I Read the News Today, Oh Boy

You know, there are some major news items out in the world that genuinely look to me as though they aren’t getting as much attention as they deserve. For example, there appears to have been a military coup in Zimbabwe:

After a night of confusion in which tanks rolled onto the streets of Zimbabwe’s capital Harare, the country’s military said early Wednesday that it had taken President Robert Mugabe into custody. While the armed forces appear now to be effectively in control of the city, a military spokesperson took to the airwaves to insist that what just happened was not a coup d’etat.

“We wish to make it abundantly clear that this is not a military takeover,” the spokesperson said on a nationwide broadcast after soldiers took over a state-run television channel. “We are only targeting criminals around [Mugabe] who are committing crimes that are causing social and economic suffering in the country in order to bring them to justice.”

The spokesperson also said the military guaranteed the security of Mugabe and his wife, and sought to reassure the public the situation would soon “return to normalcy.”

After Robert Mugabe you might think that it could hardly get any worse in Zimbabwe. I’m concerned that’s an overly optimistic assessment.

And Venezuela has defaulted on its debt:

Venezuela, a nation spiraling into a humanitarian crisis, has missed a debt payment. It could soon face grim consequences.

The South American country defaulted on its debt, according to a statement issued Monday night by S&P Global Ratings. The agency said the 30-day grace period had expired for a payment that was due in October.

A debt default risks setting off a dangerous series of events that could exacerbate Venezuela’s food and medical shortages.

How serious is the problem?

Venezuela and its state-run oil company, PDVSA, owe more than $60 billion just to bondholders. In total, the country owes far more: $196 billion, according to a paper published by the Harvard Law Roundtable and authored by lawyers Mark Walker and Richard Cooper.

Beyond bond payments, Venezuela owes money to China, Russia, oil service providers, U.S. airlines and many other entities. The nation’s central bank only has $9.6 billion in reserves because it has slowly drained its bank account over the years to make payments.

Venezuela’s problem doesn’t seem to be debt to GDP. It’s running out of cash.

Despite their many differences Venezuela and Zimbabwe have some significant similarities. Complete and utter mismanagement for one. For another both countries could be rich.