Blain’s Morning Porridge Jan 6th 2026: Venezuela Bonds – are you a buyer or seller? “A land of passion and contradictions, where the past and the future collide.”Venezuela bond prices have spiked higher on expectations of new investment, debt restructuring, and the monetisation of its oil resources. But how likely is it the nation can be reformed, attract new money, and satisfy the population while the old regime remains in place, and Washington demands to be paid?The critical difference between a stock trader and a bond trader is the latter is a pragmatist dealing on facts and probabilities, while the former will happily believe six improbable things before breakfast. Bond prices reflect reality. Stock prices are not set by uncommonly good sense but by the gullibility of equity buyers to believe fairy stories… (Hence Elon Musk’s success – he’s not much of an engineer or inventor, but a marketing whizz who has convinced investors he’s got the ability to deliver rounder wheels.) Sometimes the cold logic of the bond market and the confabulations of stocks collide – as they apparently did yesterday in the market for Venezuela Bonds. The price of the nation’s debt saw spectacular gains on the wake of President Trump’s new approach to Strategic Country Acquisition – Gorilla Style: bump off the top guy, threaten the rest and watch them to fall into line. (That’s the hope – we shall find out how the actuality plays out in coming weeks and if the “regime” behaves as Trump demands.)Distressed EM debt is always interesting. It all about gaming possibilities, prospectuses, and the prospects for change. It can be a murky business. There is “said-to-be” an unground railroad of Russian debt being sold to dubious investment desks in Central Asia, from where the bonds are on-sold at deep discounts to Russian oligarchs looking to deal them to Putin in return for influence and patronage. The benchmark Venezuela bonds (debt issued by the national oil company PDVSA, Petroleos de Venezuela) due 2037, spiked up 11 points to 31 cents on the dollar yesterday. In the past year the VENZ 9.25% bond due 2027 have traded up from 15 cents to 41 cents! You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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