Oil Sky-Rockets, Venezuelan Bonds Plunge  It takes a minute or
two to fully absorb this Bloomberg chart:  It shows the
correlation between oil prices and Venezuelan sovereign bond
prices. Venezuela’s ability to pay its debts is tightly bound up
with PDVSA’s earning power, so oil prices and Venezuelan bond
prices usually move in lockstep. In normal times, the more money
oil brings in, the less international investors perceive
Venezuela as a default risk, the more Venezuelan bonds they’re
willing to buy.  But these are not normal times: the republic
and PDVSA have been issuing new debt at such a dizzying rate –
$10.8 bn just since last August! – that not even the Oil Boom of
2011 can sustain investors’ faith in Venezuelan paper. And so,
as oil jumps to over $100 a barrel again, that longstanding
correlation between the price of oil and the price of Venezuelan
bonds has broken down.  To my mind, this all comes back to
Giordani’s batshit-crazy Forex policy: thanks to his convoluted
Sitme mechanism, Venezuelan dol