Post: #1

Basically, the government thought shit was too expensive and took over a store called Daka (Like a Best Buy) and slashed prices.

Quote:President Nicolás Maduro has decided it is time to stop waiting around for the Venezuelan economic crisis to end on its own and has resorted to extreme measures to fight what he has identified as an “economic war” waged by his opposition. In the latest show of force, the Venezuelan government ordered a well-known electronics chain to change prices to government-approved rates.

Daka, the largest Venezuelan electronics chain, was therefore occupied by the Army, which confiscated all items to then sell them at “fair prices.” “Nothing should remain on the shelves!” read the presidential order.

The chain, founded in 2004, belongs to a family of Arab origin that has been linked to Chavismo -- although its affiliations with the philosophy of late president Hugo Chávez, embraced openly by Maduro, did nothing to help them. What some called "government-sponsored looting” brought in thousands of Venezuelans hoping to snatch a piece of electronics at 60 percent to 90 percent discounted prices. Several stores were taken by force, as reported by Caracas newspaper El Universal, which prompted the intervention of the national police.

Daka was only the beginning, though: On Sunday, several other electronics stores in Caracas suffered the same fate, and these stores will not be the only ones. “This is just the tip of the iceberg of what we are planning to do with the bourgeoisie,” said Maduro in a televised speech. According to Spanish newspaper El País, the owners of Daka and JVG, another large chain, have been arrested.

The government accused the store owners of artificially increasing prices, therefore creating an “induced inflation,” identified as the main weapon in the "economic war." Venezuela’s Central Bank reported on Thursday that prices had risen 5 percent in October, for an annual inflation of 54 percent.

Maduro also targeted several Internet websites, like dolartoday.com and tucadivi.com, which monitor the exchange rates of the black currency market. Black market currency exchange has been illegal since 2005. The president said that the sites promoted a false image of the Venezuelan currency, the bolívar. “We are not going to allow being made fun of for the measures we take,” he said.

Post: #2

I think the last smart idea for doing business is doing business in venezuel. It's probably one of the most corrupt places on earth after Africa and their currency is unpredictable. I hear it's hard to even exchange money back to dollars because nobody wants to buy it.

Post: #3

Then, the army ran a train on some hookers for artificially increasing the price of sex.

Seems that the only smart business opportunity left in Venezuela is to pack up and leave.

Post: #4

How does one "short" venezuelan debt or ETFs?

I'm planning on shorting, then buying VZ ETFs when the economy crashes.

Post: #5

(11-19-2013 01:14 AM)Cattle Rustler Wrote:  How does one "short" venezuelan debt or ETFs?

I'm planning on shorting, then buying VZ ETFs when the economy crashes.

Interesting idea. How much money are you looking to invest? I imagine if it's a large enough sum there will be brokers willing to serve your needs. Check out this 2013 guide by the State Department and also this FAQ guide which talks a little on the capital and forex markets.

With regards to shorting stock ETFs, keep in mind they have hyperinflation with no end in site. As a result, in the YTD period the real (black market) exchange rate for BsF has fallen from 15/USD to around 50/USD, but the stock market index has rocketed 470% which is roughly a 140% real increase in value. Unless you expect economic reform, and a subsequent contraction in money supply it'd probably be better to take a long position, or alternatively research the market and trade in and out of positions.

Post: #6

I think it's petty hard, if not impossible, for a retail investor to be shorting sovereign debt. Perhaps someone knows better than me, though.

Maybe you can figure out which companies haw significant operations in Venezuela (oil companies for instance) and count on some downard pressure on their stocks as expropriation and orher sovereign risks increase. Or figure out which companies are going to be best placed to be in Venezuela once things hit rock bottom and then begin to turn around. Someone is going to make some profit there once the Venezuelans wake the fuck up and boot the Chavistas out of power.