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Chavez Uses Hedge Fund for Politics
Venezuelan President Hugo Chavez is using record revenue from oil profits to purchase bonds from Argentina’s government. Chavez, seeking to embarrass the United States, stepped in for the purchase after the two biggest U.S. banks, Citigroup Inc. and JPMorgan Chase & Co., opted not to buy a portion of Argentina’s debt. The Venezuelan dictator has accumulated as much as $986 million of bonds this year from Argentina, more than any of the 10 largest U.S.-based mutual funds that focus on emerging markets, according to Bloomberg News. "A Hugo Chavez hedge fund; it's terrifically ironic," James Barrineau, senior vice president responsible for Latin American economic analysis at Alliance Capital Management LP in New York told Bloomberg. "The dangers are when the market heads south and they want to dump the bonds."
Story Continues Below Analysts say Chavez is trying to spread his influence throughout Latin America, gaining friends through investment, while also helping that region become less dependent on International Monetary Fund and World Bank policies, and capitalist nations, such as the United States. Earlier this month, Chavez made good on an offer to provide subsidized heating oil to low income families in Boston and New York. Chavez is a Socialist with close ties to other anti-U.S. leaders in Latin America, Cuban dictator Fidel Castro and Bolivia's president-elect Evo Morales.
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