Should financing human rights’ violators help fund US pensions?

Sir, I refer to Colby Smith’s “Year began with ‘hardcore fear of missing out’ but now holders of Caracas debt have lost hope” December 21

I wonder how one can discuss the chances of creditors collecting on Venezuela’s debts, ignoring that their funds have all gone to finance a notoriously corrupt and inept government that has and is evidently committing crimes against human rights?

Odious debts is mostly the direct result of odious credits…

With respect to the sanctions of Venezuela by the US Treasury’s Office of Foreign Assets Control, an international bondholder is quoted. “These sanctions were just a disaster, and all this has done is damage holders of the bonds, many of which manage money for US pensioners.” Really in these days when financing of good social purposes is promoted, like to finance the sustainable development goals, SDG’s, should financing human rights’ violators really help fund pensions?

Frankly, “Fidelity, T. Rowe Price, BlackRock and Pimco” as well as Goldman Sachs should all be shamed; and tell us the name of that “one bondholder group holding $8bn of Venezuela’s debt”, because such exposures do not happen without very close and incestuous contacts with the government.

@PerKurowski

Dominic Rossi: Populist bank regulation “strongmen” have promoted the state apparatus ever since 1988’s Basel Accord

Dominic Rossi writes: “The twin freedoms of capital and labour movement are fading, secular relics from a passing liberal age… The tendency of “strongmen” to use the state apparatus to conjure up growth will set our new course. The tedium of recent years, slow but steady growth, looks set to be dislodged by the seductive alchemy of a fiscally induced boom-bust cycle beloved by populists” “Dr Doom awaits seat at table as president-elect enjoys a free lunch” November 24.

Sir, I am sorry, we are already there. The Basel Committee for Banking Supervision’s technocrat strongmen, in 1988 decided that for the purpose of capital requirements for banks, the risk weight of the sovereign was 0% and that of We the People 100%. Could there be a more devious way of favoring the growth of a “state apparatus”?

Where would the rates on US Treasuries, those that usually serves as a proxy of the risk free interest rate be without this enormous regulatory subsidy? 

And that subsidy does not come free. Since decreed, it has been paid by millions of SMEs and entrepreneurs not getting access to bank credit on real undistorted market terms.

Rossi writes: “The repatriation of offshore US corporate balance sheets will help finance the good times” Yes and no! It might help finance good times for government if it causes more fiscal income, but let us not forget that those balance sheets might already be fully invested in US assets.

Rossi ends in: “Populism and strong currencies are rarely seen together for long.” Indeed it will, sooner or later, guarantee the dangerously overpopulation of what is decreed, perceived or concocted as safe havens… and when that happens everything will come tumbling down 

@PerKurowski