to justify the $4 BILLON he and his criminal
CEO's extort from taxpayers each year in the form of corporate
welfare.  Senator Schumer was asking various questions when
Tillerson made his treasonous threat to spend Exxon-Mobile
money elsewhere.

Obama should have had the AG charge him with treason and have
an FBI swat team arrest him in the middle of the night in his
underwear while cameras rolled.  

That little weasel would have never done that in Venezuela
with Hugo around.  Tillerson thinks he is bigger, more
important and to be feared more than the USA.
Sadly, he may be right.