Archive for January 18th, 2010

Three more banks intervened and shut down, everything is normal in Venezuela

January 18, 2010

Tonight the Superintendent of Banks announced the intervention and shut down of three more banks in Venezuela: Inverunion, Mi Casa and the development bank Banco Del Sol. The first two were associated with Chavista boliburgueses, while I suspect the third one was too, but can to swear that was the case. Inverunion was bought by Gonzalo Tirado, former President and chief strategist of Stanford Bank in Venezuela and Jose Zambrano, another infamous friend of the robolution.

While they are small, they add up to the crisis and FOGADE that is supposed to protect depositors will have to provide the funds for this. Since there are none, the Government will have to contribute, more money printing, more inflation, another failure of the revolution and more banks to come.

Even revolutionary movements like the Carapaicas are somewhat pissed at the “robolution” so Chavez better watch out, there are some baseball games coming up and “You’ve struck out” has hit a chord in Venezuela. How many such banners will show up at the baseball finals?

Since I am home and going on a very personal trip tomorrow, I can’t look up at my database to see what deposits were like at these three institutions. You can bet Mi Casa is not as small as you think it is. However, I do know the Government “plans” to solve part of this crisis by increasing the contribution from banks to FOGADE from 0.5% of deposits to 3% of deposits. Many banks in Venezuela don’t even make 3% of their deposits in profits, so you can bet this is another problem in the works. For those that are subscribed, I recommend Francisco Faracos’ interview in today’s El Nacional, one of the most lucid descriptions I have seen recently on the state of disarray of the Venezuelan economy. God helps us!

And by the way, recall I was accused of being scandalous when this financial crisis began. Well, three more added to the list and still counting, another triumph in management and supervision by the robolution. And Chavez helping the panic at each step of the way!

And these were the friendly guys to the silly Chavista process!