Write it down: November 12th is the day the Great Venezuelan Default Debate of 2013-2014 effectively ended. In a research note circulated this morning to Bank of America clients, Francisco Rodríguez concludes that the Venezuelan state is now so disorganized and chaotic, and it has so little capacity to process and tackle complex problems, that it can’t be counted on to not to make the mistake of defaulting on its foreign bondholders.
The analytical focus here is still distinctive: for FRod, the problem still isn’t the government’s capacity to pay, it’s capacity to make even minimally competent policy. In this view the real bankruptcy isn’t financial, it’s organizational and intellectual.
But it’s six of one, half-a-dozen of the other: by the time even BofA has gone wobbly on the prospect that you’ll keep up your debt service…bueno, what’s left?