Still Two Sets To Go, Quico

If the government has the slightest clue what’s good for it, it will avoid default. That is why I think Venezuela will maneuver as much as it can before missing a payment. Maybe Chavez could have pulled off a default with minimal damage—he had the political chops to do it with grace, and maybe even come out on top. But Maduro, at 30% popularity? Please… I should say this: if oil falls another 15 dollars, then all bets are off. At 60 dollars per barrel, Venezuela might not be able to pay the debt even if it wants to. But if oil hovers around these levels, I think it’s safe to say that the government likely can and likely pay through 2015.We have to admit that some Chavista decision-makers are minimally rational and competent. They understand the basic cost-benefit outlook. They don’t want to default. They will avoid it while they can. More…