Archive for June, 2010

Venezuela’s rotten “humanitarian” aid to Haiti

June 16, 2010

(We are with Chavez, you better eat the rotten food. Kid: I don’t want to)

When you think you have heard enough, the headline shows that the Dominican Republic sent back a Venezuelan ship with rotten food which Venezuela sent to Haiti as “humanitarian” aid. The ship arrived in Venezuela on June 6th. and has been sitting there with all of its 39 Tons of spoiled food.

Thus, this happened ten days ago and the Government knew about it, but has done nothing about it. Who was the “humanitarian” in Government that decided to do this gesture? Who organized this shipment? Who financed it? Who paid for the ship? Where did the food come from?

Those would be normal (and moral!) questions that in any country with checks and balances and the rule of law, the Government would be asking. This case has corruption, incompetence, misuse of funds and inhumanity all rolled into one. (And I suspect some discrimination too)

Instead we get total silence from Chavez on down. Where is the Comptroller? The Prosecutor? The People’s Defender? (Yes, Haitians should be protected from amoral Venezuelans). If Chavez were against corruption and felt for the people of Haiti and the people of Venezuela he should be calling for the jailing of whatever chain of command did this, whomever it may take down. Instead Chavez defends those responsible for 82,000 Tons of rotten food in Venezuela, calls it a “small” amount, with his total disregard for human life and dignity. And these people are ripping off Venezuela right and left.It’s all about corruption in the end.

Every time I think I have heard enough bizarre stories in Chavez-land, the incredible ability of the “robolution” surprises me once again.

It also shames me.

Hugo in the Sky with Diamonds

June 16, 2010

Banco Federal intervened, obviously political, long overdue

June 15, 2010

So, Banco Federal was intervened yesterday, years late, politically timely. Just think, the Government via the Depositors Guarantee Fund now owns 20% of its media nemesis Globovision.

But I am getting ahead of myself.

Banco Federal had been in trouble for a long time, anyone that can read a balance sheet knew that. It participated eagerly in the “structured note” fiasco, had to cover some of the losses (US$ 60 million if I recall correctly) but in the end accounting smoke and mirrors was insufficient.

With the intervention of the banks of the “bolibourgeois” last November and December, rumors spread about Federal, fueled by none other than Hugo Chavez, who mentioned repeatedly on nationwide TV the name of the owner of the bank, saying he would have not trouble intervening his bank if necessary.

But he did have a problem with doing just that. The clumsy initial steps in the intervention of  a dozen or so banks, led to rumors about Federal being in trouble and the Government began to worry about the whole system shaking, if it acted too rashly. Thus, a decision was made to postpone the inevitable, until things “improved”. But things never improved much. In fact, Banco Federal stopped publishing its monthly financials in the newspapers, let alone its 2009 financials, which were never published, as the law mandates. Enough to make you want to stay as far away from the bank as possible. The bank had a lot of illiquid investments in its balance sheets that most specialists know what it means: I am hiding huge losses in those investments, hoping there will be a brighter day.

But the brighter day never came. The Government reportedly even gave Federal money to prop it up, but it was a lost cause. It was just a matter of having the excuse to do it. Intervening it was long overdue.

The Government pressured Globovision and its main owner Guillermo Zuloaga and Ravell was let go, Zuloaga was threatened with the charge of hoarding cars and later of accusing Chavez of murdering people. The second charge was harder to prove, thus they went bank to the hoarding.

But Globovision never changed its editorial line. Thus, the next to the last step was taken: Take over Mezerhane’s bank, which owned 20% of Globovision, and they did.

If this does not do it, then the TV station itself will be next, but maybe the owners can now be persuaded that the Dictator means business, they did not seem to understand it before.

Globovision is the only TV media outlet whose outpost is not sanitized and sterilized prior to broadcasting. There can be dozens of protests in Venezuela in any given day and only Globovision shows it, the normalcy in the rest of the media is somewhat scary.Orwell would have been proud of Venevision and the rest.

Thus, the next to last political decision has now been made: Seize Banco Federal. Will Chavez dare to take the next step in the sequence before the September elections? Will he go first for the banks? For the food division of Polar? Or for Globovision?

All three would be the magical trifecta for the Dictator, but can he afford to do it?

Guidelines for BCV exchange market published

June 14, 2010

“Only” four days after the BCV foreign exchange began operating, the Central Bank published, not the regulations, but the “guidelines” for its operation.

What does this mean? A regulation fixes things and how they can be done, a guideline is a suggestion, an orientation. But I doubt you can ask to buy one dollar more than the “guidelines” sugeest.

It’s just revolutionary flexiblity, it may come in handy at some point (For them)

So, without much furrther ado, here is the final version of the “guidelines”:

-It only applies to Venezuelan companies or Venezuelan citizens, not to residents or foreign companies that operate here through a subsidiary for example.

-Companies will be able to buy up to US$50,000 per day and  no more than US$ 350,000 a month (cash value, not bond value), as long as: i) you are not in Lists 1 and 2 or ii) if you are in Lisst 1 and 2, that you have not received any money from CADIVI for the last 90 days and iii) To buy capital equipment.

-Individuals will be able to ask for US$ 1,000 a month and up to $ 6,000 a year in order to send to family members abroad.

-Individuals will be able to buy US$ 5,000 a year for: i) Studies abroad, ii) Travel abroad and iii) To pay for goods required to provide professional services.

-Up to $10,00 for special cases of health, cultural and sports nature.

That’s it, on your marks, set, go…place your order,  soon…

Central Bank foreign exchange market, Cadivi 2.0, begins functioning even before it is regulated

June 13, 2010

(BCV band system. Another devaluation!!!)

The new foreign exchange system went into “operation” on Wednesday, despite the fact that the regulations have yet to be issued, people have just seen some drafts for them, but this did not stop the Government from opening that “market” in order to stop the criticism that it was being delayed. Even today regulations have yet to be seen.

The draft of the regulations says that companies will only be able to ask for US$ 300,000 a month, but no more than US$5 50,000 a day, something many big manufacturers will laugh at. El Nacional said today that this amount would be raised to a million dollars, still insufficient, but definitely an improvement for medium size industries.

However, there are other limitations for this. A company will only be able to participate in this market if it does not qualify for the so called “Lists 1 and 2” of items that CADIVI has. If your product or raw material is in any of those lists, you will only be able to participate in that market if it has been 90 days since the last CADIVI approval.

Individuals will be able to buy up to $1,000 a month to send to relatives abroad and buy up to $5,000 a year for educational expenses or for travel expenses abroad.. Individuals may also request up to $10,000 a year for health, education, sports and cultural reasons, whatever this may mean.

The Government claims that trading was done in the amount of US$ 17 million or so the first day at the upper side of the range at Bs. 5.3 per US$ , who knows who participated in that market. One has to wonder how this could all work without regulations, how did those participating decide how much they could ask for if regulations did not exist?

Get your quota as soon as you can, it will never be cheaper than this. Ever.

Clearly, the whole system is CADIVI version 2.0, another restricted, difficult way to have access to foreign currency. Companies and individuals will learn in time how to use it, but it will be inefficient in providing fluidity to manufacturing and commerce in Venezuela. The now banned swap market provided such fluidity as anyone could buy even large amounts if the operation required it. This will no longer be the case.

Thus, another level of improvisation and control by this incapable and inefficient Government has been reached. This will result in shortages, inflation and lower economic activity, but Chavez himself says these are capitalistic concepts that are irrelevant in a socialist economy.

I wonder if the “people” agree with him when all sorts of things are missing from every day life.

Of course, it will never be the fault of the Government and Chavez’ cronies, there will always be someone else to blame. They are all doing a wonderful job with 30%+ inflation, -5%+ GDP contraction and wasting 10% of the food the Government imports. Who says they are not incredibly incompetent and that their XXIst. Century Socialism model is not a gigantic failure?

When will they notice it? When they can no longer steal enough?

Prosecutor follows Chavez’ command, orders Globovision owner jailed

June 12, 2010

(To those that complain, I remind them that there is Justice here)

A few days ago, Hugo Chavez said in no uncertain terms:

“Guillermo Zuloaga (The President of TV station Globovision) said that I ordered the killing of people and he is still free. This only happens in this country…This should not stay this way…I will not sue against a bourgeois, but there is a system that should put things in their place.”

Never mind that Zuloaga was referring to a true fact, when Chavez tried to unleash Plan Avila against a peaceful march in April 2002, which has been ratified by the Generals that refused to accept that order. Plan Avila was the same plan activated in 1989 by Carlos Andres Perez, a military plan sharply criticized by international organizations as repressive and designed to violate human rights. The activation of the plan in 1989 led to over 200 people being killed. There were over 20 killed and almost 200 injured on that day even if the Chavez’ order was never followed.

Never mind that Zuloaga made the statement outside of Venezuela, where Venezuelan law does not apply. He was investigated and freed on those charges after the Prosecutor barred him from leaving the country in early April.

So, yesterday, the ineffable Prosecutor Luisa Ortega revives charges against Zuloaga and his son for usury and “conspiracy” in the case of a car distributor that Zuloaga is part owner of and in which the Government accused him of “hoarding” the cars because they were being held in the parking lot of a house owned by Zuloaga.

Thus, the Prosecutor, a figure supposed to be independent, but who nobody believes is by now, orders Zuloaga captured, with which Globovision is left with no visible head after Alberto Federico Ravell was let go under pressure by the Government, closing in this way another chapter of censorship and limitation of the right to free speech.

Chavez should be obviously very pleased and Oswaldo Alvarez Paz quite worried, as Chavez made a similar request against him a few days ago.

Another chapter in the consolidation of this Dictatorship, which persecutes anyone that opposes it at its convenience, from butchers to the media.

Who will be next? Well, my bet is that when the new foreign exchange “market” fails in a couple of months and shortages become widespread, the banking system and the food division of Polar will be nationalized for blocking the path of the revolution.

And the stupid cheerleaders of the robolution will celebrate the continued destruction of Venezuela by this band of ignorant and resentful revolutionaries who still have no clue as to dimension of the destruction taking place.

How many cars can you build on 300,000 dollars a month?

June 9, 2010

Little to say, the band system is from Bs. 4.2 to Bs. 5.4 per dollar. Banks reportedly will sell 40 milln $ a day. Limits will be $5,000 per year per person, $300,000 per month for each company.

You can bet all orders will be done at Bs. 5.4…and most Venezuelans will ask fir the 5k yearly at these prices. You don’t even have to travel to get it! This seems unsustainable.

The bigger question is how many cars can you build with 300,000 dollars a month?

Or paper bags?

Or elevators?

Or cell phones?

The cynical words of the brainless defenders of the Venezuelan Bolivarian robolution

June 8, 2010

(We have very violent neighbors)

Heard around the inconsistent and cynical revolution:

Francisco Arias Cardenas (Vice-Minister for Latin-America and the Caribbean): “I reject coup d’etats to overthrow Constitutional Governments”

Well said Pancho, but can you explain to us why you led a coup against a Constitutionally elected Government in 1992? What made that justified?

Roy Chaderton(Venezuelan Ambassador to the OAS): “Venezuela rejects an arms race, militarism and war”

Well said Roy, but can you explain why Venezuela has been on a spending spree buying weapons? Or why it is that this is the most militaristic Government in the country’ modern history, presided by a guy who likes to dress up at any excuse with full military garb and weapons? Or threaten us, Venezuelans who oppose him with violence and weapons at every turn? Or how about the fact that your leader is the only Latin-American leader to threaten war or intervention in Latin America since he got elected? Roy, has your mind been stumped so badly or you just don’t want to come back and live here anymore?

Aristobulo Isturiz, former everything, including being simpatico: “The revolution is saving the country?

Jeez, Aristobulo, where should I start? From cynics like you? No

From crime? No.

From corruption? No

From the whims of Chavez? No

From Dictatorship? No

From the robolution? No

From destroying production? No

From Incompetence? No

From Ignorance? No

From selling the country? No

Ari? Should I continue or have you had enough?

Wait! Wait! From our food going putrid, because the Government just does not care? No

Carlos Escarra, Deputy of National Assembly (PSUV): “We will continue investigating the rotten food”

Carlos, Carlos, don’t exaggerate, Chavez already has exonerated Ramirez, who is in charge and you will never dare touch him unless Hugo says go ahead. Pulido may be charged, but it will not go beyond that, look at the attitude of the Presidentica of PDVAL already:

“There is a dirty war against PDVAL”

No Carlos, there is no dirty war against PDVAL, there is a putrid leadership, putrid food, putrid attitude, putrid Deputies, putrid Justice system, putrid management, putrid acceptance of a Dictatorship and a putrid revolution at heart who cares little about Venezuelans and lots about the Dictator from Sabaneta. Your brain, like Roy’s must have a short circuit or an illness, you were once considered intelligence and smart. But you lost it all, including the respect of your friends and family.

“Rules” for the new Foreign Exchange System at the Venezuelan Central Bank, or are they?

June 7, 2010

Today’s headlines said something like: “Rules for new foreign exchange market published”. Everyone gets excited, as El Nacional says the Minister of Finance wants the new exchange rate capped at Bs. 6 per US$. However, no such rules were published.

What was published was Foreign Exchange Agreement #18 (Yes, 18 times the relationship between the Central Bank and the Government has been changed on foreign exchange markets) and the regulations, but you will find little telling you how to do it, what you can do, when you can do it or where you can do it, which is what people want to know.

But rules? Nothing of the sort, some general principles that will guide the new exchange market mechanism, but if you wanted to read them to see how you go about getting cheap dollars (Venezuela’s most important export!), you are out of luck.

Because the “rules” defined by the 18th. Foreign Exchange agreement and the associated regulations are:

–Only banks, savings banks and exchange houses will be able to participate in the market to sell and buy bonds via the Venezuelan Central Bank.

-They will charge a commission which will have to be published.

-Exchange houses will only be able to deal with cash of Colombian Pesos or Brazilian Reals.

-Banks can send money transfers

-Banks will have to provide all information requested from them by the Central Bank.

-You can only trade bonds issued by the Republic and related entities via the Central Bank and only banks and similar financial institutions can do it (You knew that!)

-The Central Bank will say which bonds can be used.

-If you don’t comply with any of the above you will be punished and you can be inspected by the Central Bank, as often, as necessary and as in detail as the Central Bank desires.

There you have it. You have read my post, but learned absolutely nothing about how to to get a dollar out of the Central Bank. You know you will have to go to a bank, that’s about it!

Thus, the market that was going to start last week. (Chavez said it will be hours or days before it starts, well it maybe a group of days, called a week). My bet is, this will not start this week either, so that Venezuela would have saved one month of imports, which maybe Minister Giordani believes means that the money will be saved and people can go hungry, diaper-less, cellphone-less, or whatever for a full month without any significant impact.

Jeez, I wish , I would charge a dollar for each person that reads a post…I would get more foreign currency that way that I am likely to get out of the new system…even if it is at Bs. 6 per $, ta’ barato dame dos (It’s cheap, gimme two*)

*Famous phrase from the 70’s when Venezuelans would go to Aruba, Miami and Curacao and when told the price would answer that way)

If the 60,000 Tons of rotten food is so little, how come there is hunger and malnutrition in Venezuela?

June 6, 2010

(The putrid leaders are still alive and well…)

I like numbers. I was educated to believe that anything and everything can be understood if you can reduce it to numbers. Thus, I decided to look at the numbers of the foodstuffs found in a state of putrefaction and ask a very simple question: is this irrelevant in the size of imports to Venezuela or is this a significant amount?

According to Chavez, this is 1% of what the Government imports in food. This means that if we assume that the Government imports these days half of the food and the private sector the other half, then the 60,000 Tons (70,000 Tons according to other sources) represent 0.5% of all imported food. Of course, Venezuela also produces some food. Let’s say it’s not too much. Assume 70% of all food we eat is imported, then the rotten food is 0.35% of all the food Venezuelans eat every year. The Minister for Feeding dismissed the importance of this amount of food rotting, as did President Chavez.

Well, 60,000 Metric Tons is 60 million kilos or 2.3 Kilos per inhabitant of Venezuela. If this is 0.35% of all food consumed in Venezuela then Venezuelans eat 657 Kilos of food per year. In pounds, this is about 1,440 pounds per person per year.

According to various calculations I have seen, world food consumption varies from about 500 pounds per year per person to 1,700 pounds per year per person in the US. The 1,440 pounds then would put Venezuelans among the best fed people in the world.(Recall I underestimated, there are reportedly 70,000 Tons so far, there may be more and I exaggerated the estimate for imports)

Which suggests the ever present shortages of food in the stores, hunger, malnutrition and poverty are a thing of the past in our country.

But are they?