Archive for June, 2009

Musings on Venezuela and its analogy to what is going on in Iran

June 21, 2009

Venezuela is living a sort of suspended animation. Only a few months ago, suggesting that there would be no devaluation by July would have seemed nuts, but here we are less than ten days from July 1st. and as I expected, the “official” rate of exchange remains at Bs. 2.15 per US$. The worst part is, that the longer it is held fixed, the bigger the explosion will be in the end.

As Chavez hopes for a recovery of oil prices, the truth is that nothing will save him by now. Oh yes, oil prices are up to US$ 70 per barrel, but the average price of the Venezuelan oil basket, so far this year, is roughly at US$ 50 per barrel, a level impossible for the Venezuelan economy to be sustainable for the remainder of the year.

What is likely to happen, is that the economy will shrink dramatically in the second half of the year and that demand will simply collapse. As importers go to the swap market (even pharmaceutical companies are not getting US$ at Bs. 2.15), prices will jump so much that people will not be able to buy stuff (and will get unhappy!) and even if Chavez does not want you to buy imported diapers, even his factory is likely to find problems to produce his much touted Bolivarian shit absorbers.

And even now, it seems like under ignorant Giordani’s tutelage, Chavez refuses to devalue, setting up the country for an even bigger devaluation later in the year.

But rather than paying attention to these problems, the Government continues on its confrontational road, worrying about survival via politics, rather than trying to patch up this almost unpatchable economy.

And reading the political end of things in the daily news is simply too much. Here is a Government trying (what for?) to look democratic, and the Supreme Court has just validated prior censorship and given the Minister of Infrastructure the power to exercize it. If he does not like and ad or an opinion, he can simply shut down the TV station, radio station or blog for that matter, even if Art. 62 of the Constitution gives everyone the right to say whatever you want. But I guess Chavez is beyond the Constitution by now. He used to show it all the time, the”best Constitution in the world” he used to call it. I guess those were the days even for those that objected his Constitution but believe it is there to be respected by all.

And then I read about the Organic Bill for National Security, which declares (Article 47) all basic industries as “security zones”. Funny, security zones have been out of fashion since 2002-2003, when the Government decided to declare security zones around any place it did not want opposition protests around. So now, all large unions in the country are simply screwed, they can’t protest where they work! It must be that unions are by now controlled by the right wing in Venezuela. Whatever that may be.

The funny thing is that if you think Chavez is left wing, how about Pablo Medina accusing Chavez today of giving the country away to foreign powers! According to this member of the opposition (Yes, somehow, he is supposed to be on my side, even if I have yet to find where I belong!), Chavez gave up our claim to part of Guyana, gave away part of the Orinoco oil belt to Brazil, the island of La Orchila to the Russians and he did not give Colombia the Gulf of Venezuela because people found out about it!

To add to this confusion, today I learn that the President of PDVSA, Mr. “I decide everything”, went to the Prosecutors office to ask that the former President of PDVSA Gustavo Roosen, be charged for giving away the Boscan field without opening up the process for bidding!!!

Jeez, Mr. Ramirez could have fooled me! Isn’t he the one that has rewritten contracts, giving them away, signed a loan guaranteed by the heavy crude in the Orinoco and gave at least a half a dozen areas in that belt to friendly countries, all without consulting with anyone?

It must be that he can’t accuse himself or something like that.

Meanwhile, Chavez keeps saying that he will continue taking away from the oligarchy what they have taken from the “people”, but he says little about what his cohorts are taking away from the people or the oligarchy and creating a new oligarchy, the “Bolibourgeois”.

Because I find it fascinating that while Chavez is nationalizing banks and creating Bolivarian insurance companies, those close to him keep buying banks and insurance companies and paying through the nose for it. Has it occurred to Chavez that these guys may have plans that do not include him? Maybe when he says someone wants to kill him, he is looking in the wrong direction.

Thus, it gets harder and harder to understand Venezuela, so I better follow Iran much closer than I am, after all, it is much simpler to understand what is going on there.

Let me make it a simple analogy to Venezuela. If Iran were Venezuela, what is happening there would be that a Chavista candidate beat a dissident Chavista candidate (while the opposition was not allowed to run) and the dissident candidate does not want to accept the results of the Electoral Board. Almost the same, except there is no opposition, no?


Allen Stanford and others indicted in the US

June 20, 2009

Yesterday, the SEC finally charged Allen Stanford for his role in the supposed Ponzi scheme and he surrundered to the authorities in the afternoon. The SEC also charged others in the case including the financial regulator of Antigua where Stanford Intrenational bank was based.

You can read the full complaint to the Court here.

The SEC named as defendants Allen Stanford, James Davis who was the CFO of the Stanford Group, Laura Pendergest-Holt who was the Chief Investment Office of the Group, Gilberto Lopez and Mark Kuhrt, Chief accountant and global Comptroller for the Group and Leroy King, the Head of Antigua’s financial regulator.

The SEC accuses Stanford of fraud in the sale of the CD’s and the description which was made of their investment philosohpy. He is also accused of using the money from the deposits for his personal use.

Including a foreign regulator in the indictment was quite surprising and unusual. The SEC accuses King of receiving bribes and perks from Stanford in exchange for obstructing the SEC’s investigations and not auditing the books of Stanford International Bank. He is even accused of sending the SEC a letter dictated by Stanford.

The SEC also charges that Stanford’s mutual fund program was fraudulent, with funds picked after the fact to tout the program’s retuns.

It took a few months but the SEC finally went after Stanford who is now in jail, but the proceedings are certain to be long and drawn out with charges and countercharges.

Stay tuned…

The robolution is stealing Venezuela

June 18, 2009

Politically, Chavez has slowly taken away spaces from Venezuelans over the last ten years. One way or the other, institutions have fallen under the control of Chavez and his cronies and even those gained in elections by the opposition are threatened and ripped off by the Government, as roughly half of the Venezuelan population has lost its political rights.

At the same time, the revolution has stolen more and more spaces of the economy by having the Government take over companies, factories and whatever are of influence Hugo Chavez feels should be under the influence of the State.

But there is an even more pernicious take over taking place, that of the limited spaces of the Venezuelan economy where the private sector still plays a role. But this limited and remaining space is slowly being taken over by the robolutionaries, the so called boli-bourgeois, those than have enriched themselves under the shadow of the revolution and now are on a spending spree, buying out, fairly or not, whatever they can get their hands on in order to “clean” their ill-gotten fortunes.

When I began writing posts about the corruption levels going on in the robolution, many, including anti-Chavez people were skeptical of what I was saying. Fortunately, there were cases such as Maletagate, which revealed the lavish spending habits by the nouveau rich of the revolution, as well as the origin of their wealth under the silent shadow of Hugo Chavez and his fanatics.

But if there was silence on some of those cases of corruption, despite the fact that they were blatant and obvious, there is an even more dangerous process taking place: The buyout of ongoing companies by robolutionaries that under no circumstance could possibly justify the origin of the funds used to buy these institutions.

I have mentioned how a number of banks have mysteriously been purchased by unknown people, such as the case of Banco Bolivar, Confederado and Banpro. I have also mentioned the expansion of Bankinvest under the watchful supervision of Jesse Chacon’s brother, who according to this well documented post had no known employment until a few years ago. But today we hear that they also purchased Seguros La Previsora for US$ 185 million and the Chavistas that are irked by the smallest movement of Globovision and its owners, say absolutely nothing. The Comptroller, the same ruffian that disqualified Leopoldo Lopez politically because he used (with approval) money from one part of the budget on another, but found Merentes innocent when he borrowed hundreds of millions of dollars unnecessarily in a year in which Venezuela had a fiscal surplus, somehow says nothing. Mr. Ruffian: Where did these people with no known economic activity find the half a billion dollars spent in acquiring respectable businesses in the last two or three yeras?

And will the Insurance Superintendent approve with the same complacency as the Superintendent of Banks approves that of banks, the purchase of La Previsora?

Strange how regulations were speedily and expediently issued so that any transfer of property of a media outlet, TV or radio, has to be approved by the Government first, but banks and insurance companies are traded like baseball cards with the complicity of the authorities in those fields. In some cases the “new” owners are very obscure, have no banking experience as required by law, or are not even announced.

And one has to wonder if the Maldonado family, the former owner of La Previsora sold because they wanted to sell or they were made an offer “they could not refuse” as in the case of one of those banks that was magically sold after one of its owners was kidnapped a couple of years ago.

In the end, there is a slow take over of the private sector by the new oligarchs. They have more money than the old oligarchy ever dreamed of, which means that in the end they will outlast Chavez and his empty revolutionary project. They will move into the best neighborhoods in the East of Caracas and they will make sure to be ready for the “transition”, whether in two or twenty years, when they will be able to exercise power with their money and become the new elite, albeit one that never worked one day for it.

Thus, the robolution is stealing Venezuelan outright. It is the ultimate arbitrage: Get free money dealing with the Government so that you can buy legitimate businesses than in a few years everybody will have forgotten how you ended up buying them. Hope that Chavez never decides to take you over, but even then you are likely to come out ahead.

And, of course. Stay quiet. Don’t ruffle feathers. Go to Alo president if invited. Don’t meet with active military should anyone think you are conspiring. Just live and let live. Say socialism every time you talk to your employees. Mention your last meeting with Chavez when you meet with your workers. Steal and let steal, while your name and family gain the sudden prominence of the new robolutionaries, which in time will become the new oligarchs.

And there are new commissions to be charged everyday, insuring that the robolution steals Venezuela from the Venezuelans.

When people stand up for their beliefs, hats off to Iranian soccer players!

June 17, 2009

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I know I am obsessing with the whole Iranian thing, but these Iranian soccer players certainly had Major Legaue guts, when they dared wear green wristbands during their game against South Korea yesterday. Iran was disqualified from the World Cup,. The question is, will the Government do something? These guys could be in real trouble, but they did it! Hats off to them!

Venezuela rejects campaign against Iranian institutions

June 16, 2009

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Even as Grand Ayatollah Hossein Ali Montazeri and Ali Khamenei were hedging their bets in the face of massive demonstrations, the Government of the Bolivarian Republic of Venezuela (i.e. Hugo Chavez) congratulated the Iranian people for the extraordinary day (ripoff?) last Friday.

At the same time, the Venezuelan Government (i.e. Huguito) manifested its (his) most firm rejection to the feroucious and unfounded campaign of discredit that from abroad (???) has been unleashed against Iranian institutions. Venezuela denounced this interference in Iranian affairs (by million of Iranians?) and asks for the immediate end to these activities.

Well, it took three days, but it happened in the end according to the expected script. The only thing missing was mention of the Venezuelan opposition as being part of the interference (Sadly, they have not said anything). You have to wonder where the Venezuelan Government thinks the millions of protesters came from and how come the deaths always occur in opposition demonstrations and not in those in favor of ruling President Mahmoud Ahmadinejad (sound familiar?).

But I guess Chavez is seeing himself in that mirror, the crowds are no different than those of April 2002: a majority of women and young people. The big difference is that they don’t seem to stop protesting even when they are shot at. Chavez managed to stop protests in 2002 when he ordered his people to shoot at the demonstrators in April 2002, except he did not count with having to resign. Luckily for him, we had the military making decisions and somehow stupid Carmona ended up on top and Chavez managed to come back.

But using Chavista logic, the millions in Iranian streets are just destabilizers that should be shot at and scared to death until they stay home. Such is the regard this Government has for freedom and human rights.

Maybe Venezuelans will watch what is happening in Iran closely and realize that when your rights are in play, you have to take all possible risks to defend them and next time we will not leave the streets, or the media, or our rights flailing in the wind.

Venezuelan Government blocks private constructions and public elections, just because…

June 15, 2009

Because of the uncertainty, investment in construction has been down for practically all of the ten years that Chavez has been in power in Venezuela. To top it all off, Government housing programs have also suffered of the mismanagement and corruption such that Chavez with his windfall of oil income has been incapable of matching even the achievements in building housing of the Caldera years, when oil income was low and inflation was rampant.

The result is that housing prices have shot through the roof due to scarcity. Try to buy an office or an apartment and prices are really high, they average US$ 2,000 per square meters for housing in Caracas and US$ 3,500  a square meter for office space in the East of Caracas.

With inflation nearing 40%, builders have resorted to selling housing projects with the initial offering price adjusted with inflation, according to the Government’s CPI which clearly underestimates the real CPI through the use of regulated items. This has been a good solution for young couples, as they can not come up with the full amount to move in into a new place and in this way they can contribute to their project and later, when the building is finished they can get a mortgage for the final amount.

In the last year, I have heard more and more people appealing to this mode of financing as the only way for them to have access to their dream home.

But now the Government wants to make sure than fewer homes are built as it forbid this mode of selling and building housing and issued a decree banning the methodology. Even more remarkably, the decree makes it illegal retroactively, something which is simply illegal.

But illegal is for Venezuelans these days just a word in the dictionary. Diosdado Cabello, who was a failure as Governor of Miranda in building practically anything, and the voters punished him for it, suggested that this be approved and Chavez resoundly backed it in his Sunday Alo Presidente program, threatening to “intervene” companies that charge the IPC. It is once more a case, of the Government “ni lava, ni presta la batea” (Does not do the wash, nor does it lend the tray to wash with)

But there is no recourse. If you go to the Courts you will be defeated, witness the recent decision to suspend all elections because the National Assembly is contemplating a new Electoral Bill. This Bill is in the works, but what if it is not approved? Or it is postponed like dozens of Bills regularly are at the committee level?A law is just a project, a Bill, until it is finally approved, no? Do the leaders of other independent powers have “special” knowledge that this Electoral Bill will be approved in speedy fashion? Curious, no?

But for the Electoral Board and even the Supreme Court it does not matter, we can not have elections until the new Bill is in place. Imagine if it is never approved, no more voting, democracy in a state of suspended animation. This does not seem to be the case, but they could do it, which only proves how absurd the whole thing is. In fact, no elections may be better than farcical ones in the end.

It really does not matter, this ceased to be a democracy long ago, I just wished we had half the guts that Iranians seem to have.


The revolution never ceases to amaze…

June 14, 2009

Sometimes, one is amazed at the ability of the revolution to invent new concepts or justify the unjustifiable. This week was no exception and while each of these items may not make a post, all combined provide a glimpse at the empty revolution:

—While President Chavez continues preaching that his Government will be austere even if oil prices go up, reality says otherwise, even acknowledging that in the past his Government wasted too much money. But Chavez says that and we learn that the Venezuelan National Assembly has already approved extra spending of US$ 6 billion over what was approved in the budget for 2008, which included an across the board 6.5% cut with a US% 66 billion budget.

—And how about discrimination in the revolution? According to the President of Caracas’s subway system, the new line 5 of the subway will have two of its stations cut, because “they benefit” the oligarchs”. Now, I could understand this if there was a Country Club station, but one of those cut is the Bello Campo station, which certainly brings the definition of oligarch to a new low level.

Here is a view of Bello Campo from Google maps:


Not only it is at best a lower middle class area, but notice the barrio on the right composed of two barrios, La Cruz and Bello Campo, not precisely oligarchs. It would also be located near the Gustavo Herrera high school a public high school. So, I am not sure Mr. Farias knows much about where the oligarchy lives. Maybe he was just looking for an excuse, like no money. Funny, there is always money for weapons and the like.

(The guy was removed for saying this on June 16th. will the stations be restored?)

—And I guess participatory democracy only works if Chavez agrees with it, because after the neighbors of La Candelaria voted in favor of the Sambil Mall that Chavez wanted to expropriate, the thug himself said last week that the Mall was “not going to be” , because “it was a monster of capitalism”. Chavez acknowledged that HE made that decision, despite the fact that the mall had received all of the required permits from the municipality.

—Which only makes you wonder what will happen if Chavez’ plan to take over land in the Chacao municipality is defeated in today’s vote. The municipality was going to build a Civic Center, but Chavez PSUV party had something else in mind, so the matter was put to vote today. Lines were very long for the vote in favor of using the land of the old Chacao market for a Civic Center which would become part of a new area in Chacao together with the New Chacao Free Market. This market is a new modern building (I don’t particularly like it, but it is a huge improvement over the old). Results are not in, but expect the Center to be approved by a large majority. (early reports are that it passed with 90% of the votes. Correction Monday morning: the Civic Center was approved 20,604 to 140…let’s see what the Government’s excuse is now!)

—And proving once again that he is a Dictator, Chavez warned today newly elected Governor of Tachira State Perez Vivas, that he will end up in Peru like Manuel Rosales. Thus, if you are succesful in an election Chavez will either find something to accuse you of and run you out of the country, or he will take away all of your responsabilities a la Ledezma. Some democracy, no?

Alluh Akbar!: Completely mesmerized by what is going on in Iran

June 13, 2009

I don’t like to comment about what I don’t know much about, but I have to relate to you how mesmerized I have been in the last twelve hours by what is going on in Iran.

First, the use of technology has been truly remarkable to the point that the Government shut off the use of SMS messages before the polls closed as a way of apparently stopping communication among opposition people. However, they seemed to have forgotten twitter, which became the preferred method of communication until it was shutdown a couple of hours ago. Bloggers of course have been doing a wonderful job, I have been reading many, but I think the Huffington Post through this post may be the simplest way to follow things.

There are certainly strange things happening there, from the fact that the opposition candidate was told he had won, to the fact that a large turnout was supposed to benefit him but did not, according to the official results. However, what I find most fascinating is that reportedly the mullahs are calling now for a repeat of the election, remarkably given the almost 2 to 1 margin for Ahmadinejad. And talk about speed, while Chavez took a couple of years to jail Rosales, apparently loser Mousavi is under house arrest one day after polls closed.

Whatever the outcome, it will be a momentous change for Iran. If the protests get nowhere, the Iranian revolution will lose legitimacy, if the protests win, Ahmadinejad and even the Iranian revolution woudl have suffered a huge setback and a more open and freer society may emerge.  This is the most intriguing thing, that Moudavi wanted and campaigned for a more liberal society which energized the electorate. I hope his supporters don’t get squashed and the Government instills fear in them, the way Venezuelans seemed to have been silenced into a corner in the last few years.

Alluh Akbar!

(Note added: Hard to believe it, but this is what pajamasmedia is reporting: Reports are circulating that Venezuela has sent anti-riot troops to Tehran to help Ahmadinejad)

As Government ponders PDVSA bond, S&P downgrades PDVSA

June 12, 2009

For the last six weeks, there have been rumors that PDVSA was ready to issue some US$ 2 billlion in bonds expiring in 2012 and 2014. But then, Chavez announced the nationalization of PDVSA services companies and the country’s and PDVSA’s bonds dropped sharply, postponing the issuing.

Rumors resurfaced as credit conditions improved around the world and local newspapers reported that last weekend Chavez actually approved the bonds and there would be an announcement soon. All of these rumors have helped contain the parallel swap rate, despite the fact that many people, including me, thought this was unnecessary and dangerous. Unnecessary, because if PDVSA needs money, it should be able to issue a local bond that would soak up local liquidity in Bolivars and not a dollar bond, which could turn out to be more expensive down the line. Because what PDVSA needs is Bolivars to pay suppliers and its local expenses, not dollars.

Unnecessary, because these issues have turned out to be only a psychological tool to keep the market down, but once they come to market, it is atomized so much among thousands of local investors, that the companies that need dollars for imports don’t get much and they have to go back to the swap market and push the rate down.

But this was also unnecessary, because I do not believe that international markets can absorb US$ 2 billion of additional PDVSA debt. While world markets have improved, this would create an oversupply which would have the same effect that the US$ 7.5 billion PDVSA 2007 issue had on the whole market for Venezuela’s debt. It brought the whole curve down, punishing down prices for months.

But rumors continued despite the skepticism and press reports that even some Cabinet Ministers were opposed and that the National Assembly did not want it to be a wasted effort.

But the possibility of the bond coming to market was likely short-circuited today when S&P downgraded PDVSA’s ratings from BB- to B+ (BB means the company/country may be facing conditions which may lead to the company having inadequate capacity to meet its obligations, while B means that it is more vulnerable than BB and that adverse conditions will impair the company’s ability to pay).

To make the downgrade more intriguing, S&P downgraded PDVSA, but reiterated its rating of BB- on Venezuela. While I disagree with some of the things said by S&P in its press release, particularly on the differentiation between the country and the company, this really thows a monkey wrench in the Government’s plans to issue bonds.

First, these are the main three reasons cited by S&P for the downgrade:

— PDVSA’s liquidity tightened due to the decline in oil prices at the  end of 2008 and continued tax payments to the government.
— In our opinion, there is heightened uncertainty regarding the  company’s willingness to meet its contractual obligations with some of its  suppliers.
— The negative outlook reflects what we believe to be heightened  uncertainty regarding PDVSA’s liquidity and its willingness to meet its  obligations with suppliers, as well as the negative outlook on Venezuela.

First, some of you may wonder about the timing, but clearly S&P was waiting for the audited financials to come out before it issued its opinion. Thus, while lower oil prices could have been used as an argument, S&P clearly waited for the full numbers which came out last week.

S&P argues that PDVSA’s  financial information is problem, it argues: “its more aggressive financial policy, and the continued delays in  the release of its financial information” . Well, I am not sure the country’s numbers are much better, but S&P gives them more credibility. It also suggests: “The ratings assigned to PDVSA also reflect the inconsistencies observed  in its reported production figures versus those from other sources”

What I can not agree with is S&P’s argument that somehow PDVSA would act independently of the Government and in the words of S&P: “Given our expectation that  the company could prioritize transfers to the government before debt payments  in a distress scenario.”

Sorry, I don’t buy that. In fact, PDVSA owns CITGO in the US, making it more unlikely (in my mind) to decide to pay for its debts than the country.

But S&P’s ratings confirm some of the uncertainty that the publication of its financials has created, as reported in the previous post, as well as the fact that the company is badly run, deciding not to pay suppliers and facing a cash crunch, which is dangerous because in the words of S&P: “We believe that PDVSA’s cash position has  decreased significantly during the last few months and that it has minimal  committed credit facilities available

Thus, the stretching of PDVSA’s resources and the irresponsible way in which it is being mismanaged will now not only make it more expensive to obtain financing, but will interfere with the plans of both PDVSA and the Government.

Remarkably, Ramirez and Chavez continue nationalizing companies and assigning tasks to PDVSA that have nothing to do with its mandate. Chavez even boasted when he was in Brazil that he had plenty of money to continue nationalizing those companies that his Government considered “strategic” to its objectives. Well, maybe he is not being told the truth…

Well, if the goose has no liquidity, and the wild spree of wealth destruction continues, Chavez may find that the money he spent in propping up his popularity with his right hand, may have been wasted by the irresponsible way he has been running the country with his other one.

PDVSA Financials: A Magical Mystery Tour

June 10, 2009

For the last three days I have been staring at PDVSA’s financial statements. There are 161 pages of them. Supposedly audited by the same firm that has been doing that job since a while back. I like stuff like that. It may seem like boring reading to some, but numbers about Venezuela have become like a detective story. You keep tabs on Fonden, so that you can keep tabs on PDVSA, so you can check what the Central Bank says.

But it no longer works.

Assume for the sakes of argument, that PDVSA’s financials are right, audited after all by the local partners of a well known international accounting firm. Let’s say that is written in stone. I believe it. You too.

Then we are in trouble. Real trouble. Because in February the Venezuelan Central Bank (BCV) told us (and I believed them) that PDVSA had paid US$ 36 billion in taxes and royalties.

So, now that PDVSA reports that this number is US 8.3 billion lower at US$ 27.7 billion, who do I believe?

I have no clue.

And I look further…

In one of the many press releases (can’t link to them, but they are all in except that somehow they use non-standard links. But one of them shows us the ever controversial export table.

Let’s assume we are a bunch of stupid radical morons who don’t know how to count oil barrels. Ramirez is right, PDVSA is exporting 3 million plus barrels a day.

Except, that in the line item about the heavy crude operations, the table says PDVSA is exporting 785,000 barrels a day.

Wait! If the Faja only has an installed capacity of 600,000 barrels a day. And if some of the heavy crude upgraders were shut down for maintenance, how can you be producing 185,000 barrels a day more than the maximum, well above the installed capacity?

I have no clue. (Unless they add the crude used to upgrade, but true output is lower, exports are lower, so the table is misleading)

And Hugo Chavez exaggerated (Noooo!) when he said that people said PDVSA is bankrupt. Nobody has said that. PDVSA is not bankrupt, what it “owns” underground is worth a lot more than what it owes. But PDVSA is in trouble.

In trouble, because according to fourth quarter figures not published (derived from what was published) PDVSA lost money in the fourth quarter of 2008. And the average price of the Venezuelan oil basket in the fourth quarter of 2008 was US$ 52.87 per barrel, way above the average price so far in 2009, so we should see losses again in 2009. Not pretty.

Take any line item. Say assets. In June 2008, PDVSA said it had assets of US$ 135.7 billion. Then in December 2008, in the unaudited financials, PDVSA said it had assets of US 144 billion. But then surprise, surprise, assets went down to US$ 131 billion, that’s US$ 13 billion drop. I wonder, I know accounting can be an art, but losing 9% of your assets when you consolidate is certainly strange. What did you double count?

But it gets even worse with liabilities. In the unaudited financials, they reached US$ 144 billion, in the final audited version they are only US$ 106 billion. Incredible, no? That’s a 26% difference. Do these guys have a clue? Or are we being screwed?

Even profits changed drastically.

In December we were told in the “Memoir” that PDVSA made US$ 12.1 billion, but the auditors somehow turned that down to only US$ 9.4 billion.

While Chavez will have you believe PDVSA is one of the strongest companies in the world. Except that, for example, Petrobras made more money. Twenty years ago, Petrobras was a tiny company. And PDVSA was a monster. Petrobras seems to be the monster these days.

It’s sort of downhill from there. PDVSA said that accounts payable was US$ 16.4 billion in December, it is now only 10.8, despite Pdvsa not announcing any major payments.

And you can also dig out that despite record oil revenues in 2008, social contributions went down.  So much for the revolution…

Anyway, I will try to understand it better and if I have anything believable, will post. I seriously doubt I will, I am giving up in understanding these now very obscure subjects.

It is a Magical Mystery Tour