Panama debt just turned toxic

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Did we tell you already that Martinelli is running out of money and can’t issue more debt to finance his bizarre spending habits on Berlusconi radar corruption and the destruction of Casco Viejo?

Well, it just got worse!

In case Martinelli had any ideas, still, about selling bonds, he might want to read the latest analysis of Nomura, a Japanese multinational conglomerate of financial services, financial management consulting companies and related organizations, headquartered in Tokyo. It got famous for taking over a chunk of what was left of Lehman Brothers in 2008.

So, about Panama, the Nomura people have this to say:

We recommend zero exposure to Panamanian sovereign bonds. While this positioning might be relatively premature, we prefer to recommend it now inexpectation of a sharp rise in fiscal spending for electoral reasons next year. For those that are currently involved in this credit, we think it may be opportune to begin executing an exit strategy.

We recommend replacing Panama with exposure to other high-grade credits in Latin America, such as Peru, Colombia and Mexico. Because of Panama’s expensive valuations, we think investors are likely to benefit more from owning other LatAm high graders with lower downside risks.

Start an exit strategy! Eat that, Martinelli and Panama hypers! This is just a couple of steps removed from losing the coveted “investment grade”.

Of course, La Prensa reported yesterday that foreign investors are already executing their own exit strategy; foreign direct investment fell over 15% during the first trimester of this year, and it will get worse. You might wanna ditch that Petaquilla stock as well, now that it still trades at over 30 cents.

And: We just hear that UBS sends out email alerts, titled “Panama Losing Fiscal Credibility”. This entire conflict, from the Sala V to the selling of shares, is about money and will be decided by big money.

Isn’t it funny, to see the so-called government of entrepreneurs being dissed by other entrepreneurs? If there is any experiment that should never be allowed to be repeated, it should be to have Panama run by businessmen. What an unmitigated disaster.

Now, these financial companies and investors are of course only repeating what most observers and activists with half a brain did already warn about at least a year ago, but that’s because they’re business people and financial analysts, and  as such not really that smart.

Okke Ornstein is an award winning journalist, TV/Radio producer and photographer from the Netherlands and currently based in Panama. Specialized in high-impact investigative journalism, his work has led to arrests, questions in parliament and the downfall of many frauds and swindles.

16 Comments to Panama debt just turned toxic

  1. Calling Martinelli a businessman is an insult to businessman. A true businessman does not spend more than what he has. I’d call him a playboy.

    As for businessmen running government, I cannot recall any country where that happened in recent history, so I guess the theory has not yet been put to the test.

  2. Perhaps Chile currently but then agin its an apple and an orange as far as the last two decades

  3. the Editor

    They presented this crowd as the “gobierno de empresarios”, and that would supposedly be a sort of a miracle cure against poverty, corruption, lack of development and so on.

    Entrepreneurs spend more than they have all the time. That’s why we have a debt crisis and credit crunches.

    Every time entrepreneurial free market types run the show, things go horribly wrong. The Chicago boys experiment in Pinochet’s Chile stands out as another shining example of that. Martinelli is just a bad copy, a nouveau riche figure with a similar tasteless entourage with the intellectual capacity of a wombat.

  4. what makes you think youre smarter than financial analysts ? I dont think its that smart to all of a sudden take Nomura and UBS so seriously being 2 banks that almost went under with the subprime crisis.

    • the Editor

      DIego, I’m smarter because what happens now is what I’ve been writing here for a long time now. You actually don’t have to be that smart to see that Martinelli is overspending on unnecessary projects, that too much money disappears into the black hole of corruption and so on. That financial analysts haven’t seen that and gave Panama investment grade tells you how dumb these people really are.

  5. Amarillys Taylor

    Of course they don’t have enough money because they already put it in their pockets! And we panamanians are protesting and marching and finally got this clown to back out. And Chello will be the next asamblea president !! Good for him, bad for us!

  6. Exactly they only report what people feed them none of them probably are on the ground here beyond the Intercontinental Hotel.

  7. I have been stating that Panama was monetarily broke for over two years now!

    I have taken insults, threats, individuals who stated they where my arch enemy and would destroy me!

    It is really heartwarming now to see so many come out of the wood work and lose their fear of this Criminal Government!

    No one wants to hear the truth while they feed at the trough of $Billions$ from the Panamanian treasury!

    The Mega projects, the Sovereign fund, and the sale of Public assets have been a front for the complete udder financial ruin of Panama by this Criminal Martinelli Government!

    There are over one hundred huge and mega projects which have received funding in Panama City and will never be completed to the complete lack of funds!

    The Interior is faring far from horrid to beyond horrific, somewhere around 500 projects have had ground broken or have been started with the majority of the principle staring funds taking flight into Martinelli and his friends and associates pockets with monies embezzled, stolen, and robbed from the Public coffers of Panama!

    The IMF and the World Bank warned Panamas back in January asked this Criminal Government to slow down and back off from future plans and thoughts of new mega loans!

    Yet, this Criminal Martinelli Government thought it could pull the wool over the eyes of all the other Non CD Party members it was scamming!

    “When will Martinelli’s economy reign of terror end against the People of Panama in 2014?”

    “Martinelli, Panama’s Fictitious, Fraudulent, Felonious, False savior of Panama!”

  8. The myth of Martinelli as a brilliant businessman will soon be put thankfully to rest. Martinelli stole his 99 supermarkets from a Chinese businessman with Noriega’s help. This pattern of corrupt acquisitions continued until today. He is simply a greedy, corrupt individual who functions well in a greedy corrupt environment. In a true free market with rule of law he would have been relegated to being a street hustler or a stock market swindler…think Don Winner

  9. Okke,

    you have always been correct about the eventual implosion here. It is amazing how long they have kept it going . I think that international lenders (and the narco’s) have been feeding Panama chicha knowing it had an terrible alcohol problem. But to what end? Do these investors really believe the Moody’s hype after the mistakes these rating agencies made in 2008? Anyone who spent a week here could see that something was terribly wrong. A spending spree on private and public spending that would make the richest economies blush. The rest of the world stopped building subways years ago. But not little Panama…they will have a subway before they have sewers or drinking water!

    But back to the question…why did the rest of the world enable these idiots? IMF bailouts with sales of national assets(if there are any left)? Greek style austerity? A privitization of the canal? There must be a greater plan…Where do you think Panama will be in say 4 years?

  10. Indignant

    Dear Editor, on behalf of wombats, I’d like to take great exception to your comment comparing their intellect to that of Martinelli’s retinue.

  11. the Editor

    @Faustino, believe it or not, but S&P just gave Panama a better ranking. The game being played is that we’re being “Greeced”, i.e. hype, run up debt, squeeze the population into austerity and sell off state assets to pay up. I think that within 10 years from now the Canal will be privatized if this isn’t stopped.

  12. Just imagine the last names involved who end up running the privatized canal!