00:16:35 · James Bosworth, Tracy Alloway, Joe Weisenthal
[00:16:35] S2: It doesn't seem to have mattered in any of the polls I have seen. What you do see are people are angry at inflation. But people aren't making the big logical leap necessarily. But all elections are local and local incumbents get blamed for inflation. Therefore, higher gas prices whether it's caused by the Iran war or something else, get blamed on the incumbent. Now, one interesting twist for Brazil, Brazil is very much in commodity exporting economy. If there have been higher commodity prices over the last six months, they're exporting oil, they're exporting soy. They have benefited in some ways from the Iran war. I mean, certainly the Caribbean and Central America have been hit hard. Brazil, it's sort of net effect is sort of a wash actually. And that may have helped Lula, though it's going to be a long time until we really are able to look at the data to understand that. [00:17:20] S0: Should we talk Venezuela? [00:17:21] S2: Yeah, yeah. All right. [00:17:23] S0: So going over to Venezuela, we have Machado who's come back. And now people are talking a little bit, a tiny bit about the potential to have elections over there. And I saw on Polymarket there's like an 8% chance being priced. [00:17:37] S1: Of an election. [00:17:38] S0: Of an election by the end of the year, which is fairly soon now. It's November. That's true. You're a super forecaster. What number would you put on it?
00:17:38 · Tracy Alloway, James Bosworth
[00:17:38] S0: Of an election by the end of the year, which is fairly soon now. It's November. That's true. You're a super forecaster. What number would you put on it? [00:17:47] S2: This year, there's not going to be an election. There's really going to be, there's about a six to nine month run up for any election that has to happen because there are steps that must occur. And now I worry about those steps being drawn out over years and years and years where they just keep kicking the can down the road. But it should be about a six month timeframe, right? So the current Rubio plan as it exists, I say Rubio, not Trump very specifically, the current Rubio plan is that Delcy Rodriguez will declare a vacancy in the presidency. There will be a new electoral board. And six months later, there will be elections. Elections would ideally happen in July of next year, but maybe they get pushed to September or November of next year. I think that's the ideal. What would Delcy Rodriguez like? Probably closer to 2028 or 2029. And so this is the fight that's going on, I think, right now inside between Rubio and the Venezuelan authorities and inside the U.S. government between Rubio and other aspects of the Trump administration. Because I do think that there are people within the Trump administration who would like to see that election delayed. But I know that Rubio wants it on his record, that Venezuelan democracy happened on his watch. And so he will be pushing hard, I think, for elections in the coming year.
00:19:01 · Joe Weisenthal, James Bosworth
[00:19:01] S1: So one of the things that I read in your newsletter, which I hadn't clicked is that or hadn't really thought of before, is that there had been a lot of criticism in Brazil and around the world towards Lula. For having been too friendly with Maduro. But you sort of flip the sides again. It's like, all right, Delcy, part of Maduro's party, kind of chummy with Trump. Maybe that allows Lula to create some space, maybe becomes an advocate for some sort of version of Venezuelan democracy. Talk to us about that link. [00:19:35] S2: So there's an element in which Lula has called for new elections in Venezuela, and he was way too friendly with Hugo Chavez and Nicolas Maduro and various other left-wing dictators across the hemisphere. He has been for much of his career. He can't be happy with how things are going in Venezuela, right? South America is Brazil's sphere of influence. And right now, Trump is treating Venezuela like a proxy colony in some ways. And so I think that Lula would like to see Some sort of independence by Venezuela from the U.S. [00:20:07] S1: Authorities. [00:20:08] S2: And he thinks that a new election would potentially benefit him in that way, whether or not that election goes left or center. That said, the Venezuelan opposition hates Lula. They blamed Lula for a lot of what went wrong, the reason that they were not able to get a transition over the years. And so it's unlikely you'd see a Machado-Lula hug fest and that they get along. But they could become quiet allies of each other in this quest to push Venezuela towards elections.
00:20:08 · James Bosworth, Tracy Alloway
[00:20:08] S2: And he thinks that a new election would potentially benefit him in that way, whether or not that election goes left or center. That said, the Venezuelan opposition hates Lula. They blamed Lula for a lot of what went wrong, the reason that they were not able to get a transition over the years. And so it's unlikely you'd see a Machado-Lula hug fest and that they get along. But they could become quiet allies of each other in this quest to push Venezuela towards elections. [00:20:35] S0: Wait, can you just explain what influence exactly Brazil has over Venezuela or what leverage they actually exert here?
00:20:35 · Tracy Alloway, James Bosworth
[00:20:35] S0: Wait, can you just explain what influence exactly Brazil has over Venezuela or what leverage they actually exert here? [00:20:43] S2: That's a great question. So Lula... Brazil is Latin America's largest economy. It shares a border with Venezuela. Hypothetically, for years under Chavez and Maduro, there were tens of millions of development contracts that went from Brazil to Venezuela. And Brazil's construction companies constructed a bunch of Venezuelan infrastructure. Brazil should be influential in Venezuela. The fact that they haven't been is the surprise. They are the biggest military in South America. They're the biggest neighbor for Venezuela. They're the largest economy. They should be the most influential player in South America in Venezuela. But under Jair Bolsonaro, Brazil stepped back from a lot of the diplomatic efforts to push transition. And then under Lula, they did very little after Maduro stole the 2024 election. Both the right and the left in Brazil have taken that step back from what should be influence in South America. And I think Lula may want to reassert it because as presidents late in their second term often do, when they become lame ducks, they turn towards foreign policy because it's where they have the influence.
00:20:43 · James Bosworth, Joe Weisenthal
[00:20:43] S2: That's a great question. So Lula... Brazil is Latin America's largest economy. It shares a border with Venezuela. Hypothetically, for years under Chavez and Maduro, there were tens of millions of development contracts that went from Brazil to Venezuela. And Brazil's construction companies constructed a bunch of Venezuelan infrastructure. Brazil should be influential in Venezuela. The fact that they haven't been is the surprise. They are the biggest military in South America. They're the biggest neighbor for Venezuela. They're the largest economy. They should be the most influential player in South America in Venezuela. But under Jair Bolsonaro, Brazil stepped back from a lot of the diplomatic efforts to push transition. And then under Lula, they did very little after Maduro stole the 2024 election. Both the right and the left in Brazil have taken that step back from what should be influence in South America. And I think Lula may want to reassert it because as presidents late in their second term often do, when they become lame ducks, they turn towards foreign policy because it's where they have the influence. [00:22:06] S1: Setting aside democracy and all that, what's happening with oil and the corporate money? And is there evidence of the oil majors, et cetera, actually looking at Venezuela as a real opportunity for growth? Or is the story still that all the talented petroleum engineers left a long time ago, the infrastructure isn't in place, it's still too uncertain, it's mostly noise? Where do you stand on that?