Archive for November 13th, 2007

Verbatim translation of a Presidential press release with my comments

November 13, 2007

things can get so bizarre in Venezuela
these days, that I feel I would do injustice to this press release by the Office of the Presidency that
I figured I should just translate the whole thing as if it was a Petkoff
Editorial or a good piece by someone else. However, I can’t help but make
comments about the things said in it, it is just impossible to resist!

“With a
biblical passage, the President of the Bolivarian Republic of Venezuela, Hugo
Chavez, responded to King Juan Carlos de Borbon about the incident that too
place at the Iberoamerican summit and emphasized that if he shuts up “The
stones of the Latin American people that are disposed to be free of all
colonialism after 500 years of colonization would cry out””

#1: Why is it that after 500 years we continue to blame our problem on
colonization? Who is trying to colonize whom right now? Isn’t Chavez the only
leader trying to spread hi “word and wealth” around the region? Does Lula think
he is not independent? Or Bachelet? Or even Kirchner? Did Bolivar lose the war
of Independence?
I just don’t think so…We are colonized by the Devil’s Excrement: oil, we just
can’t live with it and its negative effects.

“Upon his
arrival in
Caracas from Chile, the Venezuelan President remembered that
biblical passage (Luke 19,38-40) that tells us about Jesus entering
Jerusalem. At that point
someone asked him to have the people acclaiming him to shut up, but Christ
said:” if these shall hold their peace, the stones will cry out””

#2: While the reporter focuses on the people crying out, it would seem to me
that Chavez saw the analogy being the fact that He, the anointed one is involved, just as Christ was.
Nothing more, nothing less. The rest is simply fluff.

President revealed that he did not hear, nor see the King I his irate gesture
and that it was the Nicaraguan First Lady, Rosario Murillo who told him what
had happened. “I did not hear him. It was Daniel Ortega’s wife (who told me),
because they were closer. And they tell me that he said, “Why don’t you shut
up, coupster?”, but the last word was not heard.”

#3: Did you see the video
? Chavez is looking directly at Spain’s Prime Minister Zapatero and the
King sticks his head in the line of sight Chavez-Zapatero and says his now
infamous words. How could Chavez not see him or hear him? Or is the problem
that he never hears others or he is quite used to ignoring them because he is so full of himself? As for being a
coupster, which may be your favorite epithet, but you certainly are the only
proven coupster in Venezuela’s recent history. Because if Carmona staged a
coup, the proposed Constitutional reform is much worse. Just ask your buddy

President added: when Juan Carlos de Borbon explodes in the face of the
expressions of an Indian, they are exploiting 500 years of imperial arrogance,
500 years of royalty, trampling and 500 years of a superiority complex”

#4: Wait, wait. You did not see, you did not hear, but now you say he
“exploded”. And who is the Indian? Hugo Chavez? For God’s sake, now he wants to
be Indian and black, rather than the standard Venezuelan (80%), very mixed. In fact, have you seen his parents? Neither of them looks either
Indian or very black to me. I smell an inferiority complex here for some

said that, had he heard the explosion of the monarch at an opportune moment,
maybe he would have said: “I will not shut up, nor will I shut up, because
millions speak through my mouth, we are the children of Bolivar, those millions
that are the kids of Guicaipuro and Manuela, Jose Leonardo Chirinos, all of
those that the Spaniards assassinated here, cut their heads and ambushed. He
should be glad I did not hear him.”

#5: Thereis that Jesuschrist projection again. But, either you are Indian or black, but Bolivar was as white (and Spaniard) as they got, and oligarchic
as they come. And jeez, if you are going to go back 500 years with your
inferiority complex, maybe we should go back to Creation and complain to God,
that it was just our bad luck that he did not give you a good baseball pitching
arm so that you would have realized your true dream and we would be talking
about your multi-million dollar contract instead of your bad boy antics. 

New website with great presentations on our electoral problems past and present

November 13, 2007

Somebody sent me the link to this website devoted to the Venezuelan Electoral system. It is well done and there are over 20 presentations on the problems of our electoral system, including evidence of fraud, problems with the electoral registry and the like. A lot of the material complements or explains with voice and slides, some of the stuff found in my RR Models section. Unfortunately, it is only in Spanish.

Government sells US$ 1.5 billion in bonds at exchange rates at least twice the official rate

November 13, 2007
According to
the Government spokesmen, including the Minister of Finance, the
parallel foreign exchange market is either irrelevant or non-existent,
depending on whom you talk to. We are told that it is tiny, less than
5% of imports at times. Other times, we are told the Government does
not care what happens to it, because it is irrelevant.

reality says otherwise. When you don’t know whether something has been
purchased with official CADIVI dollars or not, there is room for profit
and when the foreign exchange office CADIVI is slow to approve funds,
importers are forced to go to the swap market, which is quite legal as
the swapping of securities is explicitly excluded from the exchange
control illegalities Bill.

But there is another
reality: The Government has either issued or sold to the market some
US$ 13.5 billion in securities so far this year, in order to keep this
“irrelevant” market down. This does not include the structure notes
sold to the local banks, because little is revealed as to who buys
them, how much and why some and not others. Now, to give you some
perspective US$ 13.5 billion represents 38% of what the foreign
exchange control office has approved so far this year. Of course, the
Government has sold all sorts of instruments, including bonds
denominated in dollars at the official rate of exchange, which are
hybrids and some, very few Bolivar denominated ones. But the dollar
fraction is at least 30% of it, to which you have to add the actual
swap market.

Now, the official rate of exchange
is Bs. 2,150 per US$, but these sales by the Government to help
maintain the parallel rate down are done at a rate above the official
rate and below the parallel swap rate.

the Government announced the allocation of its latest effort to fight
the “phantom” parallel market, a US$ 1.5 billion issue composed of two
Bolivar denominated bonds or Vebonos and a dollar denominated bond,
which matures in 2038 and has a 7% coupon. The bond was named Venezolano I, since it had no Argentinean component like three of the bonds sold in the last twelve months. For the first time ever, the
Government used an auction system, even if it had a slight twist.
Basically people could put in their orders at any price and they would
receive the bond with dollars valued at Bs. 2,150. People will turn
around tomorrow, sell the bonds and effectively they will be buying
dollars at a higher rate than the official one.

How much higher? Well,
the results of the “auction” are such that those that bid over 136% for
the bond will get 100% of the amount requested. At 136, the effective
price for each dollar obtained is roughly Bs. 5,400 per dollar. Thus the
Government is tacitly selling dollars at a rate, which is way over
twice the official rate of exchange. Those requesting between 122 and
125 got 20% and between 125 and 135.99 got 35%. Thus, at the lowest end
of the scale, people paid Bs. 4,500 per US$, still twice as much as the
official rate of exchange. The non-existent parallel market has been
around B. 6,200-6,300 lately.

Thus, the market that does not exist, that “mediatic” instrument
used by the opposition to destabilize, received a healthy dose of
foreign currency by the Government today and there are promises that
the Government will sell into it some US$ 600 million in the remainder
of the year.

Unfortunately, at best, this will
keep the swap market constant, due to the pent up demand, nerves and the high monetary liquidity, in this
virtual and supposedly non-existent market. Just the Government validating prices around the Bs. 5,500 level will set that as the ultimate lower floor for the time being.