Maduro’s New Script

December 9, 2014


PDVSA 2022 bond in the last three months. It was losing 14% of its value today, with a yield to maturity of 31.4%

As Venezuela and PDVSA bonds were tumbling today (see graph above) on their worst day in memory, people were taking Maduro’s words about the country’s inability to borrow in jest. But think again.

For the past four or five days, Maduro has been following what is clearly a new script. He began by attacking the US Embassy, saying he would reconsider the relations between the two countries, as the local Embassy was a constant source of conspiracies against Venezuela. He followed up by insulting the Head of the IMF, Christine Largarde, saying she had spaghetti in her head and finished with saying rating agencies were conspiring to push Venezuela into default by giving the country a credit rating below what it deserved.

Last night, Maduro went back to the narrative, blaming credit agencies and saying that Venezuela was suffering from an economic blockade for political reasons that made it such that the country no longer had access to international loans or financing.

You may laugh all you want at what he says, but I don’t. He is making a very specific narrative out of all this and I am not sure where it is heading. It may be that he just wants to blame  the US for the intensification of the crisis in the next few months or simply, that he is preparing the ground in case there is no money to pay international investors. There is a one billion Euro payment in March, which looks doable, but there are much larger maturities in October 2015. But investors have so far believed that Venezuela had a “willingness” to pay, and the action in the markets today indicated some people were losing faith.

It did not help that Bloomberg reported today on a meeting with investors at a New York law firm, which actually took place like ten days ago. This meeting actually ended in a somewhat positive note, as many suggested that Venezuela and PDVSA could not get away with a restructuring below current prices for most bonds, as the oil cash flow would not justify it.

Meanwhile, the adjustment continues, very few things are being imported and long lines have begun appearing at gas stations, a suggestion that PDVSA may be importing less and gasoline is being selectively distributed.


But I would take Maduro’s words seriously, he is following the script, wherever he wants to take it…



70 Responses to “Maduro’s New Script”

  1. Autobot Says:

    Chaburrismo script:
    “We’ll keep stealing all we can stuff in our pockets and everything that’s not bolted in the floor, even if we have to kill every venezuelan in this colony.”

  2. Ira Says:

    Everything is going to be just fine:

    Maduro announced there’s no reason to raise VZ gasoline prices (but only in 2014, mind you!), because the economy is solvent. And I swear:

    He said, this weekend, that there’s no reason to raise them in 2014, but maybe sometime in 2015. With two weeks to go in 2014 in the first place:

  3. Kepler Says:


    When do you think will the Venezuelan regime have to publish the GDP of 2014? They are late, very late, but there will have to come a time they’ll need t publish anything, even if it is a blatant lie for the foreign public (they couldn’t care a fig about Venezuelans)

  4. Noel Says:

    Blaming the US credit agencies may prepare the ground for a default, after all, it would only be fair not to pay those who caused the problem to begin with (at least in Maduro’s mind).

    When default is declared or emergency aid is sought, i would expect the IMF to insist on a cancellation of all oil exports at below market prices and conditions. When that happens, what is there for Cuba to stay in Venezuela?

  5. mick Says:

    Is there any way to estimate the difference in dollars that the government will get from oil sales of $50 vs $100(including all the windfall taxes that helped keep investors away)? With all the secret funds and the varied exchange rates putting the expenses in dollars is useless. Because we know they had to borrow 5-10 billion every year, approximating the lost income might shed light on the timing of the official bankruptcy of Venezuela. WTI $58 and dropping steadily.

  6. Alejandro Ponce Says:

    Could the Venezuelan govermnet default only on its short term maturing debt (2015-2017) without affecting LTD payment?

    • moctavio Says:

      No, it could default Venezuela or PDVSA. Or it could default in the two local law PDVSA bonds. The rest would trigger cross default clauses.

  7. mick Says:

    I may have to pay $2.60 for a gallon of gasoline, but my 16 year old earns enough at minimum wage to buy a 1.1 kg bag of Starbucks French Roast beans in 2 hours. I just read in El Universal that there will be a major government caused coffee shortage soon. Better stock up now.

  8. Ira Says:

    OPEC is finished, and the party is over for them:

    Daily world demand in 2015 is projected at just under 29 million barrels a day. As of today, OPEC only supplies 40% of that world demand.

    The U.S.–the U.S. ALONE–is now producing over 9 million barrels a day, and we’re not even TALKING about Canada yet. (Thank you, Canada. This Yankee loves you.) And the pundits are arguing how much U.S. production will increase in 2015, with LEGITIMATE arguments topping the 10 million mark. And at 60bbl, that’s a no-brainer and done deal. Should we get to 50, or pray tell 40, who knows.

    Do the math!

    OPEC would have to pump like mad, driving DOWN prices, to get above that 40% share. Except that would bankrupt most of them, and many members (VENEZUELA!) don’t have the capacity for this increased production anyway.

    I think the Saudis are the only OPECers to see the writing on the wall, and they’re just going to ride out the new realities for whatever they can get until it all turns to shit for OPEC:

    Supplying 40% of world demand doesn’t exactly put you in the driver’s seat to fix prices, when demand is going down, and production elsewhere is going up.

  9. Ronaldo Says:

    Imagine that, OPEC will not let Venezuela steer the ship. Where have Venezuela’s best friends gone?

  10. mick Says:

    They have been grasping at straws for anything to keep the people from realizing that they steered the ship right into an ice burg. They need something like a real attempt on Maduro to distract. And, I think he is probably afraid Cabello just might sanction killing him just to keep power for a little while longer.
    It was sympathy for Chavez that got Maduro sort-of elected.

    WTI is pushing $60 this morning. The Saudis and the oil majors are in it for the long haul. They were making billions back when oil was selling for $15. Unlike Venezuela, they have huge rainy day funds.

  11. […] Devil’s Excrement looks at Maduro’s New Script, You may laugh all you want at what he says, but I don’t. He is making a very specific narrative […]

  12. Sonny Says:

    Another example of business to the Venezuelan miltiary that will become immediately affected are helicopters and spare parts for helicopters and aircraft. This business was permissible before unless the part was uniquely military such as F-16 engines and ejection seats. They will have to resort to middlemen in third countries to buy the most critical parts. Their costs just went up big time.

  13. Sonny Says:

    US arms embargo to Venezuela before and after. Before, there was restricted items list that was very specific to the military. However, there where many loopholes and abuses. For example, there are many items that are dual-use civilian/military. These Beechcraft Super King Air aircraft are restricted because they will ferry military people and will be used for recon and electronic surveillance. They can also be used to ferry arms. A personal computer can now be restricted if it ends in the hands of the military. Some items harder to control but also much harder to acquire for FANB. Life just got much harder for FANB. The Venezuelan military just got shit listed across the board. Anything suspected of going towards them regardless of the use, will be flagged

  14. Sonny Says:

    There is a pending transaction of of Super King AIrs many going to the military. This is going to fought now. Beechcraft Counsel prepare yourself, the law is the law.

  15. Sonny Says:

    When the miltiary started cracking down, US cargo carriers where being used to ferry riot control gear and armament from Europe. There where Boeing 747F full of gear for GN and police landing in Miami on way to Ccs. THis no more.

  16. Sonny Says:

    If the United States’ policy toward Russia is any indication of what is to come, Venezuela soon could face additional sanctions targeting specific transactions, persons, entities, and industries.

    The screws are tightening on Venezuela, with increasingly significant repercussions for U.S. companies doing business in the country and/or with Venezuelan entities or individuals. Any companies or individuals shipping U.S. origin goods to Venezuela should consider revisiting their end-use and end-user statements, and reevaluating their overall diligence process.

  17. Sonny Says:

    “…The actions and policies of the Venezuelan military undermine democratic processes and institutions and thereby constitute an unusual and extraordinary threat to the national security and foreign policy of the United States…”

    “…In response to abuses committed by the Venezuelan military on the Venezuelan people, the U.S. Government is imposing ‘‘military end use’’ and ‘‘military end user’’ license requirements on Venezuela…”

    “…To implement the U.S. Government’s response to the abuses by the Venezuelan military, in this rule, BIS amends § 744.21 of the EAR to apply
    ‘‘military end use’’ and ‘‘military end user’’ license requirements to

  18. Sonny Says:

    There’s a revision to the US arms embargo against Venezuela. I will let you guys figure it out. Nice to see governmment at work.

    Click to access 2014-26465.pdf

  19. Sonny Says:

    Alex, POTUS already signaled he will sign. It’s now win-win.

  20. Alex Says:

    Rafael Ramirez said today that oil should be at $100/barrell and that he would back up an extraordinary OPEC meeting. …fool….

    On other news, the whole US congress [finally] approved sanctions against Venezuelan human rights abusers. Obama up-to-bat …. will he sign? That is the question.

    • Ira Says:

      No–the Senate did their bill. It then went to the House of Representatives, and now it goes back to the Senate with those revisions for final approval.

      And all reports say Obama will sign off on it.

      It’s about fucking time, but that list should include HUNDREDS of Chavistas, not just two dozen.

      But at least it’s a start.

  21. Ray Says:

    here’s special-access Eva interviewing Maduro on the tarmac in Quito.

    Maduro goes back to MalcomX, MLK, JKL and RFK in his ramble

  22. Miguel Octavio Says:

    No entiendo, it is a new script to focus on this.

    • Moraima Garcia Says:

      maybe the attacking US is not new but the acceptance that there is a problem with the economy” ” can’t borrow money” seems new to me. They stuck to the nothing is happening, we have a strong economy, it’s just a short term thing narrative before. Now it’s the first time they seem to be preparing their supporters for the hardship to come. I am so worried about what 2015 will look like.

  23. For the past four or five days, Maduro has been following what is clearly a new script. He began by attacking the US Embassy…

    Ya va ya va…read that again. How do those two sentences make sense together?!

  24. Ira Says:

    There’s a lot of insidious stuff going on that hasn’t been reported:

    After the demonstrations at the beginning of the year (or whenever; I don’t remember the timeframe), how the hell did all of this dissent just vanish?

    Especially when things are getting worse?

    It doesn’t make sense.

  25. Tomate Says:

    They are betting Venezuelan’s gullible enough to believe that this mess was caused by an economic blockade orchestrated by the evil Yankees. The question is if they don’t buy it what will happen? My guess is nothing as their grip over the country is too tight. But I would love to hear other opinions

  26. Ira Says:

    Break out the champagne!

    One of my sisters-in-law finally found white interior house paint, after many weeks of looking. (She had EVERYONE in the family looking!)

    But she’s been a Chavista since day one, so the hell with her:

    I hope that paint is the toxic kind from China.

    • Daveed Says:

      Shall we send a picture of the white paint aisle at the local Home Depot?

      • Ira Says:

        She would claim that all of our available products and “riches” were just a Capitalist plot to demoralize the Chavista revolution!

        My God how I despise this woman.

    • Yuzhou Lin Says:

      Why people always think Chinese products are toxic? we make many good products and people all over the world like them!

      • Ira Says:

        There have been too many examples of bad and poisonous Chinese products.

        There was new housing construction a few years back in my adjacent neighborhood, Parkland (Florida). Now, this is a very upscale city, VERY expensive homes, and these new homes were built with Chinese drywall, and there was something wrong with the gypsum or whatever that stuff is.

        And you couldn’t live in those houses, and it cost almost as much to fix the problem as building a new house!

        I’ll try to find a link.

      • TV Says:

        Because when they aren’t toxic, they’re either crap that will break quickly, or a knock-off.

        “Made in China” has more or less replaced “A piece of crap” in the languauge.

        No one is trying to insult you, least of all me, it’s just a fact.

        • Yuzhou Lin Says:

          I live in US for years, As i see ,many of products sold in US are made in China.all of the Iphone, Macbook, IPad are made in China, most of products sold in Costco are made in china, those high-end shoes and handbags are made in china. they are not craps as I know. I think it all depends on the price, the very cheap chinese goods may be crap as you said. but if people are willing to pay more, they can buy chinese goods with good quality.

          • Ira Says:

            What about the baby formula that had poison in it?

            The American products made in China don’t fall under the same category, because production is overseen by the parent companies. But on the whole, most of the cheap Chinese products are MADE cheaply, hence, you can’t expect quality.

            Hey, we’re getting what we’re paying for! I’m not claiming that’s China’s fault. But come on:

            When we pay $2.99 for a string of a Christmas lights, we KNOW the fucking thing is only going to work for one Christmas, and be dead the next! TVs, and not just from China, used to last 10, 15, 20 years, but nowadays?

            Since China is the biggest exporter of these Asian products, they get the most attention.

        • Daveed Says:

          “Made in Japan” had the same connotation a while ago!

  27. Glenn Says:

    Gas lines are a good thing. Reduced the supply side of the equation. At least you’ll have half of the free market concept in place.

  28. jau Says:

    se veia venir desde leeeejooooooos, pero hay muchs ojos que no quieren ver y oidos que no quieran escuchar!

    se hunde el barco mi querido capitan!

  29. Maduro’s script is written in Havana. The cuban dictatorship has been in power 56 years. Maduro’s cuban scriptwriters were raised in a fake cultural environment, one in which everything wrong was attributed to yankee imperialism. They don’t even understand their minds are warped. They don’t realize the brainwashing they’ve undergone. Therefore, these cubans hammer away at Yankee imperialism. What else can they do? Have Maduro retract and say he was wrong? Say that Chavez made a mistake? That Chavismo must change? These guys can’t write a different script!! They’ve been trained to THINK that admiting mistakes would give the empire an edge. And the revolution will never give such an edge. These guys have a mission, achieve complete and absolute control over society. They want to expand. They already got Venezuela. So in this struggle their path is clear. They like brute force, they love violence. If I were a venezuelan in venezuela, I would be getting ready to live in Stalingrad. Because that’s the way they will behave if it comes down to it.

    • Virginia Laffitte Says:

      Well Said! Too bad nincompoops don’t listen! Talk about Rose Colored Glasses!! When, if ever will they see it is the END!! (And, i have close relatives living in Caracas..Not the rich & famous kind either! ,,The F-ed
      ones! Revolution..Get rid of the whole damn pseudo government there before there is literally NOTHING left!

    • Kenneth Price Says:

      The Kleptopcrats running Venezuela currently are going to stick around to the bitter end, while moving as much currency (and gold) overseas as they can, leaving “others” to pick up the pieces. Some day, you’ll wake up, and wonder where the money went.

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