Let
us not forget that Standard & Poor, Moody and Fitch rating
services are financed by the banks and therefore have no real
independence.
Part
1
The
media fabricated "default" comes before the real one. The
stage is slowly being set with economic sanctions; psychological
pressure on Venezuelan bondholders and a media campaign that blows
out of all proportion routine financial transactions.
Last
Sunday, Venezuelan President Nicolas Maduro said that "default"
will never come to Venezuela because the South American country "will
always have a clear strategy" aimed at the renegotiation and
restructuring of debt – as reported by the Spanish daily El Mundo.
However,
just a day later, dawn broke in Venezuela with the news that the U.S.
rating agency Standard & Poor's, S&P, downgraded the
country’s CC rating (very vulnerable) to "selective default"
due to non-payment of US$200 million of the coupon on its bonds 2019
and 2024 within the 30-day grace period, according to a report in the
Venezuelan daily El Universal.
So
why did S&P jump the gun with a “selective default”
classification when for a country to be declared in default, that
country must also expressly declare that it accepts that it is
insolvent and would be able to repay its commitments. This is the
usual mechanism and such an acceptance has not been declared by or in
the case of Venezuela. All the economic spokespeople of Venezuela
indicate that the country is paying and will continue to pay its
commitments.
But
such headlines make good reading for a “media default” and good
reading in newspapers such as the Financial Times that, as a world
leader in its field, should know better than talk about a “default”
when officially this cannot happen without Venezuela declaring itself
insolvent.
Let
us not forget that Standard & Poor is one of the international
rating agencies that had Lehmann Bros at the highest AAA rating in
September 2008 – one day before Lehmann collapsed and almost took
the whole world financial system down with it. So much for the
credibility and expertise of S&P if you want to look at it
objectively and there is little doubt that this arch-capitalist
agency is at the beck and call of the U.S. Treasury Department that
is hell-bent on trying to force Venezuela into a debt default to
contribute to the U.S. Administration’s plans of ousting President
Maduro and refounding a newly compliant Venezuela as the “U.S.
gas station on the northern coast of South America”.
On
Monday, a group of bondholders of Venezuelan debt from the U.S.,
Panama, United Kingdom, Portugal, Colombia, Chile, Argentina, Japan
and Germany met in Caracas with the Venezuelan Government as part of
the first approach for the renegotiation and restructuring proposed
by Maduro.
The
Venezuelan authorities described this meeting as "highly
positive" and "very auspicious," in a statement in
which it was recalled that in the last 36 months the South American
country had canceled US$73.359 billion in capital and interest
payments.
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