The Best Performing Stock Market of 2013? Hint - It's Located in a South American 'Socialist Paradise'

Yeah, Venezuela: guys in red berets, nationalized oil, Cuba's best friend, local business people called 'barbaric capitalist parasites' - by their duly elected president - and a stock market that skyrocketed 480 percent in 2013.

So what are we to make of this. Did  Wall Street analysts confuse it with someplace else? Is tropical poverty the secret engine of future growth? Or does this tell us something else about the global economy?

We'll go with suggestion number three. Global capital is going to flow to where it gets the best results. Despite Walter Wriston's stricture about money going where it's wanted and staying where it's well-treated, times have changed. Computer-driven trading algorithms dont really care about being well-treated because they are programmed to get in and out before anyone's synapses can register feelings, let alone discern their quality. Abusive working conditions, unsafe buildings, corruption, cronyism, socialism, communism: bring it on. Bring us your tired, your poor and your excess returns.

All the chest-thumping rhetoric about free markets and the wonders of capitalism aside, the global economy doesnt really pay too much attention to political ideology. It focuses on the net present value of future cash flows - from whatever source. As long as the destination is the investor's pocket. There was some push-back in 2013: Obamacare, the relative decline of the US Tea Party, the Ukrainians, the civil wars in Syria and Egypt, the show trials in China: people are demanding their due. Or some of it, anyway. But the markets have discounted all of this. It is just data. Which, when crunched, says where and when to buy. Everything else is just noise. JL

Rob Wile reports in Business Insider:

U.S. stocks have had an incredible year, with the S&P 500 surging a whopping 29%, something not seen since 1997.  But that's nothing compared with the year stocks have had in Venezuela.

Thanks in part to annual inflation of 56%, stocks climbed 480% in the socialist-run nation.
In November, President Nicholas Maduro called business owners in Venezuela "barbaric capitalist parasites" and accused them of price gouging. The business owners say failed socialist policies and restricted access to foreign reserves have made the Bolivar worthless. Dollars now sell for 64 Venezuelan bolivars on the black market.
For what that's worth, it's been great for stocks.
Here's the year-to-date chart of the Caracas Stock Exchange Stock Market Index via Bloomberg: