Violence And Death On The Campaign Trail In Venezuela

November 27, 2015


No sooner had the campaign for Venezuela’s Parliamentary elections began that acts of violence began. There have been at least seven acts of violence during campaign events. Curiously, all of them have been against the opposition. These are not simple threats or side shows. As shown above, one of these incidents involved hooded activists, most wearing the emblematic Chavista red shirts, some of them holding machine guns.

Then, two nights ago, as an opposition rally was winding down, the Secretary General of Accion Democratica in Guarico State, Luis Manul Diaz, was shot death. This was no ordinary rally, the wife of jailed opposition leader Leopoldo Lopez, Lilian Tintori, was present and close to the shots, there were over three thousand people in attendance and the bullets sprayed walls and luckily did not hit anyone else.

When the violence follows Maduro’s statements that Chavismo will win the elections “Como sea” (In any way…”), it is difficult to dismiss the meaning of these acts of violence. But when there are deaths involved, it becomes particularly dangerous to dismiss the violence or not remind the Government that it is in charge of law and order.

Particularly at fault have been the representatives from UNASUR, the only ones allowed to “observe” the upcoming elections, who have reacted with platitudes directed to the electorate and both sides, rather than remind the Government of its responsibilities to maintain order and prevent violence.

The reaction by the Government has been as cynical as can be. From Godgiven’s “these were all a set up by the opposition”, to suggesting that the dead political leader was a murderer and this was nothing more than a fight between unions. As if human life was only the right of a selected few and the same presumption of innocence, the same one that the Government wants applied to the two “Venezuelans” detained in a drug sting in Haiti, does not appear to apply to these people.

The important question is whether the Government is looking to postpone the election or simply to create fear in the elctorate as well as in the politicians looking for votes. I have never been in the camp of those that believe that the Government will cancel the elections, so I have to go for the second argument. The strategy for Chavismo is a multiple one: From state of emergency in border states, to Min Unidad distracting vote, to violence and intimidation. Once the votes are in, and if they are unfavorable, then the “Como sea” strategy will need to be implemented. But not before.

An Explosive Bag Of Doritos In Venezuela

November 21, 2015


Venezuelans are tense. Fed up with Chavismo after 16 years. Fed up of abuses and authority. People are less passive. They are willing to stand up more for their rights even in the face of excessive authority. They look forward to the upcoming election to express their unhappiness. But even criminals are now confronted in barrios, since the police will not act.

Except that when people take justice in their own hands, many unexpected things can happen. This is the story of one of them. This was published in Reddit and I reproduce it here with permission from the author, who goes by the handle #xaitox. I have polished his English a little bit, to make it easy to read.

The story is tragic and at the same time, comic. But tragic in the end. This is what 16 years of this Government have led the people of Venezuela to.

In #xaitox’s own words:

“This happened about 3 hours ago…

I am a 29 years old male, living in probably the most corrupted country in the world (Venezuela). So just to give you some background, Venezuela is in a very difficult situation, political and economical, the majority of us want to get rid of this corrupted government and we have elections in a few days. So , the tension is palpable in the streets, police and military are corrupted as fuck (you can buy weapons such as grenades or sub machine guns from them, etc etc) basically hate is in the air.

So, I was in a traffic jam, one of the many we have daily when hunger hit me, I had a big bag of Doritos in my car, so I decided to eat some, I have a gastric bypass and can’t eat that much anyway, I was eating with my window open when a motorcycle with 2 military officers (low rank) stood beside me, waiting for their turn to pass. I see the guy in the back literally drooling looking at the Doritos so “Why not? I won’t eat this much”. I offer him the bag and he didn’t hesitate to take it with a very big smile and thanking me….

20 seconds later the shit storm!!! The driver next to me gets out of his car screaming “you fu*king thieves! Let the guy alone he has done nothing to you” (he thought I was being black mailed and I got asked for money inside the bag which is one of many ways for them to get paid black mailing you), I get out of the car to explain that it wasn’t money, but hell no, the military officer that was driving told me in not such a pleasant way to stay inside the car, that he could handle it….

He gets off the bike and goes to the guy that was screaming, baton in hand, when all of a sudden no less than 20 people are surrounding him screaming “Thief!!!! Oppressor!!! Go to hell” and start punching him. Military guy #2 gets down to help his friend and getting punched and screamed. He managed to get military guy #1 back the bike and proceeded to drive as fast as he could… Everyone got in their cars and guy #1 hands me back me the  bag of Doritos  “Here’s your money”…

Now I have my Doritos back in my car and there is sadness in my heart for how deep this society has fallen…

But I do have half a bag of Doritos to eat in the traffic jam tomorrow and I have that going for me, which is nice.

2 military officers got their asses kicked for a bag of Doritos I gave them.”

Tragic no? An act of kindness turned into a tragic event, tragic for the military policemen and a tragic statement about where Venezuela stands today as a society…

Update: A friend sends me this video which he taped at a Mall in Caracas. The people in the Mall kicked the National Guardsmen out of the Mall, as they were trying to extort merchants. They follow them calling them : “Hijos de Puta”

And another: Centro Comercial Gran Bazar in Maracaibo:

Hyperinflated Arepa Index (HAI) X: One year, 441% rise

November 17, 2015


Today is November 17th. It was exactly one year ago that I went to my favorite arepera and surprised at the sudden rise of my also favorite arepa con queso de mano, pictured above, that I decided to start keeping records of the price in each of my visits.

Today, there are no graphs. They are not needed. One year ago, the arepa was Bs. 120. Today it was Bs. 650. That is a rise of 441.7% in twelve months (sorry, I had subtracted twice the 100%, one in the spreadsheet and one in my mind*). Absolutely depressing…

There is little that I can say positive about this. At least, scarcity did not hit my arepa directly and I was able to eat it each time I went. Tonight’s was particularly delicious, the guy heard me when I asked for the “mas tostadita” (the darkest one) one and, as you can see, the filling was quite generous too. Depressingly enough, the tip I gave him was almost the price of the arepa one year ago. At least he deserved it for his service…

*How did I do that? Easy, I did not look at the spreadsheet cell which already subtracted the 100% and thought it was the ratio, rather than the actual calculation, thus I subtracted it twice, one in the cell, the other mentally.


800 Kilograms Of Arrogance Arrested In Haiti

November 11, 2015


When I first read the ABC piece on the detention of the nephews of Venezuela’s First Lady in Haiti for attempting to bring 800 kilograms of cocaine into the US, it sounded too far-fetched to be real. It sounded right out of a movie plot: They were caught in a sting operation, trying to move 800 Kilograms of cocaine into the US, the whole thing was filmed and they argued they had diplomatic immunity.

Far fetched, because what saved General Carvajal, was that he actually had a diplomatic position in Aruba. You see, it is one thing to have a Diplomatic Passport, another to have Diplomatic immunity. Any Joe Bimba can get a diplomatic passport which lasts four years in Venezuela, but, for example, if you are removed from your position, or if your trip was not an official trip, that immunity is simply worthless.

Long time ago, I flew to NY and a friend from primary school was on the plane. His father happened to be Venezuela’s Foreign Minister at the time. He had a Diplomatic passport and readily passed us to go to the Diplomatic line which, in contrast to ours, was empty. A few minutes later, he came back to the back to our line and stood in it like a regular citizen. When we were waiting for the luggage I asked him what happened and he told me that the immigration agent had asked him if he was on an official trip to the US. He said no. Then he was asked why he had a Diplomatic passport. He explained. To which the agent asked if his father was in the plane. As the answer was no, then he was sent to the regular line, as his passport may have been diplomatic, but not even the privilege of using the diplomatic line was available to him.

But such is the arrogance of Venezuela’s revolutionaries that they don’t even learn from their experiences. They have moved around funds, drugs and who knows what else, using private or public planes, through well known banks and countries, thinking they were flying under the radar, until they were not…

Meanwhile, the silence of the Venezuelan authorities is as loud as that of most local newspapers, which took a while to republish the news. Amazingly enough, it was revolutionary aporrea which followed Tal Cual with the news, while we are still waiting for El Universal to say anything. But news sources from the WSJ, The New York Times, Reuters and CNN, have all confirmed the story carried first by Spain’ ABC.

Meanwhile, we should know the details tomorrow as the First Lady’s nephews, one of which was raised by her directly, are arraigned in New York. Among the details to watch for, is whether there are videos or not, who owned the plane, a Citation 500 (Sabenpe?) and what the Government says or not. Interestingly, in the absence of news, the Government has so far preferred to stay quiet.

Much like the upcoming elections, I don’t view this as something that will change history, but more as part of the continued erosion of Maduro’s hold on power. Each bit of arrogance, indecision and defeat, adds to the internal divisions that will eventually lead to his demise.

This 800 Kilograms of arrogance by Cilia’s nephews, will simply add to the tally.


Here is the Indictment


A Remarkable Letter By The OAS Secretary General to The Head Of Venezuela’s Electoral Board

November 11, 2015
View this document on Scribd

Today, the Secretary General of the Organization of American States, Luis Almagro, wrote the extraordinary letter above to Tibisay Lucena the Head of Venezuela’s Electoral Board.

Extraordinary, because for the longest time, Venezuelans have become accustomed to the cowardly and cynical and mercantile attitude of most Latin American leaders when it comes to the respect of human rights of Venezuelans and the way elections have been run in the country. Even when they criticize, they tend to do it meekly and indirectly, seldom addressing the issues directly.

Secretary General Almagro does an extraordinary job of doing it, without mincing any words and addressing the problems head on.

I personally would like to thank Mr. Almagro for doing his job and without avoiding the thorny issues that his predecessors and those in leadership positions in so many other countries and institutions in Latin America have done so for the last sixteen years.

While there is promise of an English version, I wanted to summarize in English the gist of Mr. Almagro’s letter, without translating it verbatim:

Mrs. Tibisay Lucena:

I have received your kind letter in which you reject our offer that we (the OAS) execute an an electoral observation process during the Parliamentary elections on December 6th. 2015.

I regret that this rejection is based on political positioning and not on the arguments that make Justice and guarantees necessary for an electoral process.

I do not object that you show your political position, but I suppose that you have it clear that the job of the electoral justice transcends completely that type of positions and that it requires to place yourself at the forefront of the guarantees demanded by the parties, whether they are Government or opposition.

In your letter, you reiterate that Venezuela’s electoral system is efficient, but I understand that electoral guarantees do not only refer to efficiency.

I would have hoped that in your letter you would have place at the forefront the guarantees demanded and that from it it would have arisen that all of the needs of Venezuelan political parties are covered to insure that the elections that will be held will take place in a just and transparent manner.

If the Secretary General of the OAS were indifferent to the requests of the opposition of the countries about the electoral observation we would be gravely failing our job, which is to support the proper functioning of the electoral process for all parties involved.

We would be failing our job gravely if we did not take into account the conditions under which the Venezuelan electoral campaign is developing with respect to the future legislative elections. It is worrisome that from the analysis of those conditions we have to conclude that as of today, the difficulties only reach opposition parties.

In this scenario we all are involved either by action or by omission, but that fact makes the essence of you job.

You are in charge of electoral Justice, you are the guarantor. Everyone should trust you, all parties, all citizens and all of the international community because Venezuela has obligations with democracy which transcend its own jurisdiction. An election needs that all of the actors involved, citizens, political parties, press and civil society have been assured the full enjoyment of their civil and political rights.

You have seen us insist to perform the electoral observation because it is or job to safeguard for electoral Justice in the region, because electoral Justice is a prerequisite for the correct functioning of a democracy and for the guarantee of the most ample respect of the civil and political rights of each and everyone of the citizens.

The opposition in your country has repeatedly requested that we we perform it and, as I have said before, you also owe them the guarantees, because your Government has many ways to insure that the results be just. And it is not a request that is out of tune, it is your obligation, legal, as well as moral. It is the obligation of the CNE, but it is also the obligation of the OAS.

If I looked the other way in the face of the complaint of the opposition oin your country and the international community, I would be failing my most essential responsibilities. If you do not have the mechanisms that insure that the observation has the most ample guarantees for their work, you are failing your obligations that make the essence of the guarantees that you should bestow.

Your job is to watch over just and transparent elections that develop with the maximum guarantees. That implies watching over those guarantees months before the elections. It is required  and to do what is required is a matter of electoral Justice.

To look out for justice and transparency in the elections is our obligation and it is not interference. Interference would be if I disregarded the just and well founded complaints, if I looked the other way given this situation. In such a case I would be doing it by omission, because my inaction would allow for measures that affect the candidates and that in such a way, affect the possibilities that all citizens be allowed to elect freely and fully.

This is why I ask in what follows the foundations of my insistent offerings for electoral observation, based in the need to demand conditions and guarantees for electoral Justice. They represent the conditions for the Venezuelan political process that make me reaffirm that an international observation would provide all Venezuelans with peace of spirit when the time comes to count the votes.

General conditions of the process and the campaign, a level playing field

Then he cites the problems in details in over a dozen pages, I will just cite the main subjects:

-Use of Financial resources (by the Government)

-Access to the media

-Confusion in ballots

-Security Plan, Operacion de liberación del Pueblo (OLP)

-Changes in the rules of the game.

-The ban of certain opposition candidates

-Intervention of Parties by the Judicial system.

-State of Emergency in some States and its impact on the elections.

-Freedom of the Press and of Expression.

-The sentencing of Leopoldo Lopez.

Sincerely Luis Almagro





Making A PDVSA Bond Exchange Attractive

November 8, 2015

People have gotten all worked up about some statements made by Pdvsa’s President (who has other cambures now) that the company may “talk to bondholders to modify the maturities in the next two years in order to make them more manageable”.

What he is talking about is about a voluntary exchange by bondholders, something bondholders always are willing to listen to: Pdvsa would offer people to switch the US$ 1 billion in PDVSA 2016 and the US$ 4.1 billion of the PDVSA 2017 N, which matures in two parts, half in 2016 (US$ 2.05 billion) and US$ 2.05 billion in 2017.

While some form of exchange proposed to bondholders is definitely workable, the key here is the word voluntary: You have to offer bondholders something attractive in order to make the switch. From Pdvsa’s point of view, you want to maximize the number of bondholders that accept the exchange.

As I said above, people have gotten very excited about this possibility, because in the end, Pdvsa’s problem is one of liquidity and moving the Pdvsa 2016 and 2017N maturities two years down the road, would certainly boost the company’s bonds prices.

Except it would be very expensive. Like very, very expensive…

The plot below shows the price of the PDVSA’s 2016, 2017N and 2021 bonds (blue diamonds), together with its yield  to maturity (red squares):


The yield to maturity of the PDVSA2016 is 30%, it goes up to 50% for the 2017 with the low coupon and then drops again to 30% for the PDVSA 2021. I have also plotted the blue triangles which are the bond prices and, since there are no bonds maturing in 2018, 2019 and 2020, I have drawn free hand (using the Venezuela curve as a guide) a yield curve through the three points to try to capture the yield that would have to be offered in 2018, 2019 and 2020 in a proposed exchange. This is shown as large blue circles.

Now, let’s assume (there are many ways of doing this), that the idea is to move the 2016 to 2018 and the 2017N into two bonds, one in 2019 and the other in 2020, since there are no PDVSA bonds maturing in that period.

Let’s just consider the first case: Let’s offer something for the PDVSA 2016 to be exchanged one-to-one for a PDVSA 2018. As you can see from the graph, the PDVSA 2016 today is worth 79%. So, if you are holding 100k of that that bond you can sell it tomorrow in the market for 79k. So, anything the Government offers you, has to be worth 79k.

So, if we assume the 2018 bond has the same coupon of about 5% (I did not do exact calculations), from the graph yo can see that a 2018 bond with a 5% coupon, would have to yield 58% to maturity. In order for that to happen, the bond would be worth 27.5% of its face value.

This means that for it to have the same cash value today as the 2016, you would have to offer me 79k/27.5k= 2.87 times the face value!

This means that for a US$ 1 billion bond, you would have to offer US$ 2.8 billion in new bonds!!!

Sort of expensive, no?

But wait!!! Why would I take it? Where is my incentive? You are offering to give me a bond which is three years longer, that is worth the same as mine is worth today, same coupon. I am not interested, I will just wait until the PDVSA 2016 matures.

So, unless PDVSA offers MORE, this is not attractive. So, PDVSA would have to offer either more coupon or more capital, which would make it even more expensive.

See why this is not a piece of cake? Yu have to offer more capital or more coupon. Or both.

Some expert reader will be thinking: Oh, Devil! You are lying to us, because PDVSA can always offer more coupon and then it does not have to offer triple the amount…

Very true. But my calculations show that if PDVSA offered a 15% coupon for a 2018 bond in exchange for the 2016, it would have to offer you twice (Yes a factor of 2 instead of 3) as much as you have today, which would be cheaper, as three years of the extra 10% would only add up to 30% over the life of the bond. But going higher in coupon would certainly run into problems. And a factor of two is not exactly cheap.

But again, this is a theoretical case IDENTICAL for the investor than what he has today. On top of the double and the higher coupons, investors are going to ask for more. Either more capital, or more interest. Or both.

See the problem? It is very expensive to do this exchange and it means that in the end PDVSA would have a higher debt and the problem will be back in 2020, when PDVSA hopes (and prays!) oil prices would be higher.

Maybe PDVSA will just be running in place anyway.

To do this for the 2017N bond is not as onerous, but is still very expensive, I will not take you through the details, because it is a more complex case, but let’s just say that even at a 15% coupon, the bonds for 2019 and 2020 would be worth 35-40% of their nominal value, which implies you would have to pay people 1.5 times what they are owed today, plus a premium, plus the higher coupon.

Is there a cheaper way of doing this?

Well, yes, but no. Let me explain…

If PDVSA had not committed all that oil to the Chinese to pay for the Chinese loans, PDVSA could issue an oil-backed bond. Let’s say, for example, that PDVSA would sell oil every day to pay for these bonds (principal and interest) and each quarter, you would get paid part of the principal from a trust where the proceeds from the sale of the oil go to daily, plus interest.

If the bond is a two year bond, for example, you would get 1/8 of the principal paid each quarter plus interest. What’s the advantage? That if the bond is backed by oil exports, the interest rate (the coupon) would be much lower. Like way lower…5% maybe (guessing) on a two year bond. Now, an asset-backed loan like this, would be very attractive for investors, much like it was for the Chinese, as the structure is basically how the Chinese loans function: PDVSA sends oil, the proceeds go to a Chinese bank and the Chinese pay themselves from it.

Unfortunately, PDVSA likely has no ability to back the bonds this way, it probably has little spare production for this. But just think, it could offer the production as guarantee, just to lower the interest rate and then pay it with cash, if it has it. There are many ways to skin this cat…

Like the Republic could use some of the gold in the reserves to issue bonds guaranteed by the gold, but this would be just a way of lowering the coupon, the gold would be there just in case.

But, I digress. The main point is that a simple voluntary swap is not that doable due to the low bond prices. This makes it very expensive and seems like just kicking the can down the road.

Hard to get excited…and not as simple as people may think.





Venezuelan Central Bank Files Complaint Against Dolar Today In The US

October 24, 2015
View this document on Scribd

Thanks to the generosity of my readers, three of which sent me last night the document above, I managed to read the suit that the Venezuelan Central Bank filed against Dolar Today LLC, a Delaware company which supposedly owns the homonymous website and its related apps and channels.

I am no lawyer, but I did find this document remarkable in many ways. Perhaps the most ironic thing to me is that the Venezuelan Government via its puppet Central Bank (which the complaint says is independent), wants to use the US Justice system, daily criticized as unfair and manipulated by them, as a way to exert pressure on this webpage and even more audaciously, to seek “damages” from them.

But I am sure my followers will certainly enjoy the reading of this document full of the same crap that the Government spews out on a daily basis, this time translated into English and presented in legalese. And I am sure that the only intent of the complaint is or was to intimidate those involved with the website and its activities. Here I will refer to what I found ironic, hilarious, stupid, and enjoyable, without intending to be comprehensive. I invite my readers to add their own in the comments for everyone’s enjoyment.

To begin with, the only possible objective of this suit is to harass, intimidate and otherwise distract the owners of the Dolar Today webpages with the complaint. They will have to hire lawyers, spend money, go to deposition and the like.

The second interesting thing, to avoid saying laughable, is that says that Dolar Today is violating Article 1185 of Venezuela’s Commercial Code. That may well be, but the Judges in Delaware could care less about this violation, given that that is the law of the land in Venezuela, but certainly not in the US nor Delaware.

But it has to be laughable to argue that a webpage has created a form of cyber terrorism that has “wreaked, economic and reputational harm on the Venezuelan Central Bank by impeding its ability to manage the Republic’s economy and foreign exchange system.” by “Creating the false impression that the Central Bank and the Republic are incapable of managing Venezuela’s economy.”

Jeez, if a simple quote of a rate can do that and the Government and the Central Bank can do nothing about it, it would seem to me that the problem is not what the webpage did, but how clueless were the Government’s actions in trying to stop it. In fact, most Venezuelans remember multiple announcements suggesting that the Government was ready to “pulverize” the black market rate, but none of the plans were successful and in many cases people wondered what happened to them.

And you have to laugh at statements such as “Much of the world, including numerous members of the International Monetary Fund (“IMF”), engage in something that is both literally and figuratively quite foreign to the United States: the multiple exchange rate system.”

I would love to hear Nelson Merentes tell me the names of these “numerous” countries, assuming that given that he is a Mathematician, he will not argue that numerous means two or three countries. In fact the word numerous means “many” or “great in number”, which is simply false.

And you really have to be a cynic to suggest that the inflation rate in Venezuela is high simply because “it is an expected consequence of the Republic’s policies to promote social inclusion of the poor and economic growth”, when inflation is the worst possible indirect tax on the poor and those not included socially.

And since I am nitpicking, let me take advantage of it by noting that it is not true, as it says in numeral #26 and #43 of the complaint, that Venezuelans trade at the parallel or black rate via exchange houses. Such trades are not allowed at exchange houses and Venezuelans only can do these transactions privately.

Additionally, in the second graph of the complaint, the lawyers show a graph in which the parallel rate closely follows the implicit rate and only starting in October 2014 did the two diverge. In fact, had the Government made a long term plot of that, including the period before the “swap” market was shut down in May 2010, it would have shown that factors of two differences between the two have occurred before. Curiously, this widening of the difference between the two began taking place when oil prices began to drop and the Government no longer had “excess” funds to feed the black market, as an article in this week’s Wall Street Journal suggested was done via PDVSA in order to enrich a few individuals.

But the bottom line is, that the BCV and its lawyers will have to “prove” first, that Dolar Today actually manipulated the rate it published and second, that it used that information to benefit financially, something that I find extremely difficult to show. In the US, in the process of discovery, you have to support your accusations and if what you have is flimsy, the Judge is likely to throw at the case at the earliest stages of the process.

Simply put, how can they prove there was “wire fraud” or that the rate was set in order to to obtain a profit? A profit with respect to what?

And you have to love the fact that a Government that has shut down any possibility of a market for the parallel rate of exchange wold argue that “the DT Rate does not reflect any actual exchange market”. Of course, there are none allowed in Venezuela! The only “market” that exists is the border market in Colombia, which Dolar Today claims to use to set its rate.

In fact, between 2003 and 2010 the “swap” market existed and was legal and one could argue that it gave the rate transparency and liquidity, but it was the actions by the Government to shut it down that created the distortions that the BCV wants now to blame Dolar Today for.

I am also not so sure that you can prove a rate is “fraudulent” as the complaint charges. Even if the BCV could prove there was a transaction, it would prove that someone was willing to pay a particular rate and thus it would be hard to argue it was fraudulent. That is precisely what I tell people that say that the rate is being manipulated: Find me someone that sells them cheaper than that…or you sell it to me, since you can find it cheaper.

I have found no one that wold take me up on it.

I will stop at this, enjoy the reading. But if I could, I would suggest this to the Government: Allow a legal market to function for the parallel rate, I would bet that in time that market would find an equilibrium rate not too far or higher from where it is today. Because in the end that rate reflects the same lack of foreign currency which is causing causing lines, shortages and inflation. And it is the stubbornness of the Government to adjust and use economic theory that has created the distortions, including the anguish, pain and deaths of the thousands of people who can not get medicines or adequate medical care.

But the irresponsible regime of Nicolas Maduro wants to blame a web page…

(Maybe the complaint should be turned around and some Venezuelans should sue the Central Bank for the same reasons, but saying that by not following its Constitutional mandate of independence and monetary stability, it has caused harm on the Venezuelan people)

Electoral Cheating in Venezuela, One Deputy At A Time

October 13, 2015


All of what I will write in this post can be found elsewhere, but I thought it was important to show and save it into this database of abuses and  rip-offs that have characterized Chavismo, as well as explain it in English. I am not trying to discourage people. I am just trying to show how Chavismo is moving all of its power to minimize the oppositions vote in December, without any ethics, morals and with blatant abandon.

To begin with, within the MUD, there used to be a party called MIN Unidad. In one of those strange moves, the Electoral Board, removed the Board of MIN Unidad, replacing them with others who claimed to be owners of that particular political country club. The MUD proceeded to suspend Min Unidad from the MUD, as it could not guarantee the “purity” and backing of the MUD by anyone named by the CNE.

Next thing you know, parties had to choose the location of their party on the upcoming ballot and MUD got to choose before MIN Undad. Where did MIN Unidad choose in the ballot above? Precisely next to the MUD Unidad location, as you can see in this blow up:


a strategy clearly designed to fool voters into believing that MIN Unidad is part of MUD Unidad, which it ain’t.

You may think this is a dumb trick, but it works. Too many people get flustered when voting with these machines and can be confused by such subtleties, even if they have been warned about it. In fact, I went with my then elderly mother to help her cast her vote a few years back and even though she had memorized every step, once she was in front of the ballot, she had no clue as to what to do.

Clearly, the MIN Unidad location and design should nit have been allowed by the Electoral Board, but ethics is a four letter word among Chavistas, so there was simply no recourse and the position of MIN Unidad in the ballot stands for the upcoming Parliamentary election.

But it gets worse…

Let me now show you that ballot in better definition for Circunscripción 1 in Aragua State:


In the MUD Unidad ballot is Ismael Garcia, a former Podemos leader who is clearly opposition. But wait! In the Min Unidad the candidate is also Ismael Garcia. What gives?

Well, the MUD registered Ismael Garcia and Jose Trujillo on August 7th. as its candidates. On August 15th. MIN Unidad registered its two candidates Eduardo Nava and Belkys Cermeño. But then, within the period that you are allowed to do it, MIN Unidad changed its candidates to Isamel Garcia (Not the same one as the MUD) and Freddy Solorzano.

Thus, when people see the ballots, they will not necessarily know which one is which. This is clearly an unethical attempt to deceive and take votes away from the “real” Ismael Garcia. While the law does not forbid two candidates with the same name running for the same office, the CNE should have at least made sure that voters could differentiate the two. But, of course, they hide behind the law and their lack of ethics.

The point of this article is that there are 1001 tricks that Chavismo will apply come Dec. 6th. but people are not being warned enough or not enough has been done about them. Instead we are supposed to go vote innocently into this unfair set-up with everyone thinking that we will get 80% of the votes and thus Deputies. I don’t believe this is a responsible way of handling this. People are supposed to shut up, move forward and maybe win, but maybe lose too.

I warned about all these tricks in August, if the above is not proof that Chavismo’s bag of rip-offs is not full of them, then let me sell you a used car. Really, it’s in great condition, low mileage, only one owner…cheap too!


Venezuela’s Vital Signs by Paul Esqueda

October 11, 2015

I have been under the weather for a week now and the two articles I have been plotting in my mind have not been able to get completed. But fortunately, my good friend Paul Esqueda, who has written here before, sent me the article below, which is timely and something I was worrying about, since about ten days ago Venezuela’s Minister of Finance “promised” investors in New York to  publish some of the missing data. But to this day, we are all still waiting, including Paul:


The vital economic signs of the country constitute key information in fundamental decision making by all individuals and organizations operating or planning to operate in Venezuela. The Venezuelan Central Bank has not published the main economic indicators of the country in the last nine months, particularly inflation (Consumer Price Index) and gross domestic product (GDP). This is in total contradiction with what is stated in the by-laws of the bank in its Article 31, which is a national act of Congress. It clearly states that “The Central Bank of Venezuela will be guided by principles of transparency. In this regard, without prejudice to their institutional responsibilities, the Central Bank will keep informed in a timely and reliable manner the National Executive and other State agencies, public and private, national and foreign and the public in general on the implementation of their policies, decisions and resolutions of the Board, reports, publications, research and statistics to have the best information on the evolution of the Venezuelan economy, without compromising the confidentiality rules as appropriate in accordance with the Constitution. In fulfilling the mandate above, the Central Bank of Venezuela will perform regular monetary policy meetings and publish the minutes of such meetings through the means which it deems appropriate, including use of the most advanced computing services.”

What are Venezuela’s official vital economic signs? If you are entering the workforce or retired or considering retirement, is your projected income sustainable and sufficient in the long term for a decent living? How are companies currently operating in Venezuela planning their operations without reliable information? Are there any potential investors interested in Venezuela in such state of affairs? These questions and many others would have to rely on second hand sources (IMF, IADB, Dolar Today, and the Devil’s Excrement among others) to find answers for the moment. The current Venezuelan Government has chosen to let uncertainty reign by providing no information based on the fact that there is a state of “economic war” There is no formal official declaration of war against any specific entity so that excuse just adds to the uncertainty and to the overall country risk.

The vital signs of a person’s health are typically body temperature, pulse, blood test results, ability to breath and move about. When an individual is found outside the normal parameters in all the risk factors, the medical doctor can make informed decision about next steps to improve the person’s health. An extreme situation may require putting the patient in the extreme care unit on a respirator with all his/her vital signs being monitored 24 hours a day. The vital sign are critical to determine whether to continue life depending on the prognosis. What is the state of the Venezuelan economy’s health? What is the general perception of the credit rating experts? The rating of Venezuela ranges from CCC and Caa3 (S&P, Moodys and Fitch) as of 19/11/2015 which qualifies the economy as “extremely speculative.” Is Venezuela in a nonresponsive state by not releasing the main economic indicators? When a patient is in a nonresponsive state, he/she has no knowledge but those around him/her do know. Is the average Venezuelan conscious of the gravity of the situation? Are lenders pulling the plug on Venezuela? Where is the transparency declared in law of the Venezuelan Central Bank? Is it a crime to mismanage the economic future of all Venezuelans with evident violations of the law?  Undoubtedly history will pass the final judgment.

Hyperinflated Arepa Index IX: Index Resumes Rise

October 5, 2015


We knew it would not last, and the Hyperinflated Arepa Index (HAI)  resumed its rise, jumping from Bs. 440 to Bs. 580 in the last month, for a 31.8% rise. With this rise, the HAI is up 283% since last November 17 2014, indicating that it will likely hit the 300% rise in its anniversary.

This is likely assured, given that in the next two months, monetary liquidity (M2) will rise somewhere between 15% and 20% as has been traditional when the Government pays its end of the year bonuses. This will put even more pressure on prices, including that of the parallel rate of exchange.


I inquired again about the drop last time with the owner, but he sort of evaded the question, saying again that they changed their invoices (???) but there was no real drop. The drop will remain a mystery for the time being.


Get every new post delivered to your Inbox.

Join 13,022 other followers