CNBC reports Venezuela Utility Defaults as Judgment Day Looms for State Oil Giant.

Venezuela's Electricidad de Caracas — a state-owned electric company — has defaulted on a $650 million bond payment, Wilmington Trust said Friday.

The default comes as the International Swaps and Derivatives Association (ISDA) prepares to decide next Monday whether state-run oil giant Petroleos de Venezuela (PDVSA) experienced a credit event earlier this month.

PDVSA missed a $1.12 billion bond payment on Nov. 2. If ISDA decides that PDVSA did experience a credit event, that could lead bondholders to declare a default, which could trigger an avalanche.

"We expect if holders do declare a default then that could be used to trigger cross default across the whole US$28bn of PDVSA bonds," Stuart Culverhouse, chief economist at Exotix Capital, said in a note. He noted, however, that bondholders "may simply give the government more time to make the payment, as the intention seems to be there, but coordinating a large group of holders with different incentives could prove challenging."

Food Shortages

RECOMMENDED ARTICLES

CNN reports Venezuela’s Dreams are Dying.

President Nicolas Maduro erased any remnants of democracy in late July, stripping political opponents of power and establishing a new legislature filled with his cronies.

But Maduro’s cemented regime still faces the same problems it started years ago: An exodus of its educated class combined with mass shortages of food, medicine, money and -- most importantly -- time.

Shortages of basic medicine and proper medical equipment are common. More than 750 women died during or shortly after childbirth in 2016, a 66% increase from 2015, according to the Venezuelan health ministry. Nearly 11,500 infants died, a 30% jump. Malaria cases soared to 240,000, a staggering 76% increase. That last one is especially telling: Venezuela had already eradicated malaria more than 50 years ago. I met three paramedics in a week who all said they’re low or out of gauze, gloves and bandages.

Nearly three-quarters of Venezuelans polled said they had lost at least 19 pounds last year, one poll found.

A domino effect has created a worthless currency. On July 24, the day I arrived in Venezuela, a dollar equaled 8,820 bolivars. As I write this on September 6, a dollar fetches nearly 20,000 bolivars. In other words, the bolivar is worth less than a hundredth of a penny.

Venezuela Annual Inflation

Such are the benefits of socialism run wild. When does the military take over?

Mike "Mish" Shedlock

Facing Inflation of 5600% Venezuela Launches "Petro" Cryptocurrency

Venezuela's annual rate of inflation is 5600%. President Nicolas Maduro has his hopes pinned on the "Petro".

Venezuela to Launch "Petro" Cryptocurrency

With Venezuela in default as well as hyperinflation, president Maduro vows to fight a US "blockade" with the "Petro".

US Military Preparing Venezuela Takeover? NSA Notepad: "5000 Troops to Colombia"

John Bolton, National Security Advisor says 5,000 troops to Columbia. The White House explains "All options on the table

Venezuelan Military Backs Maduro

It may be tough to oust Maduro as long as he has the backing of the military.

Venezuela Knocks Three Zeros Off Its Currency to Halt Hyperinflation

Redenomination is Venezuela's sorry story of the day. It won't work.

When Does Gold Do Well?

In response to Hyperinflation Silliness (Times Two), reader William says “I think you are saying gold benefits no matter what. I’m confused.”

Venezuela Currency Loses 45% This Month as Hyperinflation Escalates

The Venezuelan bolivar lost 45% of its value against the US dollar so far this month, the biggest monthly decline ever.

Debate Over Brexit Fee: Would Nonpayment Constitute Default? Who Owes Whom?

Round and round we go. After more than two years the UK and EU are still debating Brexit breakup fees.

Foolproof Reason Electric Cars Will Soon Take Over: Government Mandate

Electric cars are coming. Electric may not make any practical sense, but so what? Global warming advocates will win.