111–119 of 119 posts
goldman's asset management arm bought the bonds for client portfolios- not goldman itself. I don't see any controversy here.
I agree with you, but also your comment made me think about the absurdity of how most people perceive banking. I.e. "if a bank does it to be profitable, it's bad; but if somebody else does it, it's OK".
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The latter is what happens on an unstable government that thinks its going down. Poeple scramble to get the last piece and get out. IT might not happen with this, but it might and being south american, its likely.
This might happen, if the government can issue the debt immediately. That's highly unlikely in an unstable situation like in Venezuela. I couldn't find anything in the article, but I bet the debt was issued way before the unrest began. If there was any embezlement, it had to be way earlier.
It looks like Goldman Sachs is betting that Venezuela will sort it self out by 2022, and getting a good discount. I'm not sure how that is “making a quick buck off the suffering of the Venezuelan people”, or how the people would benefit if nobody buys the bonds.
Or GS thinks they will have more favorable government in power in venezuela who will pay their bonds in full.
Looks like GS, CIA, Trump, etc are lining up to overthrow the venezuelan regime in the next few years.
> I'm not sure how that is “making a quick buck off the suffering of the Venezuelan people”
Forcing a nation to pay 100% on bonds that are worth shit is how you make a quick buck off the suffering of the people.
Goldman bought a lot of Greece debt that it knew wasn't great and made tons: https://www.thenation.com/article/goldmans-greek-gambit/ Goldman Sachs was also very involved in selling subprime mortages to unwitting investors. Goldman Sach has had to deal with lawsuits that it wasn't acting in its clients' best interests: http://articles.latimes.com/2010/may/16/business/la-fi-hiltz... If Goldman Sachs is involved, you a…
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I'm sorry, what? Most legal system recognize default as a breach of contract. Also, contracts are between at least two parties. Which of these parties don't you consider being a part of society?
Most legal systems have procedures in place for when debt cannot be repaid. That is why I take issue with the statement that it 'must' be repaid. "Which of these parties don't you consider being a part of society?" - This is a strawman. Both are part of society, but the contract between them may do more harm than good in total. And blindly holding contracts sacred quickly leads to bad outcomes (non-competes, EULAs, s…
Man, the straw man fallacy on HN is like the proverbial hammer... You are talking about externalities of private contracts. Thing is, this also is subject to specific legal regulations in most Western countries. It is not subject to whichever moral judgement you are trying to fit in here.
Construction, industrial emissions, things like that are when the state can limit the civil rights of contract parties. Buying and selling bonds is generally considered not to have externalities that endanger the common good.
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Venezuela cannot print USD and needs USD to pay coupons/principal.
I may be missing something. They make USD by selling bonds, as long as they make more USD then the scheme has running cost they can increase the amount of USD they have right now by selling more bonds below value, leaving any future government in dept.
When we say "Venezuela issues a 2.8 billion USD bond" that means that the central bank sells new bonds denominated in USD on the international market (most likely an auction among bank players in London or NY).
What had happened here is that they did that and then unbeknownst to them one banker sold their bonds to another banker. The act of reselling that debt on the secondary market does not magically increase that debt. It just changes whom you have to repay it to.
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What stops Maduro from issuing a bond for $1000 and selling it for $100? After all he knows he'll be dead or in Switzerland when the bond matures. He just cares about the $100 now.
What's the difference between issuing a bond by Maduro and selling it?