How an email saying Hugo Chavez was dead grew Venezuelan bond prices

But the rally kept going. It was only later, that another friend sent me a denial by La Prensa. You can read it better in the original, but basically it says that this email purportedly showing a page from Panama’s La Prensa was circulating, saying “All of Venezuela in Mourning” because of Chavez’ death. But the whole thing turned out to be a virus, as if you clicked in the video of Chavez, it would download a virus which supposedly takes over your PC.

Well, some people did not even click, they believed the news and it spread all the way to debt markets, where it had a not-insignificant effect. Even Panama’s police felt it had to issue a warning.

Go figure!

Some people speculated the virus came out of the Presidential Palace. Others joked it had to be fake, how could it say “All of Venezuela in Mourning.” But in the end, the underlying truth is that debt markets would have an incredible rally if there was the possibility of political change in Venezuela. And I understand why. What I don’t understand is how not knowing how orderly or disorderly that transition may be does not make a difference. Just think, if the news had been right, Venezuela’s president would be Elias Jaua, a lightweight politically. Jaua just happens to be in Russia today, I wonder what his enemies would have done about that if the news had been true.

But the effect is there, an orderly political transition in 2012 will lead to the rally of a lifetime in Venezuelan paper. In fact, the possibility of such a transition should in itself provide a rally for the books.

--- Miguel Octavio, a Venezuelan, is not a fan of Venezuelan President Hugo Chavez. You can read his blog here.