12 ms·

Venezuela just defaulted, moving deeper into crisis

101 points by Shivetya 9y ago

nickthemagicman 9y ago
I love how the article claims the govt was socialist when in reality Venezuela is a thinly veiled dictatorship that just calls itself socialist.
- macspoofing 9y ago
  No true Scotsman.
- seibelj 9y ago
  There is no quintessential “socialist” country just as there is no quintessential “capitalist” country. In broad strokes we can say Venezuela is socialist, as they implemented a policy of government ownership of businesses including seizing existing entities. The result was abject failure.
- dep_b 9y ago
  Socialism and dictatorships aren't mutually exclusive.
- jerf 9y ago
  If you look at the history of all the governments that call themselves Socialist, and you does it honestly, you are forced rather strongly into having to choose between A: yes, this is the dominant natural end result of a Socialist government or B: whatever you think "true" Socialism probably isn't possible and attempts to bring it about are vastly more likely to bring about Venezuela than real Socialism. (Note I frame this in probabilities; citing one or two governments that you believe are socialist and are doing it "right" will still leave it a very risky move when considered against the whole of everyone who has tried it. And I'm not particularly convinced that you'd consider them "real Socialism" if it weren't momentarily convenient for this argument, because all the European countries you might want to cite still have poverty and social and wealth inequality, etc.) Either way, the cost/benefit analysis of "trying to bring about Socialism" has some rather hard-to-ignore things in the "cost" column if you ask me, not to mention a certain lack in the realized benefits column, so don't be surprised when I react poorly to the idea that we should try it where I live.
- sctb 9y ago
  > Avoid unrelated controversies and generic tangents. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
dgritsko 9y ago
> Since Venezuela doesn't have the money to pay all its bondholders right now, investors would then be entitled to seize the country's assets -- primarily barrels of oil -- outside its borders. Is there any historical precedent for a scenario like this?
- smcl 9y ago
  Yep - an Argentine tall ship was seized this way in Ghana: https://www.npr.org/sections/money/2012/10/22/163384810/why-a-hedge-fund-seized-an-argentine-navy-ship-in-ghana https://www.npr.org/sections/money/2012/10/22/163384810/why-...
  - crdoconnor 9y ago
    ...and returned shortly thereafter.
    - lettergram 9y ago
      It appears they did pay $20 million though, which is pennies on the dollar, but still (probably) worth it.
      - sseveran 9y ago
        The funds involved made far more than $20M. https://www.nytimes.com/2016/04/25/business/dealbook/how-argentina-settled-a-billion-dollar-debt-dispute-with-hedge-funds.html https://www.nytimes.com/2016/04/25/business/dealbook/how-arg...
        smcl 9y ago
        Yeh the hedge funds buying old Argentine debt second-hand for pennies on the dollar and then holding out for 100% was pretty ... yuck.
        seanmcdirmid 9y ago
thriftwy 9y ago
I wonder how you get here while exporting $20B of oil annually. Where did all the money go?
- Carlton87 9y ago
  Socialism
  - sctb 9y ago
    Would you please say something substantive instead, like the guidelines ask? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- wavesounds 9y ago
  Planet Money has good episode on this exact topic called "How Venezuela Imploded": https://www.npr.org/sections/money/2016/10/21/498867764/episode-731-how-venezuela-imploded https://www.npr.org/sections/money/2016/10/21/498867764/epis... tldr: They didn't invest the oil revenues wisely and became reliant on high oil prices
- microcolonel 9y ago
  > Where did all the money go? TL;DR: Socialism. NTL;WR: Capital flight caused by the arbitrary seizure of private property. Longer still: They allowed the state to control the oil revenues entirely, and because they wanted to enrich themselves, they promised unsustainable entitlements to the public which eventually fell through when the oil price dropped slightly. Because they didn't give a damn, the private sector was not involved to invest any portion of the revenues, and the government couldn't possibly care less to invest them. Now lacking the revenue they took for granted, the entitlements they promised the public have bankrupted the state, and all good-natured attempts to liberalize the economy (which could save it literally at any point, but with increasing transitional pain) have seemingly been met with threats against life. Added: Hey cowards, if you dislike this post so much, why don't you make a reply and tell us all why it's wrong? There is probably a civil war on the horizon and you can't help but QB the ideology of the establishment which has turned Venezuela from a forward and developed country with a bright future into a prison hellscape of rape, murder, and mugging.
thisisit 9y ago
They have an alleged drug trafficker running negotiations, so this might not end well: https://www.bloomberg.com/news/articles/2017-11-06/drug-kingpin-leading-venezuelan-bond-talks-has-a-violent-streak https://www.bloomberg.com/news/articles/2017-11-06/drug-king...
tibarun 9y ago
Fake empire news. https://www.telesurtv.net/english/news/-Venezuela-Holds-First-Meeting-With-Bondholders-20171113-0025.html https://www.telesurtv.net/english/news/-Venezuela-Holds-Firs...

101 points by Shivetya 9y ago

I love how the article claims the govt was socialist when in reality Venezuela is a thinly veiled dictatorship that just calls itself socialist.

macspoofing 9y ago
No true Scotsman.
seibelj 9y ago
There is no quintessential “socialist” country just as there is no quintessential “capitalist” country. In broad strokes we can say Venezuela is socialist, as they implemented a policy of government ownership of businesses including seizing existing entities. The result was abject failure.
dep_b 9y ago
Socialism and dictatorships aren't mutually exclusive.
jerf 9y ago
If you look at the history of all the governments that call themselves Socialist, and you does it honestly, you are forced rather strongly into having to choose between A: yes, this is the dominant natural end result of a Socialist government or B: whatever you think "true" Socialism probably isn't possible and attempts to bring it about are vastly more likely to bring about Venezuela than real Socialism. (Note I frame this in probabilities; citing one or two governments that you believe are socialist and are doing it "right" will still leave it a very risky move when considered against the whole of everyone who has tried it. And I'm not particularly convinced that you'd consider them "real Socialism" if it weren't momentarily convenient for this argument, because all the European countries you might want to cite still have poverty and social and wealth inequality, etc.) Either way, the cost/benefit analysis of "trying to bring about Socialism" has some rather hard-to-ignore things in the "cost" column if you ask me, not to mention a certain lack in the realized benefits column, so don't be surprised when I react poorly to the idea that we should try it where I live.
sctb 9y ago
> Avoid unrelated controversies and generic tangents. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

dgritsko 9y ago

> Since Venezuela doesn't have the money to pay all its bondholders right now, investors would then be entitled to seize the country's assets -- primarily barrels of oil -- outside its borders. Is there any historical precedent for a scenario like this?

smcl 9y ago
Yep - an Argentine tall ship was seized this way in Ghana: https://www.npr.org/sections/money/2012/10/22/163384810/why-a-hedge-fund-seized-an-argentine-navy-ship-in-ghana https://www.npr.org/sections/money/2012/10/22/163384810/why-...
- crdoconnor 9y ago
  ...and returned shortly thereafter.
  - lettergram 9y ago
    It appears they did pay $20 million though, which is pennies on the dollar, but still (probably) worth it.
    - sseveran 9y ago
      The funds involved made far more than $20M. https://www.nytimes.com/2016/04/25/business/dealbook/how-argentina-settled-a-billion-dollar-debt-dispute-with-hedge-funds.html https://www.nytimes.com/2016/04/25/business/dealbook/how-arg...
      - smcl 9y ago
        Yeh the hedge funds buying old Argentine debt second-hand for pennies on the dollar and then holding out for 100% was pretty ... yuck.
        seanmcdirmid 9y ago

thriftwy 9y ago

I wonder how you get here while exporting $20B of oil annually. Where did all the money go?

Carlton87 9y ago
Socialism
- sctb 9y ago
  Would you please say something substantive instead, like the guidelines ask? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
wavesounds 9y ago
Planet Money has good episode on this exact topic called "How Venezuela Imploded": https://www.npr.org/sections/money/2016/10/21/498867764/episode-731-how-venezuela-imploded https://www.npr.org/sections/money/2016/10/21/498867764/epis... tldr: They didn't invest the oil revenues wisely and became reliant on high oil prices
microcolonel 9y ago
> Where did all the money go? TL;DR: Socialism. NTL;WR: Capital flight caused by the arbitrary seizure of private property. Longer still: They allowed the state to control the oil revenues entirely, and because they wanted to enrich themselves, they promised unsustainable entitlements to the public which eventually fell through when the oil price dropped slightly. Because they didn't give a damn, the private sector was not involved to invest any portion of the revenues, and the government couldn't possibly care less to invest them. Now lacking the revenue they took for granted, the entitlements they promised the public have bankrupted the state, and all good-natured attempts to liberalize the economy (which could save it literally at any point, but with increasing transitional pain) have seemingly been met with threats against life. Added: Hey cowards, if you dislike this post so much, why don't you make a reply and tell us all why it's wrong? There is probably a civil war on the horizon and you can't help but QB the ideology of the establishment which has turned Venezuela from a forward and developed country with a bright future into a prison hellscape of rape, murder, and mugging.

thisisit 9y ago

They have an alleged drug trafficker running negotiations, so this might not end well: https://www.bloomberg.com/news/articles/2017-11-06/drug-kingpin-leading-venezuelan-bond-talks-has-a-violent-streak https://www.bloomberg.com/news/articles/2017-11-06/drug-king...

tibarun 9y ago

Fake empire news. https://www.telesurtv.net/english/news/-Venezuela-Holds-First-Meeting-With-Bondholders-20171113-0025.html https://www.telesurtv.net/english/news/-Venezuela-Holds-Firs...