Death, Depravity and Trading: Should Anyone be Making a Killing on Venezuela's 'Hunger Bonds'?

So a handful of big investment houses are making a lot of money on Venezuela's 'hunger bonds', which pretty much fund the Maduro regime and do nothing to help the people, who are starving. I mean, I like making money as much as the next guy, but there's got to be a red line. Why is the petro banned but not hunger bonds?

https://safehaven.com/article/45266/Investors-Are-Getting-Rich-Off-Venezuelan-Hunger-Bonds

 

 

 

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ah, yes. bit of prohibition hypocrisy there. I mean, allowing these bond sales is lining the regime's pockets more than the petro right now. I see the line-up of usual suspects: Fidelity Investments, T Rowe Price, BlackRock, Goldman, Nomura, Invesco ... 

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at 13% interest ... who wouldn't? (even if they shouldn't)

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I don't know about you, but I certainly don't vet my trades based on which of them are morally responsible.  El Petro was banned not because it was the right thing to do, but because it violates sanctions.

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Should they? Maybe not. But I sure do get tired of people feigning outrage at stuff like this, when really they couldn't care less. I have to wonder: do they really care about the hungry people in Venezuela? Or do they just feel better pretending that they care, since they're sitting in the cheap seats? 

And Goldi Socks got paid this time, but hunger bond holders do take a pretty sizeable risk.

Either way, seems like it should fall under the sanctions too, though?

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PDVSA made a $90-million interest payment on a bond largely purchased by Goldman Sachs ... so banning the Petro is just ... fluff and for public consumption. And people DO care. As a trader, if given the opportunity, I would not choose to profit off of Venezuelan starvation to line Maduro's pockets. It wouldn't be money I was proud to own. 

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I will agree with you, in theory. Traders generally think that it doesn't matter what they do. Business is business. It's an entirely different way of thinking, as if they sit outside of everything else. Nonetheless, I don't think any of us are really expecting the big investment houses to suddenly grow scruples so it's really a mute point. 

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3 minutes ago, TraderTate said:

PDVSA made a $90-million interest payment on a bond largely purchased by Goldman Sachs ... so banning the Petro is just ... fluff and for public consumption. And people DO care. As a trader, if given the opportunity, I would not choose to profit off of Venezuelan starvation to line Maduro's pockets. It wouldn't be money I was proud to own. 

so you vet every trade you make before making it to make sure that the company whose stock you're buying isn't involved in anything shady? 

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well, I do. There are a number of companies I won't invest in even when the set-up looks good. 

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yeah, me, too. It's nothing I get on a soap box about. I just don't trade certain stocks because they leave a bad taste in my mouth. I certainly wouldn't by hunger bonds, nor would I want to buy blood diamonds. I mean, obviously, there's a ton of stuff people support that they wouldn't if they thought about but ... some things are pretty clear. 

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