Archive for May, 2011

Even CANTV is slowly being destroyed by Chavez’ revolution

May 12, 2011

When Hugo Chavez nationalized phone company CANTV, not only did he rob the shareholders (He paid less than Carlos Slim was offering per share), but now he is ready to rip us all of, by driving a good company into the sort of useless company that most state enterprises have become. The difference is that CANTV has competition, which Chavez will try to solve the easy way out: By nationalizing the competition…

The problem begins with the fact that while the Government only generates 8% of CANTV’s business, Government entities only pay 9% of what they use. (They consumed Bs. 550 million (US$ 127 million at the official rate of exchange) but paid barely Bs. 50 million (US$ 11.7 million)) You see, the Government assigns each Minsitry or company a budget for services, but since nobody is watching (even less now that blind Russian is in Cuba getting his health back) they could care less, they use more and simply don’t pay.

It’s called the irresponsible revolution…

If this were not enough, CANTV is making more money, but remember two curses: One, inflation, and the second one, is that the company invests less and less as the main shareholder (The Venezuelan people…no, sorry, Hugo Chavez) demands larger dividends. Thus, even though, earnings went from Bs. 734 million to Bs. 2.4 billion, this year the Government demanded Bs. 1.5 billion on dividends.

Thus, the company has 65% more fixed lines, 70% more cell phones and 1.5 million Internet users, but the investment budget was fulfilled on;y 55%, less than US$ 500 million. Meanwhile, Chavez forced the company to buy computers for the poor.

Of course, CANTV stays competitive by insuring that the foreign exchange control office CADIVI does not approve official dollars for competitors Movistar and Digitel, while approving them for CANTV. But one day this rope will break, as margins collapse (they already are), profits go down (They already have) and the company stops investing. At this point, mighty Hugo will come out and announce that telecom is “strategic” (i.e. He needs it to be reelected in 2018), the Spanish and Venezuelan owners will never get paid for their assets (What else is new?) and then Hugo “The Terminator” will destroy all of the telecom infrastructure, insuring that Venezuela will be a backwards country as long as he is in charge.

Yeap! It’s called a “revolution”,  massive destruction of value and goodwill just because one man cares little about his country and his people, only about himself…


Hugo Chavez’ main link to the FARC, trusted adviser (and twice Interior Minister) Ramon Rodriguez Chacin

May 11, 2011

Reading the Raul Reyes papers, the thing that strikes you the most is the ever presence of Ramon Rodriguez Chacin, who has been Chavez’ Minister of many things and who has had a questionable past, including having two Venezuelan ID cards, and a huge account in a bank, but Chavistas are forgiven for such sins.Not the enemies.

Going through the Reyes emails, I was struck how Chacin met, communicated and contacted Reyes and the FARC’s leadership with incredible regularity and mostly representing Chavez. The whole strategy of acting as mediators to release the hostage is contained in the emails and Rodriguez Chacin is always present.

But the sentence that struck me the most was (1.2811):

“Rodriguez Chacin asked about the possibility of transmitting our experience in a guerrilla war, which they call the “asymmetric war”. They want to operating modes, explosives, Bolivarian speeches, forest camps, how to ambush, logistics, mobility, all of this thinking of an adequate response to the possibility of an invasion..There will be many levels, some of them with some Generals..Chavez proposes quarterly contacts to balance out the contacts with the two guerrilla groups”

All over the place, Rodriguez Chacin offers help and collaboration with the FARC, visiting and contacting them and even asking about people kidnapped in Venezuela, not because they care but because there is “pressure”.

Rodriguez Chacin has always been a shady character, Minister of the Interior twice, Head of the Intelligence Office DISIP and famous for calling the guerrillas “comrades” when the hostages were turned over and to “keep up their fight”

Yes, Chavistas, keep denying the obvious…

(Quico has a post on the documents and Bernal)

NYT: Chavez’ Government asked the FARC to kill opposition leaders and carry out bombings

May 10, 2011

Today’s New York Times has an article by Simon Romero on the book with the internal FARC communications found in Raul Reyes‘ computers. Among the highlights:

“In some of the most revealing descriptions of FARC activity in Venezuela, the book explains how Venezuela’s main intelligence agency, formerly known by the acronym Disip and now called the Bolivarian Intelligence Service, sought to enlist the FARC in training state security forces and conducting terrorist attacks, including bombings, in Caracas in 2002 and 2003. ”


“The book also cites requests by Mr. Chávez’s government for the guerrillas to assassinate at least two of his opponents.

The FARC discussed one such request in 2006 from a security adviser for Alí Rodríguez Araque, a top official here. According to the archive, the adviser, Julio Chirino, asked the FARC to kill Henry López Sisco, who led the Disip at the time of a 1986 massacre of unarmed members of a subversive group.”

Let the denials begin…

It’s easy to register for Mision Vivienda, just give us your fingerprint first

May 8, 2011

It is very easy to register for Chavez’ illusory Mision Vivienda, just come over, bring your national ID card, give us your family data, the data on your current housing and…

give us your fingerprint, an obviously needlessly step that will create the fear in you that the Government will Tascon you: You don’t vote for us, you don’t get a home. Of course, even if you do vote for Chavez in 2012, the chances of you getting a new home are about 8%-12%.

Maybe one of our PSF’s can explain to us how after the experience of the Tascon/Chavez list, the fingerprint can be, should be or be part of registering to get a housing unit that has yet to be started.

It´s simply perverse…

Chavez ready to spend the house and create illusions to get reelected

May 8, 2011

After visiting Venezuela for a few days, there was a very clear message: Chavez is ready to pull all of the stops in order to win the 2012 Presidential race. If you thought the last twelve years were filled with cheap populism and undelivered promises, you ain’t seen anything yet. For the next eighteen months, Chavez will borrow, promise, give away and spend like there is no future. But he will not spend on anything productive, he will not build roads, or houses, or infrastructure. That is not the priority, the priority is to increase salaries, increase benefits, give away money, import food so that shelves are stocked, hold prices back as much as possible and promise and then over promise, just in case. The prioriti ys to convince people to vote for him.

There are two possibilities, that the strategy will work and he will be reelected, or that it will not and the opposition will be left holding the bag of a distorted economy, a Pdvsa without resources and in need of billions for investments and a gloomy future, that Chavismo will blame on the newly elected administration. If reelected, Chavez will then resolve some of the distortions and hope that things will somehow improve, pray for higher oil prices, so that he can then pull it off once again. Other than getting reelected Chavez, has never been very good on long term planning. He lives for the promise and the announcement, not the delivery. He lives for his whims and ideas, not for execution.

Nothing exemplifies this better than anything that the new “Mision Vivienda” Chavez’ promise that he will build 1.5 million homes for the poor in the next six years after being unable to build one third of that in his first twelve years. Everyone knows this will be impossible, that essentially nothing can even be accomplished before the 2012 election, but we are about to witness the Greatest Housing Promise Show on Earth.

To begin with, everyone in Venezuela with a cell phone (recall cell phone penetration exceeds 100% in Venezuela) received on May 6th. the following SMS from the Popular Ministry for Housing and Habitat:

“Bring your crib sheet with all of the data of your family group to register in the “Gran Mision Vivienda”. And go live enjoying life. Visit”

There you have it, massive advertising, massive populism, massive illusion with a single SMS. Everyone that registers will think that there is a house at the of the Chavista rainbow. Never mind that, optimistically, only maybe 10-15% of those registering is likely to receive a housing unit in the next seven years. It is too tantalizing, too appealing to ignore, it works. It is the hope to get out of your personal hell with crime, unhealthy conditions and monthly rent in the barrio where you live.

Because in talking to experts you learn that it takes six to seven years to finish a housing project from the day it begins. Not from the day you think about it, but from the day you start, i.e. You have the land, you have a design, you now need to get the permits, get electricity, get water. Oh yeah! Now comes the tough part, getting the houses built. The best Chavez year in housing is worse than any of Caldera’s, one of the worst Presidents of the IVth. At least Caldera could have used the excuse that oil was near ten dollars a barrel.

As part of the show, The Chavez administration issued this week a decree exonerating builders from the VAT, from import duties and from income taxes. (Recall these same people were the enemies three months ago). It also placed a cap on who may get a mortgage from the mandatory credit portfolio of banks. If your family group makes more than five minimum salaries a month, it will come out of the bank’s portfolio, not the 12% obligatory obligatory mortgages.This will, of course, not generate any housing units soon, but it will generate interest, will generate activity, will generate investment, it will provide fire for the great housing illusion.

And it will work, like so many of the revolutionary illusions of the las twelve years. In four or five years, maybe a couple of hundred thousand houses will have been built, slightly more than without the Mision Vivienda and if there is a new election, Chavez will talk about something else, ignoring the failure of the housing illusion.

Maybe by then, it will be time for a real revolution in Venezuela.

The strange case of Joaquin Perez Becerra, the Man Chavez Personally Extradited to Colombia

May 4, 2011

(Perez Becerra, right, wearing his reporters uniform)

I find the case of Joaquin Perez Becerra truly fascinating. Seldom have we seen pro-Chavez groups so incensed over an act by their hero and the contradictions on the case are truly fascinating.

Perez Becerra has been involved with the FARC for thirty years. He is now a reporter involved with Annacol, who has been living in Sweden since 1993, where he was accepted as a refugee and later acquired the Swedish nationality. When Rodrigo Granda, the Foreign Minister of the FARC,  is captured in Venezuela in 2004, Perez Becerra took over many of his roles, as was later discovered when Raul Reyes’ computers were captured.

Apparently Perez Becerra was coming to an emergency meeting of the FARC leadership and Colombian intelligence warned Venezuelan authorities of his arrival from Frankfurt. Later, the President of Colombia Juan Manuel Santos said that he had asked Chavez to capture Becerra, who was flying under an alias. using that magic (or is it Makled-magic?) leverage that Santos seems to have over Chavez lately, was captured as he arrived in Venezuela and faster than you can say Joaquin Perez Becerra, was deported to Colombia, without formal procedures. Even worse, his dual nationality made it questionable whether he could or should be readily extradited to the country where he was being persecuted, which allowed him to qualify in Sweden as a political refugee which led to his new nationality.

Remarkably, Venezuela’s Communist Party and 35 other organizations revealed that Perez Becerra had been a frequent visitor to Venezuela in the past two or three years, denouncing the illegality of Chavez’ action and even leading to street protests over the issue. (Jeez, where have they been all these years!)

Even worse, a Representative from Chavez’ political party PSUV, questions the motivation of the Communist Party, some leaders of which actually suggested that Venezuela can no longer be a safe harbor for revolutionaries. Nice going guys!

Chavez, as usual, assumed his “Yo no fui” attitude (Who, me?) saying that this was Perez Becerra’s fault, knowing that there was a “red alert” warrant for his arrest. Hugo, could it be because he was doing this routinely before you found your “best new friend” Santos? (BTW Hugo, is it true, as reported, that Perez Becerra had a Venezuelan natioanal ID card?)

By now, lots of groups are mad at Hugo. Articles not only in Aporrea, recriminating Hugo for his decision, but even Chavez’ pet project Telesur published an opinion article on the topic.

Sweden demanded an explanation and while Chavez was calling Perez Becerra as being only “accused”, the extreme left parties referred to him as a “journalist”.

Even the FARC complained to Chavez over the extradition.

The problems seems to be that Perez Becerra is associated with the Colombian communist party and is not a Bolivarian figure, thus Communist members have been instructed to complain and explain how Hugo could have been caught doing this, how he was trapped, how he had no choice.

Yadda Yadda Yadda

Hugo does whatever he pleases and right now, Juan Manuel is the man! Santos asks, Hugo complies…

But no Makled yet…go figure

Some impressions on visiting Venezuela

May 3, 2011

(Only socialism saves!)

I know, I know, it’s been a while. Between Easter in Mexico, a birthday, my dog’s rough encounter with a Bufo toad and a visit to Venezuela which included packing the orchids, it has been rather hard to sit down and write. As usual, there are lots of stories to tell, but I thought I would start with my impressions during my visit.

The first thing that shocked me was the number of politicians who aspire to be candidates for President and plan to enter their names into the race. I mean, when even Eduardo Fernandez, once know as “El Tigre”, thinks he is relevant, you realize how out of touch many Venezuelan politicians are. I mean, I love democracy and everyone has a right to enter their name in the race, but being involved with politics is not an “on” and “off” button you turn on whenever you feel like it, least of all, when you have a track record of failures that proved you are not what the Venezuelan people wanted ten years ago, least of all ten years into the new century.

Then there is the excessive optimism of many in the opposition. It is as if they can’t wait to hold the election because they are soooo sure Chavez will lose. Hey guys! Remember 2003? Remember 2009? Have you noticed that oil is above US$ 100 and that the opposition has little money and  a front runner whose charisma is measured in microcharms?

And then, Chavez comes up with his new Bill to control prices and protect salaries. Once again, a Bill which is illegal under the Enabling Bill, but I guess legality is not a useful concept any more around here. The worst part is not that Chavez is proposing this Bill, including a “Maximum Price for Sale” that will be determined by the Government, but that the same unions that are being ignored by the Government in their salary demands, back the Bill.

Does anyone remember the word “Conacopresa”. This is the same thing, except with no talks, the Government decides everything. This solution is sooo Cuarta Republica!

But in the end, the problem is that these are just useless measures. Price controls have never worked, all you do is delay adjustments, insuring the permanence of inflation or generate shortages. I guess Chavismo’s goals is to maintain a balance so that the two coexist.

But now there will be a “Monitoring room for production costs in order to establish maximum profit rates which will be adjusted quarterly”. I guess the rate will always go down, this is after all, a revolution, with little sympathy for profits, unless they come from exorbitant oil prices.

The problem in the end is too much monetary liquidity, so the Government goes and reduces bank’s legal reserves, freeing a couple of billion dollars in additional liquidity to give inflation another push.

Way to go! Samuelson and Friedman must be turning over in their graves!

Finally, an airport without water is not precisely pleasant, thanks God for flights that are on time!