Archive for April, 2011

Exposing Hugo Chavez’ Lies: No Gain But Loss In The Minimum Salary

April 26, 2011

While this will make little difference, using BCV statistics, Hugo Chavez’ lies are simply exposed. Below, I show a plot a graph of inflation (Blue Line) normalized to when Hugo Chavez took over in 1999 and I compare it to the minimum salary, also normalized,  at exactly the same time (red line):

In fact, despite the oil windfall, accumulated inflation has been higher than the growth in the minimun salary, which does not even take into account how the inflation numbers are being manipulated. In the boom days of 2008, salaries managed to stay ahead, but right now, there is no “redistribution”, no gain by the average Venezuelan via the minimum salary, despite Chavez outrageous, unethical and lying claims today.

Of course, few people will see this graph, compared to Chavez’ big lie on nationwide TV (previous post). What a farce!

Hugo, you big liar!

How many lies can you catch in this Chavez speech on the minimum salary?

April 26, 2011

Amazing video in which Chavez shows how he has incrased minimum salary without adjusting for inflation. Salary has not kept up with inflation. He even shows it from way before he became President to insure he will look even better.

He says he is distributing things better.

He then proceeds to say that there were more resources before he got to power. Never mind oil from $12 to $100.

Then the usual BS about oligarchy, the gringoes, etc.

Then he talks about how wonderful things are with his pension increases and salary increases and how bad things are abroad.

Just lie, after lie. Count them!

Chavez’ Extra Pocket Money From New Decree

April 25, 2011

In the previous post, I said that the new decree issued by the Government would give Chavez about US$ 11 billion in extra pocket money, but I failed to take into account the fact that he was already harvesting some of the money, since there was a previous decree that gave Fonden 50% of all the revenues above $70 per barrel when oil is below $100, plus 60% of the amount in excess of $100, when oil goes above $100.

Below a graph:

in which I show on the left the difference between the old “tax” (Red Line) and the new “tax” (purple line), with scale on the left. These are dollars for each barrel of oil that go directly to Fonden.

Using the scale on the right, the green line then shows the extra revenues the Government will receive from this new “tax”, assuming exports of 1.6 million barrels of oil a day, where I mean the new extra money, not what the Government was receiving before. Thus, around US$ 105 per barrel it is about half a billion US$, half of what I had calculated. If oil goes to $150, it will be almost US$ 23 billion.

I also note that according to Carlos Vecchio, the new decree does not follow the Enabling Bill and violates the Constitution. Chavez would have had to create specific fund in order for this to be legal.

Hugo Chavez Issues Illegal Decree To Increase Discretionary Funds

April 22, 2011

Taking advantage that the whole country was on vacation on Thursday, Hugo Chavez piled one illegality over the other to issue a decree to increase the availability of discretionary funds for his spending. The illegal decree creates a special contribution by PDVSA which will go directly to the development fund, whenever oil prices are very high like they are now.

According to the decree,when oil prices are above US$ 70 per barrel, but less than US$ 90, 80% of that difference will go directly to the fund. If prices are between US$ 90 and US$ 100, this will be 90% and if prices are, like they are today, above US$ 100, 95% of the excess will go directly to the Development Fund. This fund is a discretionary fund which is managed with little or no transparency according to the President’s whims and wishes.

The decree is doubly illegal, since it is based on the illegal Enabling Bill granted Chavez in the dying hours of the old National Assembly, which gave the President the power to legislate beyond the term of the Deputies that approved and in violation of the legal mandate the people had given the new Deputies of the National Assembly in September. Chavez would not have had the required 2/3 majority in the new Assembly to obtain these powers.

But to add one illegality on top of the other, the Enabling Powers were given to Chavez to deal with the housing emergency, thus, creating this special contribution to a general fund which is managed with little transparency can not be legal even if the Enabling Bill were legal. But Hugo never cared for such details before.The only way the decree would be legal would be if the funds went directly to deal with the housing crisis, which will not be the case under its structure.

According to Chavez this decree insures that more of the money goes “directly to the people”, but in reality they go more directly to him and his ability to use funds without control, supervision and under his total discretion. Chavez called oil prices exorbitant, which is somewhat ironic given that he has always said that US$ 100 was the fair price for a barrel of oil,

The decree will add to the lack of transparency in the country’s numbers. The current mystery is why international reserves have dropped in 2011 with oil prices increasing significantly when compared to last year. Outflows via the foreign exchange control office CADIVI have increased only marginally, suggesting that PDVSA is either paying supliers, not handing over as much foreign currency to the Venezuelan Central Bank or giving it directly to the development fund Fonden. Such lack of transparency is a partial explanation for the country and PDVSA’s bonds enjoying such a risk premium, as Hugo Chavez continues to manage the country’s finances at will and without much control from other institutions.

Venezuela and Venezuelans lose in the end, as this misdirects funds and keeps straining PDVSA’s cash flow. If you believe oil exports are at 1.6 million barrels a day and assume oil prices will average from here till the end of the year $105 per barrel, this will give the development fund some US$ 11.5 billion for Hugo to spend at will.

How The Hell is the Devil Doing?

April 19, 2011

Well, fine thank you.

Enough of you have you asked that I feel I have to make a post. Other titles:

Hey, Devil, what are you doing?


What the Hell Is the Devil Doing?

Well, the Devil is doing ok. Ok, because moving is indeed Hell, the last three times I moved I said I would never move again. I swear by this now, until next time…Never say never.

Life is good, quiet, simple, lots of time for reading, but rather than reading “stuff” I am reading “junk”, lots of books in my Kindle/iPad combination, but I read mostly instantpulp. Kidding aside, I make a disclaimer, the author has an interest in that trashy website, but it’s not my business plans and it works!

Oh yeah! Lost some weight.

No regrets. I always look forward, I chose to be here and so I am , looking ahead. I gets lots of Venezuela news, gossip and the like, but somehow it gets harder, the news more irrelevant in the distance.

It’s Easter week, so Venezuelans are off on holiday and you even see them here. They come with their CADIVI dollars and you recognize them by their shopping carts full of diapers and sanitary napkins. I saw a couple today and felt like walking up to them, hugging them and saying: ” Hola, yo tambien soy venezolano!”

But even if everyone says I am outgoing I am in the end shy. So I said nothing.

But I do miss queso de mano. You can fake arepas, but it’s hard to fake a good queso de mano.

You want to know how bad this Government is doing?

Look at this press conference by Comandante Fausto :”Corpoelece will do maintenance during Holy Week”

Jesus, when you have to announce you are doing maintenance, things must really be bad. You would think a Minister would have better things to do than announcing normality. Except that maintenance is not normal here (or is it there?), ask the Metro (Subway) people, they forgot about it and it shows.

Meanwhie Aristobulo Isturiz seems to have lost any shame, if he ever had any, or smoked his bosses egg roll, using hyperbole at any turn, like saying April 2002 was as big as the 19th. of April or the Government will build 150,000 housing units. Sure Aritobulo, go smoke your lumpia (egg roll), because you are so far behind already and it just begun raining, so you will have go build them all in six months. But you like Ramos Allup, should just retire to a “Mansion”, for those politicians that will never get elected on their own, so stop trying, you are making a fool of yourself.

Meanwhile Venezuela is off for the week. You can’t find an airline ticket to go abroad, as CADIVI “cupos” are all being used and who can pass up $2,000 or $3,000 per person at Bs. 4.3 per $, including kids to go to Bogota, Miami and/or Buenos Aires. It is simply irresistible, like cheap gas.

And I take advantage of it to say last night I saw Atlas Shrugged Part I, the movie, enjoyed it, everyone should see it, even if there were some things that seemed out of place. I wonder what a Chavista would think about it, maybe he would not even get the subtitles. Or think it’s fiction.

In  solidarity with all of them, the Devil will not stay put either and tomorrow will go to another catholic, lazy country, where he at least expects good service, as he basks under the sun and catches up with his real reading.

Thanks for caring, thanks for asking!

Video: Chavez Admitting He Told Lucas Rincon He Would Resign In April 2002

April 16, 2011

This little known video from April 15th. 2002 shows how much the truth was distorted. In it Chavez says he told Lucas Rincon “I have accepted abandoning the position(of President) if conditions are met…”

So, he was resigning, the conditions were met, nobody was harmed or hurt…

Changing history is Chavez’ main expertise…

Inadequate Management Everywhere Under Chavismo

April 15, 2011

Imagine you owned a bank or were a shareholder of it or had deposits in it and the Federal Reserve Bank said of your bank:

“Your Bank and its Agencies have to cease and desist from its unsafe and unsound banking practices in the United States, including, among other practices, operating for an extended period with negative or insufficient capital, failing to have adequate management at the Agencies, failing to exercise adequate risk management at the Agencies, and failing to adequately oversee the Agencies”

Doesn’t that sound like the bank from Hell?

On top of that, the Federal Reserve gieve,s you a fine of US$ 1.8 million dollars as established by law and further orders that Your Bank not accept any deposits or give out any loans until you fix all of the above.

Moreover, the Federal Reserve gives Your Bank 180 day to provide audited financial statements by a reputable international firm.

What would you think? How would you feel?

Well, this is exactly what happened today to the US branch of Banco Industrial de Venezuela, the Government-owned and run bank that has gone bankrupt twice during the Chavez administration and was intervened by its owner, the Government, in 2008.

Funny, those that did this, friends of the robolution, are not in jail.

Chavista management at its best?

Nice, no?

Date For Primaries Is Feb. 12th. 2012: Tell Me Why It’s Good, Tell Me Why It’s Bad

April 14, 2011

(Have we ever won an election with the current political system?…No… Then, Why do we want to change it?)

So, the LODO (Los Organizados Democratas de Oposicion), otherwise known as the MUD, have chosen a magic date for the primaries, February 12, 2012, or 02-12-2012, which is not the day the world will end as some claim, that happens to be 12-21-2012, a full ten months later.

Given the very limited experience in Venezuela with primaries to select a candidate, I am surprised at the vehemence of some of the arguments.

The main argument I have heard is that this is not enough time to project a candidate against Chavez. Well, let me remind my readers that in the best known primary in my history, that of Oswaldo Alvarez Paz as candidate of COPEI, which took place on April 25th. 1993, the candidate was selected seven months before the election and proceeded to deflate itself in less than two months. (Even though the primary was made to select the candidate for COPEI, that party allowed anyone in the Electoral Registry to vote)

Then, there is the AD primary to select between Luis Beltran Prieto Figueroa and Gonzalo Barrios the candidate for President. This one took place on September 25th. 1967, less than three months before the election. Prieto Figueroa surprised his party, winning 65% of the vote and 75% of the party’s “Seccionales”. The party decided Prieto was too far left to become President and divided in two. In less than three months Prieto went from front-runner to obtaining less than 20% of the vote in fourth place, with Barrios losing narrowly to Caldera 29.1 to 28.2%. Just think all that happened in that brief period of time.

In 1978, Luis Piñerúa Ordaz defeated Jaime Lusinchi in a primary held mid-year, only six months before the election (more or less, can’t pinpoint date), in the last primary held by Accion Democratica. He lost the election, despite having the full resources of Carlos Andrez Perez’ Government.

So, these primaries held much closer to the Presidential Election date than the proposed date by the LODO, proved to be quite dynamic and curiously, in all cases, the winner lost in the end, despite being ahead at the time of the primary.

So, it is not clear to me that this is “too late” or does not give the winner “enough time”, on the contrary, it seems that it gives the candidate too much time to blow up his candidacy, make mistakes or whatever. He or she may simply “peak” too early. Ask Irene Saez, front runner extrordinaire in the 1998 elections two years before they took place. As Chavez rose (He was not in the top three in May, by September he was leading), she dropped like a stone and various parties, including Causa R and COPEI simply withdrew their support. She got less than 3% of the vote.

Talk about peaking too early.

But in the end, primaries are supposed to give voters a choice, but also are supposed to give candidates a chance. A chance to show who they are, to get well known, to appear in events, project their image. Within that democratic idea or ideal, what matters is the exposure to the candidates in the primary, not that of the eventual winner. So, this would suggest the later the better.

Given all that, my feeling is that 02-12-2012, may actually be too early, not too late…

What do you think? Is this date good, or bad? Tell me why!

Keiko, Ollanta, Boxing, Primaries, Subway, Lobo and Arias Cardenas…Just Boooring

April 12, 2011

Lately, I have been having a hard time writing. It’s not writer’s block, but simply that the parade of topics is just..either boring or simply I am at a loss to have an opinion other than: Say whaaat?

Take Ollanta versus Keiko, to me it sounds like a late night boxing match on HBO between a Latin American and a Japanese, both feather weights. But what can I really add to this choice by Peruvians? Yeah, make sure the guy who led to the current prosperity by laying the ground work to sound economic policies is properly punished and gets the least number of votes in fourth place.

Caldera used to say: “El pueblo no se equivoca”. Even on that Rafael was totally wrong.

But hey, it’s democracy and “the people” can choose what knife their neck will be cut with. Ollanta may bring some Hugoesque nuttiness to ruin his country, while Keiko apparently appeals to a segment of the population that longs for her father’s autocratic streaks.

Sorry Peru, call when you are a mess. We can then talk about it.

And I can’t get excited about when the MUD (Lodo on Spanish) should, may, would, might hold its primaries. My favorite is the day when in the Zamora Province of Spain grapes used to be picked, but my arguments may sound as frivolous as theirs. Maybe they should ask Luis Vicente Leon what to do, so we can finally establish a record that he was once wrong.

Maybe we can even have a boxing match to determine when to hold the primaries. Of course, we would have to limit the tournament to 64 boxers so that the process can work. Some of you may think this method is unfair to Maria Corina, but you are all wrong, she is not only tough, but by going down with the first punch she may be able to campaign more and better than any of the other candidates. The tournament will be winner take all. The final survivor of the boxing tournament will choose the day, whatever it is. I bet some candidates get more national exposure this way than campaigning.

Or, take the fact that the subway continues to have problems. Hey, Gonzalez Lander was good, but you can’t expect the Metro to function well, 16 years after his departure and under Chavista hands to boot. The remarkable thing is that it works at all. After all, it has has had an unending series of Presidents, the last two getting further and further away from actual expertise.

The next to last one was three years out of his Ph.D. and never managed anything bigger than his home. He was promoted to Minister. The current one is an academic, a very good theorist of revolutions. I wonder what happened to the US$ 2.5 billion he invested to insure growth two years ago.

And the news that Lobo met Chavez? Who cares? Chavez has done about faces many times in his life and has no scruples.

For example, since Chavismo is “celebrating” April 11th. 2002, one may look at this video

and ask yourself: Who has less scruples? Arias Cardenas for calling Chavez a sick mind and an assassin with blood in his hands and now becoming Chavez’ Ambassador and future Chavez candidate for Governor of Zulia?

Or Chavez for getting close to him again?


Timeline of Venezuelas Government’s electricity flip-flop

April 9, 2011

(Arturo Uslar Pietri: There are no black-outs here,just darkness for you and brightness for other countries)

July 8th. 2010. Ali Rodriguez Araque, Minister for Electricity:  We have overcome the Electric Crisis

Aug. 29 2010. Vice-President Elias Jaua: The Electric Crisis has been overcome.

Sep. 2nd. 2010. President Hugo Chavez : The revolution has increased electricity production in Zulia by 1000%

Sep. 3d. 2010 Venezuelan Embassy in the US: Targets for Electric Production have been exceeded.

Jan 14th. 2011. Hugo Chavez, Chief loud mouth: The Electric Crisis has been overcome (They even made a pamphlet out of it)

Feb 17th. 2011: Minister Rodriguez Araque: In the coming years there will be full supply (of electricity) and excess capacity.

March 30th. 2011. Reuters: Widespread power outages return to plague Venezuela.

April 1st. 2011. Ali Rodriguez Araque: We will implement a plan to avoid strict rationing.

April 5th. 2011: Minister for Electricity Rodriguez Araque: We are not rationing electricity.

April 6th. Deputy Andrade of PSUV: There is no electric crisis in Venezuela

April 7th. 2011. Minister for Electricity Rodriguez Araque: There will be rationing to stabilize the electric network.

April 8th.: El Universal: Blackout compromised 62% of electricity demand.

April 9th. President Chavez: Fire caused blackout, but I don’t discard the possibility of sabotage.

Even the excuse was predictable…


I will be updating this post as time goes on.

April 25th: Minister for Electricity Ali Rodriguez: By 2012 the whole electric system will have been recovered. Not clear if sabotage will change his mind as he claims there was sabotage in two generators. I wonder who provides security at the plant?

May 9th. 50 blackouts daily in Venezuela.

May 12th. Head of Load Department of the Ministry Of Electricity: By 2012 you will be able to trust Venezuela’s electric system.

May 12th. Ali Rodriguez Minister for Electricity (Nationwide TV): Prophets of doom are once again announcing an electric collapse.

May 13th. Venezuela’s largest refinery complex hit by power outages.

May 17th. It has been six months since the official website of the electric sector publishes any statistics. Could it be because it would show how bad things are?

May18th. Minister of Electricity: By December electricity generation will be increased by 2,568 MW thanks to new distributed power systems and the overhaul of some units that are out of service.

May 26th. An “unexpected” interruption leaves three states without power. Carabobo, Falcon and Lara lost power tonight due to a problem in Planta Centro.

May 27th. Electric service restored in four States.

May 28th. Corpoelec applies rationing to compensate for electricity deficit.

May 30th. “Blackouts will be selective“. A professor of Electrical Engineer explains while it will be at the earliest in 2014 when the problems may be fixed in Venezuela’s electrical system.

June 1st: El Nacional Page C-7: Corpoelec had to shut down power in nineteen states “because it needed to”. This was stated by Igor Gavidia, Director of the National Center for Delivery of the Ministry for Electrical Energy. He gave a list of all of the “rationings”. (His words)

June 10th. Five hour blackout in Zulia State which affects four other states.

June 11th. Minister of Electricity: Electric service will be progressively restored by Sunday in Zulia State.

June 12th. The Government will announce emergency measures on electricity on Monday, June 13th.

June 12th. Minister Rodriguez Araque has censored all information about electricity in the country since November 2010

June 13th. Penalties are imposed on those that can not reduce consumption by at least 10%, the Government people’s consumption for the problems, not their incapacity.

June 27th. Electric system should stabilize by the end of 2011.

June 28th. CAF lends Venezuela US$ 320 million for overhaul of six turbines in Guri dam.

Sep. 5th. Chavez: We neglected the electric area