Archive for February, 2005

February 7, 2005

About a month ago, our dog suddenly died. She was only four, a
delightful, loving and slightly crazy Doberman. I did not mention it
in the blog, because it was quite tough to say much about it,
something anyone that has had pets will surely understand.

It was not clear why she died so suddenly, her liver was inflamed, she
had lost her appetite and within twenty four hours she was dead of
something that appeared to be akin to poisoning, but it was hard to
imagine how it could have happened.

Two weeks go we heard from our vet that more cases similar to her had
been happening in Caracas and cities nearby. On Friday, they called us
to find out what we fed the dog and whether we still had some of her
food.

Today, Purina of Venezuela carried full page ads in Caracas
newspapers, saying that as a precautionary measure they were removing
their Dog Chow line of dog food from the market, saying:

“We are taking this action after receiving veterinary reports that
indicate that some pets may have presented health problems due to
their feeding…Despite not having evidence that these reports originate
by the consumption of dog food, we believe that there is some problem
and we want to take precautions to insure the health of the pets and
the confidence of the owners”

I had never heard of this happening anywhere in the world and still
have a hard time imagining what could have caused it. It surprises me
that they are so forthcoming with the problem as it will be very hard
for the company to overcome the news that will surround it.

It does sadden me that by picking the wrong food, I unwittingly had
something to do with her death. I write this, so that anyone with a
dog being fed with Purina products in Venezuela, immediately stop
doing it until the matter is understood.

February 6, 2005

From today’s El Nacional by reporter Luis Garcia Mora, it speaks for itself

A Totalitarian Scheme

Let’s not fool ourselves, dear readers.

As a well known friend and medical doctor says, when he refers to the
regime and the current moment, anyone that thinks that this is going
to stabilize and its going to produce results is wrong.

None of this is permanent.

It has been six years and the country is living a subsistence crisis,
where one can feel the continuous collapse of populist management. You
can feel it, you can touch it: the waste is beyond belief and each
Bolivar is now worth only a cent. And this in the middle of the
highest oil windfall ever. You only need to see the streets, the
cities, to appreciate the national disaster.

The missions, the Bolivarian units, attempts on the fly and through
the grassroots to redefine a new social structure in the popular
sectors where the economic asphyxia is explosive. Neither his
Government nor his party work for Chavez and the human resources and
the technicians of the Armed Forces have reached their limit of
utilization for social politics, which implies there is a fight to
establish a new relationship between the poor and the Government.

For the Venezuelan without means, there is an abyss between the
whirlpool of billions and the galloping corruption that is now
manifesting itself without even blushing, in the highest spheres of
power. And all of the their myths to get out of their hole have
exploded, which is why trapped between the orthodox path, to be honest
and work hard, and the path of crime, rip offs, illegalities, jewels,
shoes and fancy watches, there is no other option, but to join the
Government and the missions to survive. And that is where Chávez is
launching his last bet.

The machinery of Government does not work.

And once again, it is facing a phase of accelerated decomposition.

This has been a characteristic of his Government, which every once in
while goes into a phase of self-destruction. Because of its waste,
because of its ineptitude.

A state that has been going like this for six years.

Spain (to give an example) tripled its GDP in twenty years and is
living in a state of bonanza, while here what we have is cities
submerged in garbage and crime. In only two months Valencia and
Carabobo appear as if the locust had gone by.

As another doctor friend says, in six years what we are going to have
is an autolyitic crisis. That is, destruction: “A bunch of guys say
that they are rebuilding the country and saving Venezuela and what
they are doing is deepening all of its imperfections and destroying
it. And not only in the physical sense, also in the moral one. How is
it possible, my dear reader, that Anderson (the killed Prosecutor) has
gone from having his funeral in the national mausoleum to being a
crook? Where are the moral reserves? And none of Chavez’ supporters
dares to say anything.

They never end up showing the slightest capacity for self-criticism
and recomposition in front of a public opinion which just observes it
all with perplexity.

Because the conclusion you have to reach is that with this vision of a
society, success is simply not possible.

As someone says, Chávez is surrounded by a Cyclopic pressure within
the structures of the regime, which he can’t get out of, “unless he
can correct that, but if he does he will be overthrown. It is
(corruption) all over the place. Horizontally and vertically”

“And in a reality where the Bolivar does not yield much, it will
explode, because you can’t give charity to the whole country”

A collective idea has been created that we are living a folly.

The Chavista folly. Which has lasted six long years. Seemingly
infinite ones. Where each new plan is crazier than the next.

An improbable world where Ramon Martinez (Governor of Sucre) created
an airline three years ago and nobody knows where it is. The same way
nobody knows where the Trans-Antillean airline that Chávez created
with his former presidential plane is. Lots of broken projects. Where
are the vertical chicken coops? So much inconclusive and unfinished
junk. How about those entrepreneurs with the projects to make tiles?
And the river boats to connect to the Meta River? A fortune thrown
overboard. Where are the much promised harvests? The modernization of
the penitentiary system? The humanization of jails? The schools and
home for the street kids?

But above all this, the crazy birth of a new state that simultaneously
is a single party and a segregationist apartheid of the other half of
the country, which does not agree with Chávez and his six years and
his totalitarian experimentation.

A sort of fascism (or fascism). Which is escaping through the seams.
And that is asking for new political-institutional experiments, to
execute in a more effective way the acceleration, conscious and
programmed, of a totalitarian process on society and the state.

A totalitarian spirit.

Which has been expressed in all of its nakedness, first, with the
defamation case against Tulio Álvarez and Ybeyise Pacheco, which
reveals in a very transparent fashion in one single action the
criminalization of dissidence and of freedom of expression.

Afterwards, in the announcement by the new President of the Supreme
Court, Omar Mora, that he is going to act aggressively and without
losing any time to remove from the Judiciary all of those judges
“coupsters” that are anti-Chavez. A warning that connects directly
with the suspension by Luis Velázquez Alvaray, President of the
Judiciary Commission, of the three judges which revoked the
prohibition from leaving the country against 27 people charge with
civil rebellion for their part in the events of April 11th (2002),
backing Carmona.

But, above all considerations, the accusation against Patricia Poleo
by the Attorney General/Prosecutor Isaias Rodriguez for the supposed
crime of obtaining and publishing confidential documents from a
judicial file.

For informing.

And that is very grave.

Because Prosecutor Rodriguez has said that ” it is not the same to
handle the confidentiality of sources of information that handling
documents that sustain that information” and that means simply that if
this nonsense is successful, investigative reporting is not only
finished here but also the exercise of pure reporting.

The right to be informed my friends.

Because the question that arises is why did the Prosecutor give that
jump that cuts down a freedom which is considered by contemporary
political thinking as one of the fundamental pillars of a pluralistic
society?

First, because there’s no democracy. Or it will die instantly the
moment that this arbitrariness is completed, this abuse, this madness.

And after it, because Rodriguez tries to escape from the truth about
Anderson. Of the extortion network that it is said had rotted his
institution. Of a dead hero of the revolution, who had amassed a
sudden fortune in which he kept, in his home alone, 1.5 billion
bolivars and six hundred thousand dollars.

Of a scandal Chavez has been unable to escape from, even threatening
to freeze relations with Colombia, nor provoking the first economic
and military power of the world.

Of a scandal that on top of that, sinks its deepest roots in the
social decomposition of the regime itself.

Because with the accusation against Patricia, Tulio, Ibeyise, Uson and
the signators of the decree, and taking into account the control the
Government has over the institutions, with the fiscal and judiciary
monopoly, what is expressing itself, dear reader, is how far the
regime is willing to go. What it is ready to do or transgress, in
order to impose its hegemony.

It could be all that is imaginable. With a clear message, to the rest
of Venezuelans, that the best thing anyone can do is not to fight with
him, not to confront him. Or what is the same, a final and definite
turn of the screws (and defining one) in this scheme of tightening and
loosening, and in which each time it loosens up, it leaves you tighter
than before, thus allowing you to live with the minimum oxygen
possible, so that you understand that the cost of fighting with him is
jail. Or bringing you to trial.

A totalitarian scheme.

February 6, 2005

From today’s El Nacional by reporter Luis Garcia Mora, it speaks for itself

A Totalitarian Scheme

Let’s not fool ourselves, dear readers.

As a well known friend and medical doctor says, when he refers to the
regime and the current moment, anyone that thinks that this is going
to stabilize and its going to produce results is wrong.

None of this is permanent.

It has been six years and the country is living a subsistence crisis,
where one can feel the continuous collapse of populist management. You
can feel it, you can touch it: the waste is beyond belief and each
Bolivar is now worth only a cent. And this in the middle of the
highest oil windfall ever. You only need to see the streets, the
cities, to appreciate the national disaster.

The missions, the Bolivarian units, attempts on the fly and through
the grassroots to redefine a new social structure in the popular
sectors where the economic asphyxia is explosive. Neither his
Government nor his party work for Chavez and the human resources and
the technicians of the Armed Forces have reached their limit of
utilization for social politics, which implies there is a fight to
establish a new relationship between the poor and the Government.

For the Venezuelan without means, there is an abyss between the
whirlpool of billions and the galloping corruption that is now
manifesting itself without even blushing, in the highest spheres of
power. And all of the their myths to get out of their hole have
exploded, which is why trapped between the orthodox path, to be honest
and work hard, and the path of crime, rip offs, illegalities, jewels,
shoes and fancy watches, there is no other option, but to join the
Government and the missions to survive. And that is where Chávez is
launching his last bet.

The machinery of Government does not work.

And once again, it is facing a phase of accelerated decomposition.

This has been a characteristic of his Government, which every once in
while goes into a phase of self-destruction. Because of its waste,
because of its ineptitude.

A state that has been going like this for six years.

Spain (to give an example) tripled its GDP in twenty years and is
living in a state of bonanza, while here what we have is cities
submerged in garbage and crime. In only two months Valencia and
Carabobo appear as if the locust had gone by.

As another doctor friend says, in six years what we are going to have
is an autolyitic crisis. That is, destruction: “A bunch of guys say
that they are rebuilding the country and saving Venezuela and what
they are doing is deepening all of its imperfections and destroying
it. And not only in the physical sense, also in the moral one. How is
it possible, my dear reader, that Anderson (the killed Prosecutor) has
gone from having his funeral in the national mausoleum to being a
crook? Where are the moral reserves? And none of Chavez’ supporters
dares to say anything.

They never end up showing the slightest capacity for self-criticism
and recomposition in front of a public opinion which just observes it
all with perplexity.

Because the conclusion you have to reach is that with this vision of a
society, success is simply not possible.

As someone says, Chávez is surrounded by a Cyclopic pressure within
the structures of the regime, which he can’t get out of, “unless he
can correct that, but if he does he will be overthrown. It is
(corruption) all over the place. Horizontally and vertically”

“And in a reality where the Bolivar does not yield much, it will
explode, because you can’t give charity to the whole country”

A collective idea has been created that we are living a folly.

The Chavista folly. Which has lasted six long years. Seemingly
infinite ones. Where each new plan is crazier than the next.

An improbable world where Ramon Martinez (Governor of Sucre) created
an airline three years ago and nobody knows where it is. The same way
nobody knows where the Trans-Antillean airline that Chávez created
with his former presidential plane is. Lots of broken projects. Where
are the vertical chicken coops? So much inconclusive and unfinished
junk. How about those entrepreneurs with the projects to make tiles?
And the river boats to connect to the Meta River? A fortune thrown
overboard. Where are the much promised harvests? The modernization of
the penitentiary system? The humanization of jails? The schools and
home for the street kids?

But above all this, the crazy birth of a new state that simultaneously
is a single party and a segregationist apartheid of the other half of
the country, which does not agree with Chávez and his six years and
his totalitarian experimentation.

A sort of fascism (or fascism). Which is escaping through the seams.
And that is asking for new political-institutional experiments, to
execute in a more effective way the acceleration, conscious and
programmed, of a totalitarian process on society and the state.

A totalitarian spirit.

Which has been expressed in all of its nakedness, first, with the
defamation case against Tulio Álvarez and Ybeyise Pacheco, which
reveals in a very transparent fashion in one single action the
criminalization of dissidence and of freedom of expression.

Afterwards, in the announcement by the new President of the Supreme
Court, Omar Mora, that he is going to act aggressively and without
losing any time to remove from the Judiciary all of those judges
“coupsters” that are anti-Chavez. A warning that connects directly
with the suspension by Luis Velázquez Alvaray, President of the
Judiciary Commission, of the three judges which revoked the
prohibition from leaving the country against 27 people charge with
civil rebellion for their part in the events of April 11th (2002),
backing Carmona.

But, above all considerations, the accusation against Patricia Poleo
by the Attorney General/Prosecutor Isaias Rodriguez for the supposed
crime of obtaining and publishing confidential documents from a
judicial file.

For informing.

And that is very grave.

Because Prosecutor Rodriguez has said that ” it is not the same to
handle the confidentiality of sources of information that handling
documents that sustain that information” and that means simply that if
this nonsense is successful, investigative reporting is not only
finished here but also the exercise of pure reporting.

The right to be informed my friends.

Because the question that arises is why did the Prosecutor give that
jump that cuts down a freedom which is considered by contemporary
political thinking as one of the fundamental pillars of a pluralistic
society?

First, because there’s no democracy. Or it will die instantly the
moment that this arbitrariness is completed, this abuse, this madness.

And after it, because Rodriguez tries to escape from the truth about
Anderson. Of the extortion network that it is said had rotted his
institution. Of a dead hero of the revolution, who had amassed a
sudden fortune in which he kept, in his home alone, 1.5 billion
bolivars and six hundred thousand dollars.

Of a scandal Chavez has been unable to escape from, even threatening
to freeze relations with Colombia, nor provoking the first economic
and military power of the world.

Of a scandal that on top of that, sinks its deepest roots in the
social decomposition of the regime itself.

Because with the accusation against Patricia, Tulio, Ibeyise, Uson and
the signators of the decree, and taking into account the control the
Government has over the institutions, with the fiscal and judiciary
monopoly, what is expressing itself, dear reader, is how far the
regime is willing to go. What it is ready to do or transgress, in
order to impose its hegemony.

It could be all that is imaginable. With a clear message, to the rest
of Venezuelans, that the best thing anyone can do is not to fight with
him, not to confront him. Or what is the same, a final and definite
turn of the screws (and defining one) in this scheme of tightening and
loosening, and in which each time it loosens up, it leaves you tighter
than before, thus allowing you to live with the minimum oxygen
possible, so that you understand that the cost of fighting with him is
jail. Or bringing you to trial.

A totalitarian scheme.

February 6, 2005

From today’s El Nacional by reporter Luis Garcia Mora, it speaks for itself

A Totalitarian Scheme

Let’s not fool ourselves, dear readers.

As a well known friend and medical doctor says, when he refers to the
regime and the current moment, anyone that thinks that this is going
to stabilize and its going to produce results is wrong.

None of this is permanent.

It has been six years and the country is living a subsistence crisis,
where one can feel the continuous collapse of populist management. You
can feel it, you can touch it: the waste is beyond belief and each
Bolivar is now worth only a cent. And this in the middle of the
highest oil windfall ever. You only need to see the streets, the
cities, to appreciate the national disaster.

The missions, the Bolivarian units, attempts on the fly and through
the grassroots to redefine a new social structure in the popular
sectors where the economic asphyxia is explosive. Neither his
Government nor his party work for Chavez and the human resources and
the technicians of the Armed Forces have reached their limit of
utilization for social politics, which implies there is a fight to
establish a new relationship between the poor and the Government.

For the Venezuelan without means, there is an abyss between the
whirlpool of billions and the galloping corruption that is now
manifesting itself without even blushing, in the highest spheres of
power. And all of the their myths to get out of their hole have
exploded, which is why trapped between the orthodox path, to be honest
and work hard, and the path of crime, rip offs, illegalities, jewels,
shoes and fancy watches, there is no other option, but to join the
Government and the missions to survive. And that is where Chávez is
launching his last bet.

The machinery of Government does not work.

And once again, it is facing a phase of accelerated decomposition.

This has been a characteristic of his Government, which every once in
while goes into a phase of self-destruction. Because of its waste,
because of its ineptitude.

A state that has been going like this for six years.

Spain (to give an example) tripled its GDP in twenty years and is
living in a state of bonanza, while here what we have is cities
submerged in garbage and crime. In only two months Valencia and
Carabobo appear as if the locust had gone by.

As another doctor friend says, in six years what we are going to have
is an autolyitic crisis. That is, destruction: “A bunch of guys say
that they are rebuilding the country and saving Venezuela and what
they are doing is deepening all of its imperfections and destroying
it. And not only in the physical sense, also in the moral one. How is
it possible, my dear reader, that Anderson (the killed Prosecutor) has
gone from having his funeral in the national mausoleum to being a
crook? Where are the moral reserves? And none of Chavez’ supporters
dares to say anything.

They never end up showing the slightest capacity for self-criticism
and recomposition in front of a public opinion which just observes it
all with perplexity.

Because the conclusion you have to reach is that with this vision of a
society, success is simply not possible.

As someone says, Chávez is surrounded by a Cyclopic pressure within
the structures of the regime, which he can’t get out of, “unless he
can correct that, but if he does he will be overthrown. It is
(corruption) all over the place. Horizontally and vertically”

“And in a reality where the Bolivar does not yield much, it will
explode, because you can’t give charity to the whole country”

A collective idea has been created that we are living a folly.

The Chavista folly. Which has lasted six long years. Seemingly
infinite ones. Where each new plan is crazier than the next.

An improbable world where Ramon Martinez (Governor of Sucre) created
an airline three years ago and nobody knows where it is. The same way
nobody knows where the Trans-Antillean airline that Chávez created
with his former presidential plane is. Lots of broken projects. Where
are the vertical chicken coops? So much inconclusive and unfinished
junk. How about those entrepreneurs with the projects to make tiles?
And the river boats to connect to the Meta River? A fortune thrown
overboard. Where are the much promised harvests? The modernization of
the penitentiary system? The humanization of jails? The schools and
home for the street kids?

But above all this, the crazy birth of a new state that simultaneously
is a single party and a segregationist apartheid of the other half of
the country, which does not agree with Chávez and his six years and
his totalitarian experimentation.

A sort of fascism (or fascism). Which is escaping through the seams.
And that is asking for new political-institutional experiments, to
execute in a more effective way the acceleration, conscious and
programmed, of a totalitarian process on society and the state.

A totalitarian spirit.

Which has been expressed in all of its nakedness, first, with the
defamation case against Tulio Álvarez and Ybeyise Pacheco, which
reveals in a very transparent fashion in one single action the
criminalization of dissidence and of freedom of expression.

Afterwards, in the announcement by the new President of the Supreme
Court, Omar Mora, that he is going to act aggressively and without
losing any time to remove from the Judiciary all of those judges
“coupsters” that are anti-Chavez. A warning that connects directly
with the suspension by Luis Velázquez Alvaray, President of the
Judiciary Commission, of the three judges which revoked the
prohibition from leaving the country against 27 people charge with
civil rebellion for their part in the events of April 11th (2002),
backing Carmona.

But, above all considerations, the accusation against Patricia Poleo
by the Attorney General/Prosecutor Isaias Rodriguez for the supposed
crime of obtaining and publishing confidential documents from a
judicial file.

For informing.

And that is very grave.

Because Prosecutor Rodriguez has said that ” it is not the same to
handle the confidentiality of sources of information that handling
documents that sustain that information” and that means simply that if
this nonsense is successful, investigative reporting is not only
finished here but also the exercise of pure reporting.

The right to be informed my friends.

Because the question that arises is why did the Prosecutor give that
jump that cuts down a freedom which is considered by contemporary
political thinking as one of the fundamental pillars of a pluralistic
society?

First, because there’s no democracy. Or it will die instantly the
moment that this arbitrariness is completed, this abuse, this madness.

And after it, because Rodriguez tries to escape from the truth about
Anderson. Of the extortion network that it is said had rotted his
institution. Of a dead hero of the revolution, who had amassed a
sudden fortune in which he kept, in his home alone, 1.5 billion
bolivars and six hundred thousand dollars.

Of a scandal Chavez has been unable to escape from, even threatening
to freeze relations with Colombia, nor provoking the first economic
and military power of the world.

Of a scandal that on top of that, sinks its deepest roots in the
social decomposition of the regime itself.

Because with the accusation against Patricia, Tulio, Ibeyise, Uson and
the signators of the decree, and taking into account the control the
Government has over the institutions, with the fiscal and judiciary
monopoly, what is expressing itself, dear reader, is how far the
regime is willing to go. What it is ready to do or transgress, in
order to impose its hegemony.

It could be all that is imaginable. With a clear message, to the rest
of Venezuelans, that the best thing anyone can do is not to fight with
him, not to confront him. Or what is the same, a final and definite
turn of the screws (and defining one) in this scheme of tightening and
loosening, and in which each time it loosens up, it leaves you tighter
than before, thus allowing you to live with the minimum oxygen
possible, so that you understand that the cost of fighting with him is
jail. Or bringing you to trial.

A totalitarian scheme.

Venezuela in US News and World Report

February 5, 2005

Article in US News and World Report, very tough on Carter.

Three new blooms: A hybrid and two Species

February 5, 2005

 



Unknown hybrid, big flower, generous flowering and regular. On the right the same flower from the side as requested by a friend (Complacida B.!)



Vey nice Cattleya Gaskelliana from venezuela.          Sideways view of Cirropetallum Gracillinum from Asia. It was not easy to take pictures, those hairs would move at the slightest breeze. I will try to taka better pictures of a new bloom next week. This is the first time this flowers for me. I love these weird looking ones! Nature is amazing!



Another side view, trying to get closer to the flowers.     Top View



Bottom View

Another day of great sayings

February 5, 2005

Hugo Chavez: We are not coupsters, we are revolutionaries.


Yes, we know that for you the end justify the means


 


Freddy Bernal (Mayor of Libertador Municipality): At least we went to jail for our coup.


 


We are still waiting for Chavez’s Government to jail General Lucas Rincon, the Commander in Chief who told the country”The President was asked to resigned, which he accepted”. By the way Weren’t you also pardoned and never tried? 


 


Omar Mora (President of the Supreme Court): The 4th. of February (1992) was a rebellion, the 11th. of April was a vulgar coup.


 


Well, I think yours was a bloody coup, the other one was a peaceful rebellion followed by three coups. Now, in my mind they were all very vulgar.


 


Omar Mora: I would have never been a Justice under the 61 Constitution, despite aspiring to be one and being proposed a few times. I was always left out.


 


Which goes to show the Fourth Republic was wiser and better than what they want everyone to think.


 


Andres Izarra (Minister of Information): President Chavez has not announced that the country will sell CITGO, only that they are considering what to do with that business.


 


Well, Chavez used the word “vender”, referring to CITGO. You should stop telling him everything; he just can’t keep a secret.


 


Nicolas Maduro (President of the National Assembly): The US could be behind the suspension of Uribe’s trip to meet Chavez.


 


It’s called omnipresence. All good comes from Chavez, all bad from US, even diarrea 

Another day of great sayings

February 5, 2005

Hugo Chavez: We are not coupsters, we are revolutionaries.


Yes, we know that for you the end justify the means


 


Freddy Bernal (Mayor of Libertador Municipality): At least we went to jail for our coup.


 


We are still waiting for Chavez’s Government to jail General Lucas Rincon, the Commander in Chief who told the country”The President was asked to resigned, which he accepted”. By the way Weren’t you also pardoned and never tried? 


 


Omar Mora (President of the Supreme Court): The 4th. of February (1992) was a rebellion, the 11th. of April was a vulgar coup.


 


Well, I think yours was a bloody coup, the other one was a peaceful rebellion followed by three coups. Now, in my mind they were all very vulgar.


 


Omar Mora: I would have never been a Justice under the 61 Constitution, despite aspiring to be one and being proposed a few times. I was always left out.


 


Which goes to show the Fourth Republic was wiser and better than what they want everyone to think.


 


Andres Izarra (Minister of Information): President Chavez has not announced that the country will sell CITGO, only that they are considering what to do with that business.


 


Well, Chavez used the word “vender”, referring to CITGO. You should stop telling him everything; he just can’t keep a secret.


 


Nicolas Maduro (President of the National Assembly): The US could be behind the suspension of Uribe’s trip to meet Chavez.


 


It’s called omnipresence. All good comes from Chavez, all bad from US, even diarrea 

PDVSA and the sale of CITGO

February 4, 2005

PDVSA, via words of President Hugo Chavez himself, has expressed its desire to sell PDVSA’s affiliate company in the USA CITGO. CITGO is a refining and distribution company. PDVSA has owned all of CITGO since 1989, after purchasing a stake in the company and other refineries in the US in 1986. CITGO was purchased as part of the country’s internationalization strategy of insuring the placement of the country’ oil production in both weak and strong markets. Basically, Venezuela’s oil contains too much sulfur, which in time of low demand implied the country could not find refining capacity for all of its crudes. This created to volatilities for selling the country’s oil: The price volatility and the volatility of not being able to place all of the country’ productions, particularly when prices were low.  By purchasing refineries and eventually all of CITGO, Venezuela acquired the capacity to process almost all of its production. Citgo was one part of the internationalization strategy, which was divided worldwide under PDVSA Holdings for the US and a Dutch company, Propernyn, for Europe and the rest of the world.


When Hugo Chávez became President, the whole internationalization strategy was severely questioned. The arguments included that the policy had not been productive for the country in dividends, that Venezuela had been subsidizing US consumers and that it was all invented as a way of stashing away PDVSA’s savings out of the reach of the Government. If the latter had been true, there would have been more straightforward ways of preserving savings, such as buying oil producing or distribution companies elsewhere such as YPF. Instead, PDVSA undertook a very carefully planned strategy of buying strategic properties to guarantee placing the country’s production. It is easy to say now that demand is strong that the strategy was not a good one, but there was a time when it was not trivial for the company to place all of its high sulfur oil production.


 


Despite the attacks on CITGO, talk of selling it died down, after each of the Presidents’ of PDVSA named by Chávez defended its presence within the company’s structure. There were rumors in early 2003 that the Government was looking for a buyer, which intensified even further when the company issued debt way ahead of the maturity of the 2003 PDVSA Finance issue, which matured in August 2003. It seemed suspicious to issue notes in February, arguing that part of the proceeds would be used to pay another issue maturing six months later.


The possible sale had been mostly forgotten until this week, when Hugo Chávez himself began   making charges which reflect either a lack of information on the subject by those that surround him or his desire to convince the people of the sale using political arguments. All of Chávez’ arguments, from the fact that few Venezuelans work at the company, or that CITGO subsidizes Bush or does not own any of the gas stations are all moot. They appear to be excuses to justify the sale politically. PDVSA has never claimed that it owns the CITGO gasoline station network, an investment that definitely could not be justified.


 


What is not clear is exactly why the Government wants to sell CITGO, other than for political reasons.   Does it want to raise the cash or does it want to get rid of a property that could become entangled in lawsuits in the US, but relating to issues here in Venezuela? The only thing that is clear is that the idea has been refloated by the new members of the new PDVSA Board named recently and that the previous Presidents of both PDVSA and CITGO opposed the sale.


 


Strategically, CITGO may not be as important any longer for Venezuela given the strong oil markets of today, but there is no guarantee that they will remain strong forever and it guarantees the placement of an important fraction of the country’s oil production. Economically, the argument that it is not a good business is hard to believe as the gasoline market is very competitive in the US and prices at the pump level vary very little. CITGO has been paying dividends to PDVSA and in 2003 the company had earnings of US$ 439 million. If there were an ideal buyer, it may also be justified, as PDVSA could sell CITGO and use the money elsewhere, but CITGO has its particular characteristics that make a perfect fir difficult.


The public announcement of the sale will certainly not facilitate executing the sale of CITGO.


 


Expressing the outright desire to sell it and arguing that it is not a good business publicly, does not appear to be the best negotiating strategy. Additionally, PDVSA holds long term contracts with CITGO that may make the sale quite complex. In the end, it will all be a matter of price. We suspect the Government has an overoptimistic estimate of how much it could fetch for CITGO. A good comparable to CITGO is Valero Energy (itself a company that may be interested) that trades publicly with a P/E of roughly 10, which will give CITGO a valuation of around US$ 5 billion, below the numbers that the Government has been suggesting in private, which range from US$ 7 billion to US$ 12 billion. We suspect these numbers are overoptimistic.


 


While mostly private companies are mentioned as possible buyers of CITGO, we also suspect that some oil producing countries may be more interested in it as a strategic investment, than private companies. That in itself may force the Government to rethink its strategy of selling the company. What is certainly not very responsible is to say the company is not a good investment, its business is not a good one and gasoline is sold at a discount. This instantly lowers the price you are trying to get for CITGO.


 


In the end, the sale of CITGO may simply be a way of having PDVSA get the funds to spend them in the next year and a half and guarantee Chavez’ election in late 2006. If true, it will be a true tragedy for Venezuela, as we will lose both a strategic property for our oil industry and a huge amount of money which will be used to satisfy the political needs of the revolution.

February 4, 2005

Headline #1 “Prices can’t go up” 


Foodstuffs? Gasoline? Rent? Newspapers? Clothing?


 


No, this was said by the Minister of Housing referring to the prices of real state. But let’s hear his words in detail:


 


The Minister of Housing, Julio Montes, suggested to real state agents and owners that “please do not increase prices”, due to the demand that will be sparked by the new financing mechanisms. “We don’t want to apply compulsive measures, but in the case that prices surpass the limits of the markets (??), we can ask to have them assessed and have reference prices”


 


Get it? He is asking people not to ask for higher prices for their property, a very normal type of human behavior. He does not want to apply any measures, but he has come up with a novel mechanism of valuing property, which apparently has nothing to do with markets. But the winning phrase has to be:


 


“If prices surpass the limits of the markets”


 


I will let the readers know when I find someone that understands how prices can exceed the limits of markets, whatever that may mean.


 


Headline #2 President of Supreme Court defends decision to review “power vacuum” ruling


 


The new President of the new Supreme Court said that the decision by the Full Supreme Court that ruled that on April 2002 there was a power vacuum and not a coup is “reviewable”.


 


But let’s hear exactly what this impartial judge thinks about a case he may have to rule on in the future based on the law:


 


“I said we were facing a coup. I told the Justices to stay firm and not to resign, to defend the Constitution, because by resigning we would create a crisis. As I said, I had no problems in telling the media that we had a coup here and this has been recognized by international instances (Irish movies?).”


 


Now, this is also an interesting precedent, the Supreme Court reviewing a decision by the Supreme Court. Why rule at all, if he already made up his mind? Guilty until proven innocent!Good Jurisprudence as they would say at Oxford Law.


 


Headline #3: Judges that voided decision suspended


 


The Supreme Court suspended the Judges of the 10th. Court of Appeals that yesterday voided the decision to prohibit those charged with going to the Presidential Palace of leaving the country. Said the President of the Court, the same one that called for impartial Justice the day before:


 


”In this way we emphasize that we will never again allow that impunity be generated in the country, that the Judges that have sworn to fulfill the Constitution…overrun the Constitution generating absolute impunity.”


 


Interesting, I guess you could say: Impunity is in the eyes of the beholder.


 


But let’s hear what another member of the Supreme Court says about this decision:


 


“I am concerned that the judges are being punished for deciding, which is in the nature of their functions. They have to have freedom according to the law and justice. If a judge is threatened, it will not be able to decide in an independent fashion to guarantee the rights of the citizens”


 


I could not have said it better, except she uses subversive words, like deciding, freedom, law, justice and independence which are simply not part of the revolutionary justice. Will she be removed?


 


Headline #4 And they were charged


 


Seven bankers were charged yesterday for usury. The case refers to issuing indexed loans to consumers, more than one hundred bankers and owners of banks are on the list to be charged. Curiously, one of those charged yesterday is the President of a bank that never issued indexed loans. Another one was President of a Chilean Bank who went bank to Chile years ago and no longer even works for the same group. Let’s see 100 bankers, 400 people that went to the Palace in Aril 2002, they are running out of opposition leaders to charge. Are murderers next? Nah! They are not a priority. Politics above all!