'The most miserable country in the world' is slipping towards default

(REUTERS/Jorge Silva)
Men rest after salvaging metal on the 30th floor of the “Tower of David” skyscraper in Caracas.

Over the last few days the talk among those who watch ‘the most miserable country’ in the world has turned to default.

2016, it seems, is Venezuela’s year. 

“Unless the Chinese pull something out of the bag or PDVSA [Venezuela’s state oil company] exercises a voluntary bond swap it’s happening,” said Brian Dean, a partner at ACG Analytics.

“"There’s going to be a default in my view unless there’s some kind of political disruption … They can sell assets but I don’t know what they have left.”

The 'default’ calls have gotten especially loud over the last week.

In a note Tuesday, Bank of America Merrill Lynch economist Albert Ades said that if Brent oil prices level off at $25, Venezualan GDP would hit $80 billion, making its external debt of $123 billion unpayable. 

“In such a scenario, a forceful restructuring of Venezuelan debt would be very hard to avoid,” he said. 

Harvard economist Ricardo Hausman, who has been attacked by the government in the past, wrote in the FT that while 2015 was bad, oil’s low price will make 2016 much worse.

The "most likely scenario is an imminent economic collapse and a humanitarian crisis,“ he wrote.

He’s talking an Argentina 2001-sized meltdown.

So the question now is, when? 

Now or nowish

The most bearish of those out there in the market think it could happen as soon as the end of this month. That’s when Venezuela has to make a $1.5 billion debt payment.

According to Reuters, the Venezuelan Central Bank has already set to work (with the help of Deutsche Bank) to exchange some of its pile of gold bars for cash. The country has only about $15 billion in the bank, and 64% of that is in bars. 

Reminder: This is where we were last year.

So maybe it can scrape by this time. But with $9.5 billion in debt payments in the pipeline this year, the country is far from in the clear.

Dean at ACG Analytics said October is "the risk point.”

“If this thing lasts that long that’s where I see this shaping up in terms of default.”

Of course, people have been saying that Venezuela is on the brink since at least 2014. Yet, every year the country ekes by and bond investors get paid — a lot.

As The Wall Street Journal pointed out, last year, Venezuelan government bonds returned 17% for investors with the stomach to handle this ride.

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‘Tower of David’ Venezuela: the world’s tallest slum in incredible images

Once a five-star hotel and luxury apartment block, the 45-storey so-called “Tower of David” skyscraper that looms over the Venezuelan capital of Caracas is now home to 3,000 people, and thought to be the world’s tallest slum. Intended to be a jewel in the crown of a shining new financial district, the incomplete building was abandoned in around 1994 when its developer died.

By 2007, squatters had seized what had become a huge concrete skeleton. Now, residents regard the “Tower of David” as a safe haven from the violence and turf warfare that blights the capital’s street-level slums. While the first 28 floors were sufficiently completed to be habitable, squatters have had to brick up dangerous open spaces, and put in their own basic plumbing, electrical and water systems.

A co-operative and floor delegates help to manage the tower, and see that communal corridors are kept freshly-polished, and rules and rotas are adhered to.

Text by Kashmira Gander. Photos by Jorge Silva. Source


In his piece on Venezuela last week,Jon Lee Andersonwrites about the failed city of Caracas by way of the Tower of David, a looming and dilapidated structure that he describes as “a ziggurat of mirrored glass topped by a great vertical shaft, [rising] forty-five stories above the city.” The Tower, which can be seen from almost anywhere in Caracas, is a symbol of the downward spiral that Venezuela has experienced under Hugo Chávez’s rule.

The Spanish photographer Sebastian Liste met Anderson in Caracas to photograph the Tower. Liste described the experience of photographing the world’s tallest slum in what he says is a hostile, unpredictable city: “Nothing compares to the experience of walking up the dark stairs, one by one, haunted by thoughts of what might come next.” In what he calls “a dance between the eyes of the security guards in every corner and the movement of my arm which holds the camera,” Liste captured in stark detail the condition of the Tower’s residents and those of its surrounding neighborhoods, as well as the chavistas who poured into the streets of Caracas in support of their ailing leader.

Click-through for a slideshow:

Krampus Full Movie Streaming Online (2015)

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A horror comedy based on the ancient legend about a pagan creature who punishes children on Christmas.
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The world’s tallest slum.

Welcome to the world’s tallest slum: poverty-ridden Venezuela’s Tower of David. Squatters took over this very unfinished 45-story skyscraper in the early 1990s, and they’ve been there ever since. The tower was originally intended to be a symbol of Caracas’ bright financial future, complete with a rooftop helipad, but construction stopped because of a banking crisis and the sudden death of the tower’s namesake, David Brillembourg.

Today, as the government is grappling with a citywide housing shortage, the tower is a stark monument to what could have been in the country’s crime-plagued capital. The tower is dogged by accusations of being a hotbed of crime, drugs and corruption. But to residents, many of whom have spent their entire lives there, it’s just home.

Watch as Vocativ climbs the tower and gains the rare in-depth access to residents’ daily lives inside this unique and sinister establishment.

Few cameras have been allowed into the depths of the tower. It is an experience not to be missed.

We answered some frequently asked questions about our Tower of David video here:


In Focus: Squatters in Venezuela’s 45-Story ‘Tower of David’

In 1990, construction began on the Centro Financiero Confinanzas, a huge high-rise office complex in Caracas, Venezuela. Construction halted in 1994, after a banking crisis and the death of the building’s main investor, David Brillembourg. The 45-story tower stood vacant until 2007, when squatters began moving in, displaced by a massive housing shortage in Caracas. Authorities turned a blind eye, and the skyscraper, nicknamed the “Tower of David” (after David Brillembourg), is now home to more than 3,000 residents. The third-highest skyscraper in the country has been jury-rigged with electricity and water up to the 22nd floor. Reuters photographer Jorge Silva spent some time with tower residents earlier this year, returning with these photographs of the world’s tallest slum.

Read more.


5,000 people are facing eviction from Venezuela’s slum tower because of big business

The roughly 5,000 residents of a massive, unfinished skyscraper in Caracas, Venezuela, called the “world’s tallest slum” or the “Tower of David” are being rapidly evicted.

Advocates report that 100 families have already been forcibly evicted from the 45-story building as of July 23, and the remainder of its population of 1,200 families is soon to follow. This comes just two months after Venezuelan President Nicolas Maduro’s government promised to improve living conditions there.

Who wants them out | Follow micdotcom

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▶ Play Full Movie Online
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➣ Krampus Movie Storyline
“ A horror comedy based on the ancient legend about a pagan creature who punishes children on Christmas. ”

➣ Krampus Movie Detail
Release Date : 2015-11-26
Casts : Ivy George, Conchata Ferrell, Lolo Owen, Sophie Gannon, Krista Stadler, Leith Towers, Felicity Hamill, David Koechner, Chi Jiajia Lim, Trevor Bau, Allison Tolman, Luke Hawker, Maverick Flack, Adam Scott, Gideon Emery, Toni Collette, Queenie Samuel, Gareth Ruck, Stefania LaVie Owen, Emjay Anthony, Tess Jamieson-Karaha


“It is his love for humanity, for the human race, and his belief that this particular gifted soul named Carrie Mathison is the key to bringing peace to this world through her savant-like abilities of understanding human nature. His quest to preserve her gift so that the possibility of humankind being able to live together in peace might one day might be realized—that is what drives Saul.” –Mandy Patinkin, October 2013

A boy plays in his apartment on the 8th floor of Venezuela’s “Tower of David,” a partly constructed building in Caracas that served as informal housing for more than 3,000 men, women and children. Photo by Reportage photographer Alejandro Cegarra, from his series “The Other Side of the Tower,” which won third place in this year’s POYLatAm competition, in the daily life category. Alejandro and other winners were featured today in an article on National Geographic’s website.

See more of Alejandro’s work on Getty Images Reportage.