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A Venezuelan protester with "Freedom" painted on her face. Photo: Jesus Merida/SOPA Images/LightRocket via Getty Images

Investors hoping for the removal of Venezuelan President Nicolas Maduro may get more good news this week. The Trump administration signaled it may impose new sanctions against the country's oil sector — the lifeblood of Venezuela's economy and only major source of revenue.

Driving the news: The news followed the announcement Wednesday the U.S. would recognize Juan Guaido, head of Venezuela's National Assembly, as the country's president, not Maduro.

  • "If things change in Venezuela it would be a tremendous opportunity," Jan Dehn, head of research at Ashmore told me late last year. He predicted Venezuela's bonds could double in price if a new president takes office.

The big picture: The country’s sovereign bond maturing in 2027 rose on Wednesday to its highest level since June. That’s notable considering the 2027 bond, and all but one of Venezuela’s other bonds, have been in default since November 2017.

  • "There's a tremendous rally happening with the expectation that regime change leads to eventual restructuring of these bonds," said a fund manager from a major firm who asked not to be identified because he’s not permitted to discuss Venezuela’s debt. "The market is pricing in Maduro's exit as closer than we previously thought."

What's next? The oil sanctions may be the final nail in the coffin of a leader who has presided over an economy expected to hit 10,000,000% inflation this year with a 90% poverty rate.

My thought bubble: Maduro's ouster could be an inflection point in the country's history, but it will take a lot of work to turn what's effectively become a failing narco/petro-state into a functioning economy.

  • Venezuela owes international creditors an estimated $150 billion. A new regime will need to come to terms with creditors in order to be given access to international credit markets again and start rebuilding.
  • The country is producing oil at a 70-year low and analysts believe it could be three to five years before it is able to pump oil at its potential rate again.
  • There would almost certainly need to be a bailout from the IMF, which hasn't even been allowed to enter the country in years. Simply assessing Venezuela's needs could take years and the economy could continue to falter even after an aid package is administered.

Go deeper:

Go deeper

6 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

6 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.