The Devil's Excrement

Tonight’s third game of the Magallanes Caracas series became a hot bed for protests, from Chavez Tas Ponchao (Chavez you’ve struck out!) to these people with red muzzles with the RCTV T-shirts. Funny how Venevision barely showed the protest while sports TV station Meridiano showed all the posters and people protesting. Marcel Granier of RCTV today publicly accused Gustavo Cisneros, owner of Venevision, to be in cahoots with Chavez.

Hope the series goes the seven games. Additionally the Caribbean Series will take place in Margarita Island and I hope the protests extends there

In Corpoelec’s report from late December on the electricity crisis, the first aid to the crisis was supposed to come in February when Planta Centro was supposed to come back online and contribute at least 400 MW to the power grid.  However, today’s El Nacional says that it just will not be ready.

According to a Professor from Simon Bolivar University, the upgrade of the plant is way behind schedule. He says that if Planta Centro alone were up and running with its full 2,000 MW there would not be an electricity crisis.

The overhaul of Unit #1 began seven years ago and are not ready yet, while the original fist phase of Planta Centro from scratch took the same seven years when the plant was built originally in 1978 in the bad old days of the fourth Republic, which is looking better and better everyday.

Planta Centro has 5 unit and are all currently down according to a report from the interconnected system. So, don’t expect any help from this even if Minister Ali Rodriguez chose Planta Centro as his first site visit as Minister of Electricity.

So, the strange story of the CD’s continues. Below the history of the swap exchange rate since the Central Bank announced the so called “auctions” in which Central Bank CD’s are sold at a fixed price. As you can see the red line (right axis) shows the price of the swap rate for buying dollars since the announcement of the CD auctions. Remarkably, the only impact so far of the sale of the CD’s has been psychological, much like when the Government sells bonds for Bs. The swap rate went down from Bs. 6.4 to the $, down to Bs. 6.1 the day of the first auction (before anyone knew if they had given you anything (the results were announced the next day). At that auction, the Government sold US$ 50 million at Bs. 5 per dollar and the maximum amount allocated was US$ 60,000 shown on the left scale of the graph in blue.

At the second auction, the Government gave up to US$ 50,000 per order, also at Bs. 5 per $ and a total of US$ 50 million.

Once people realized the small amounts allocated and that the auctions will not be daily, the swap rate went to Bs. 6.1 per $. In the third auction, the Government lowered (??) the price of the dollars to Bs. 4.8, increasing the arbitrage between the swap rate and the CD’s, but it sold only US$ 40 million. By then the maximum allocation was $15,000.

And no sooner had Deputy Iroshima Bravo said that these auctions were transparent and organized in such a way that the public would benefit by limiting how much corporations obtained, the Central Bank held the fourth auction, also at the lower price of Bs. 4.8 per $) in which orders were given up to $24,000 maximum, but all individuals were excluded, only corporations had their orders filled according to the Central Bank. (I think this tweak is correct, but $24,000 does little to big buyers)

Thus, after four auctions and US$ 180 million, the swap rate is back up, the Government is selling fewer dollars and making them cheaper, increasing the arbitrage. Furthermore, the distance between Chavez’ “revaluated” target of Bs. 4.3 per $ and the swap rate remains 41.8% above the official rate.

Go Figure!

If anyone understands the BCV’s  strategy, please explain…

In an act of revenge, censorship and just sheer personal vendetta, the Venezuelan Government shut down the cable signal of RCTV tonight, because the broadcasting company refused to carry Chavez’ “cadenas”, which force all TV stations to carry Chavez’ speeches whenever he so desires. (Today, he forced a few minutes of “cadena” while holding a rally for his party PSUV in Caracas, in a clear illegal act of abuse of power and Government resources)

Recall that RCTV had been shut down as a local broadcaster and its equipment confiscated in 2007, when Chavez “decided” he had to shut down the TV station locally. Its equimpent and property has yet to be returned to its rightful owners, while another Government media outlet uses it in its programming (Even if very few people watch it!)

A couple of months ago the Government issued a decree taylor made for RCTV International which managed to keep afloat via cable TV and satellite TV. According to this decree, if 70% or more of the programming was made in Venezuela, the cable system and satellite system would have to carry Chavez’ speeches.

As I arrived back at home tonight at midnight, I was surprised to hear a loud pot banging in my nighborhood as I entered my home, RCTV’s signal had been shutdown at midnight and Twitter was very active talking about the news (#freemediave).

Another day of abuse of power, censorship and resentment by Chavez and his cronies. Another day in which the rights of Venezuelans have been trampled upon.

And some still dare call this a democracy.