Archive for July, 2012

In Venezuela, There Is A Path and There Is Way

July 31, 2012

I went to Venezuela about two weeks ago and spent it meeting with a number of people. While I knew and know that it is an uphill battle to defeat Chavez, I must say what I heard and saw changed my mind quite drastically about the probability of change come October. In particular, I heard or saw at least two presentations of polls, which have different results, but from which I could reach my own conclusions.

Beyond that, the way the Government acts clearly shows that there is little confidence within the Government as to the possible outcome of the election. The recent CNE decisions against ONG’s and their campaigns and the massive use of state resources are but one example of this.

And to those that have not noticed, there was a union election in Ferrominera del Orinoco, the iron ore company owned by the Government, where the President of the union was reelected under the “Unity” banner by close to a 5%. And yes, while he was reelected, the path to the election was full of roadblocks and dirty tricks, the main one being hiring about 2,400 new workers to try to win it for the Government, as well as a one year delay to try to insure the PSUV slate would win.

But it was not to be. The same workers hired to load the election in PSUV’s favor, apparently decided they were not too happy somehow and the election went to the Unity candidate in what used to be Chavista territory and more importantly we are talking about a union election. Think about it, the rank and file of a union election held under the rule of the XXIst. Century Chavista Bolivarian revolution, was won by the opposition!

Going back to the poll numbers, I saw a presentation by a well known pollster, my favorite for too many reasons. Since I did not pay for it, I will not say the name, but it is in my mind the most accurate in recent years.

These are the highlights:

-To get it over with, because it is not the most important result, things were very close at the end of June. Within the error. That is the punch line.

-While crime is THE most important problem to a majority of voters, when deciding who to vote for, voters work with their pockets. It is inflation and their purchasing power which is most important when it comes to the decision of who to vote for.

-Confidence in Chavez is 9% better than confidence in Capriles. However, this numbers ahs not changed in six months. In 2006, confience in Chavez was 26% more than confidence on Manuel Rosales.

-51% of those polled like Chavez, 49% like Capriles. This is in response to “Is XX someone you like?”that is, not someone you would vote for. In 2006, the difference was 55% for Chavez, 40% for Rosales.

-Social and economic indicators are all even between the two candidates, however, Chavez’ have gone down or flat since December, Capriles’ have increased. They did go up the last three months of last year, but no more. In 2006, Chavez had at least a 15% advantage over opposition candidate Rosales.

-The fear that Capriles will cancel “Misiones” has gone from 60% last year to 42% at the end of June, which means Capriles’ message is getting through.

-50% of those registered in Mision Vivienda, expect a home before October. That is fully 25% of the population.

-85% of Chavista voters believe that Chavez is cured by now.

-The ratio of “Optimists” over “Pessimists” has remained flat to down since December.

The pollster discussed the variety of results between pollsters. He noted that the pro-Chavez votes is quite similar between “serious” pollsters. What is different is the number of undecided, which varies from 8% to as high as 23%. He suggested that it was the undecided that are leaning largely in favor of Capriles, which creates the differences.

The last argument is the only one that I fully did not buy. It is rare in polling to have the undecided split in such an asymmetrical way. Maybe the pollster wanted to be nice to his competitors, I just think that the other pollster are not asking the right questions. The pollster concluded by saying that Capriles’ trend was what you would like to see in an race: One candidate stuck, the other one rising, the structural race dramatically different from previous ones. Concluding, he said that a half million difference between Capriles and Chavez seemed to be quite reasonable at this time and with this data.

The other puzzle in all this, is the inconsistent policies of the Government: Why insist on the gasoline chip? Why the slowdown in Cadivi outflows? The first created fear, the second one could create shortages at the wrong time. The answer may be that not everyone in the Government is being realistic about the outcome.

So, I turn to my next worry: Will they concede? Looks tough at this time to answer this. These guys are no democrats. But I will give my thoughts on this in a post in the future.

In the meantime: There is a path, there is a way in Venezuela!

Chavez Off To Brazil To Have Venezuela Join Mercosur

July 30, 2012

You have to wonder about the mental sanity of the Venezuelan President. Here he was happily going to Brazil to celebrate Venezuela’s back door entry into Mercosur, illegal and all, with a smile in his face.

It was like going to have a hemorrhoid operation or even worse, a colonoscopy, with a smile on your face. I guess Chavez knows about the latter, but if all Venezuela is going to get out of Mercosur is the shaft, please bring the ointment!

But you have to wonder what type of mush Chavez has for a brain, when he says that the “success (??)” of Mercosur shows the failure of the US. I think he has it backwards. The failure of Mercosur, enhanced by Paraguay’s departure and Mercosur’s dumb policies, plays right into the hands of bilateral free trade agreements between the US and Latin American countries.

Sure, Brazil, Argentina and Uruguay may now get some advantages from welcoming Chavez into Mercosur, But in the long run, if there is change in Venezuela and none in Argentina, the only winner in all of this is Brazil. Brazil is the powerhouse that wins in all this. Venezuela and Chavez are the big losers, the commercial invasion of our country by our “friends” has just begun.

But figure it out, Chavez is not only happy to go, but endangers his health and his life by doing so. So he can hail a virtual agreement that does nothing for Venezuela. The only victory is that he finally managed to get it done, even if illegally so. But that is all that Chavez seems to care about. His goals are idealistic, unimportant, impractical ones. The ones that his simplistic mind sets out to do. Nothing concrete, all ideological.

Bolivar was asasssinated, we determined he wasn’t, he suspects he was. Mercosur is good for Venezuela, we determined it isn’t, let’s join them! We have reduced poverty, we really haven’t, let’s celebrate we have!

As we used to say: simply high quality BS.

Flights to nowhere? Or Drug Flow Through Venezuela?

July 27, 2012

You have to like this map in an article today in the New York Times showing flights between Central America and the Caribbean that go to the neverland between Apure State in Venezuela and Colombia.Note how clearly the flights are planned to be in international waters and Venezuelan airspace, avoiding Colombian one, where they may be intercepted or tracked.

The Venezuelan Government always says these are baseless accusations. What will they say now, that these are fishermen going to fish for pavones in that area?

The sad truth is that this is another legacy of the Chavez Government which claims to be fighting drug trafficking while not doing much about it.

Drug money can be one of the worst influences in a country’s life.

And they still say it is a revolution..

A Gringa in Venezuela’s Highest Court?

July 26, 2012

A while back, a trusted friend told me there was a foreigner in Venezuela’s Supreme Court, but this person could not prove it. Yesterday, this person sent me this article which says that someone has actually gone to the Prosecutors Office to accuse that Supreme Court Justice Evelyn Marrero Ortiz is not Venezuelan.

The article says that the Justice was born in Puerto Rico on February 22nd. 1942 and obtained the Venezuelan nationality in 1966 when she married a Venezuelan citizen whose name is irrelevant to this story. Thus, technically, if this can be verified and true, Justice Marrero is simply a US citizen, about the worst citizenship you can have if we are to believe Chavez’ revolutionary words.
The accusation further says that in the Judge’s papers at Universidad Central de Venezuela, it clearly says that she was born in Jayuya, Puerto Rico. According to Chavez’ own Constitution (Article 41) in order to be a member of the Venezuelan Supreme Court, you not only have to be Venezuelan by birth, but you can not have another nationality, which implies that you have to renounce to any other nationality you may have. Justice Marrero would not qualify for both reasons, even if she has renounced to the other nationality.

Personally, I would allow people born abroad but who have lived here all their lives to hold certain positions, including most Ministries. What astounds me is that these ultra nationalistic revolutionaries allow these blatant violations of their own Constitution to occur, without saying anything, while arguing sovereignty, self-determination  and other such BS for everything that happens around them. Just like they allow Cubans to run intelligence and security and have a say in military and identification matters and it is ok, because they are Cubans.

In fact, Minister of Planning and Finance Jorge Giordani, was accused of not complying with Article 41 in the first few years of Chavez’s tenure. At the time, it was argued that Giordani, who was born in San Pedro Macoris, Domenican Republic, held a position (Minister Planning) which was not the subject of Art. 41. Well, since they merged Planning and Finance, this is no longer the case, but given Chavez’ filial relationship with Giordani, nobody seems to want to bring this up either.

Again, I write this because I trust the person that gave me the info. You would at least think that the Justice herself would explain to us, whether she is not or not qualified to be part of the Venezuela Supreme Court. But as usual, there is simply silence.

But of all nationalities, I find it ironic that she is a gringa. Don’t Chavistas get paranoid that she could even work for the CIA, the NSA or the FBI?

What a joke this Government is!

Hugo Chavez. Bully, Autocrat and Incompetent

July 25, 2012

The last few days, President Hugo Chavez has clearly demonstrated the qualities that make him unfit to be President even of his condo board, if he had a condo, proving once again that he is intolerant, autocratic and does not believe in modern science and technology. To wit:

1) He spends millions of dollars exhuming the remains of Liberator Simon Bolivar to “prove” that he was killed by the Colombian oligarchy, a silly ideological theory. The scientific study concludes that there is no evidence of any poisoning and that Bolivar more likely died as a consequence of histoplasmosis, a fungal infection.

Chavez’s response? He still thinks that Bolivar was poisoned. This is the same line of reasoning that leads him to think that despite the disastrous economic policies of the last 14 years, they are correct, just because he thinks so. Or that the electric problem is fixed, even if there are daily blackouts. And so on..

As to the reconstruction of Bolivar’s face, what a waste of money! We now know the detailed face of Bolivar just when he died, about the worst point in life you can hope for. So, if you think he looks bad, ugly, emaciated or all of the above. Of course he does, he had just died! What do you expect?

The reconstruction seems consistent with the paintings of Bolivar, just nobody painted him right before his death.

2) Venezuela lost yet again,¬† another case in the Interamerican Human Rights Court (CIDH). Of course, you don’t respect human rights, they rule against you. Chavez’ response: He ordered his Foreign Minister to withdraw from the Human Rights Court. Among other things he argued, as usual, the “sovereignty” of countries. Where was he when Maduro went to Paraguay to tell the General not to allow Congress to impeach Lugo?

In any case, this is just grandstanding, in his infinite ignorance, Chavez apparently did not know that you can’t withdraw from the CIDH, you have to withdraw from the OAS, of which the CIDH is part. Then he will really be out of the mainstream diplomacy, which he surely does not want.

3) The Governor of Zulia State asks that there be a referendum on the use of the gasoline “chip”, the rationing tag imposed to that State in order to supposedly limit contraband. This possibility is part of the Venezuelan Constitution and it explicitly says a Governor can ask for such a referendum. Mind you, the Constitution is Chavez’ Constitution of the year 2000.

Chavez’ response? To warn the democratically elected Governor that he may suffer the same fate of former Governor of Zulia and Presidential candidate Manuel Rosales. Rosales was accused of corruption after his Presidential run and had to go into exile.

4) During the visit to Venezuela by Argentina’s Minister de Vido, who was part of the Maletagate case, Chavez theatened Repsol quite directly by suggesting that the company better reach an agreement with the Argentinian Government or this may have consequences in Venezuela, where Repsol has important interests. Talk about carrying a big stick! A bully is just a bully, is just a Bully!

I know, I know, is more of the same, we knew all that, it is just amazing that he can do all this in such a short span time.

The New Foreign Exchange Agreement Between The Central Bank And The Venezuela Government

July 21, 2012

There has been a lot of noise since yesterday because of the new Foreign Exchange Agreement (Convenio Cambiario #20) between the Central Bank and the Venezuelan Government, with most of the focus placed on the fact that bank accounts may now be opened in foreign currency in Venezuela. However, it is a limited form of bank accounts that can really be opened, as I will explain below. But first let’s review the current foreign exchange system before the new decree came out:

There are two ways of accessing foreign currency today in Venezuela. First, via Cadivi, which gives you dollars for imports, travel and certain medical treatments and studies. These dollars are sold to you at Bs. 4.3. You pay in Bs. and Cadivi pays the provider or if it is money for travel, you use your credit card in foreign currency and pay your bank in Bolivars. Similarly, banks are allowed to give you some cash for travel, which you pay in Bolivars. There may be dollars for other things, but they are not critical for the discussion.

The second way to get dollars is via SITME, the Central Bank’s foreign exchange system, in which you buy bonds, sell them abroad and you receive foreign currency. Companies can buy up to US$ 50,000 per day at the rate of Bs. 5.3 per US$ , but no more than US$ 350,000 per month if they satisfy certain requirements. Similarly, individuals may obtain up to US$ 5,000 per year for travel, $10,000 for health problems and $6,000 to send to relatives via SITME at the rate of Bs. 5.3 per US$. The only common criteria in both cases, is that you have a US$ account abroad in your name to receive the funds.

Thus, what the new Foreign Exchange Agreement does first, is to allow local banks to open accounts in foreign currency¬† for both companies and individuals in order to receive US$ that originate in SITME. This is done, because only those that had accounts abroad could receive dollars from SITME, no more, no less. It does not mean, like some people suggest that “Venezuelans will be able to save in US$ locally” from now on. People will buy dollars via SITME and more likely than not, will immediately send the money elsewhere or spend it. Nobody in their right mind is going to add to these accounts any new funds for reasons that are too obvious to mention. But let’s suggest just two: The Government could order their forced conversion to local currency (The banks will actually have the dollars at the Central Bank) at any time and the Government will know how much you have. That should be sufficient to scare away anybody.

The second thing the Foreign Exchange Agreement does, is to allow foreign companies doing infrastructure, “public investment” or development projects to have local bank accounts in dollars, which they will be able to mobilize via partial or total withdrawals in local currency at the official rate of exchange (Bs. 4.3 per US$).

Finally, and this is likely to be the most relevant thing, the Foreign Exchange Agreement allows “State companies” which obtain foreign currency from their exports to devote up to 5% of the average monthly balance of their foreign currency accounts, to acquire bonds in the secondary market to be sold in the SITME Foreign Exchange System.

Read: State companies will now be able to sell 5% of what they have in their dollar accounts at Bs. 5.3 per US$, rather than at the Bs 4.3 per US$ that they were forced to sell their foreign currency to the Central Bank before.

What this is, is a small partial devaluation of the currency which will give PDVSA and in lesser grade, other state companies, more Bolivars for the foreign currency obtained from their exports.

This also means that the offer in SITME will increase by 30-35%, as these bonds bought by the State enterprises flow to the SITME, rather than directly to the Venezuelan Central Bank. So far this year, the average daily volume via SITME has been around US$ 43-45 million, so we could see around US$ 56-60 million per day once this gets going.

One interesting consequence of this, is that PDVSA will have more local currency and less pressure to sell new bonds in the international markets. Another minor one, is that these companies will buy bonds in the open market, which can take up to a month to come back to the international markets, which means there will be a small impact on supply, which will be reduced.

Thus, the agreement aims to extend the people that can get SITME dollars. make it more practical for some foreign companies to operate in Venezuela and allow Government owned companies to get more Bolivars for their dollars which originate in exports.

That’s it, boys and girls, nothing to get too excited about. It’s actually quite boring and of secondary importance when you come down to it.

FBI Sting Operation Recovers Matisse Owned by Venezuelan Museum

July 18, 2012

(Try guessing which one is real and which one is fake, answer at the end)

An FBI sting operation in Miami led to the recovery of a Matisse painting entitled “Odalisque in Red Pants” owned by the Sofia Imber Museum of Modern Art in Caracas. The FBI agents posed as customers willing to buy the painting from a couple whose name has yet to be disclosed by the FBI.

The story started in 2002 when it was discovered that the Matisse hanging in the museum wall was a fake, after the Chavez administration had changed the Board of the museum a couple of years earlier, including Ms. Imber, who had run it from its beginning (And purchased this particular painting for a relatively low price)

Initially there were accusations that the painting had disappeared after the management change, but others have suggested that the switch took place even before when the painting was lent in 1997 to a Spanish exhibit. However, those at the museum until the management change have stated privately that they would have certainly noticed the switch. The current Director of the museum has suggested it was an inside job, without ever explaining her statement.

The switch was discovered when a collector was offered the painting in 2001-2002 and began performing due diligence on the painting and wrote to the Director of the museum. This led the museum to check the painting and the discovery that the one hanging in Caracas was a fake. The painting was offered to a number of collectors and rumors of that it was for sale have recurred over the years.

Hopefully, with the recovery of the painting the full story of the switcheroo will be revealed and those responsible prosecuted.

For now, this is another picturesque (pun intended) story of the always devious Venezuelans in Government (no matter when the switch took place) always looking for an angle that will make them rich overnight.

Answer: The original is the one on the left

When Foreigners are Treated Better than the “People” in Revolutionary Venezuela

July 17, 2012

The headline in today’s El Nacional was quite succint:

“Misiones have received an amount similar to Cuba’s subsidy”

Think about it. Suppose it is 50% off, the subsidy is only half of the US$ 44 billion that El Nacional calculates the Government has spent on the centerpiece of Chavez’ “accomplishments”, which is only an ill conceived bunch of irregular programs which are aimed at getting people to vote for him.

But the same? Are you kidding me?

Think again. Venezuela’s subsidies to Cuba, a country of 11-12 million inhabitants, are comparable to the miserable showcase of the revolution for the 28 million inhabitants of Venezuelans. This means Cubans get, per capita, triple the benefits, just because Chavez has this weird empathy with the bearded and incompetent Cuban Dictator.

That is all the oil windfall has done for the “people” in “revolutionary” Venezuela.

In any other country. any country with pride or self esteem, this would be a scandal. In Venezuela this is yet another headline to show that these revolutionaries have little pride, little regard for the so called sovereignty of Venezuelans, little regard for a country with poverty, malnutrition, a horrible health care system, black outs, shortages, 7.5 million people without housing.

But wait! These are the “people” Chavez is supposed to represent. care or, bla, bla bla…

Pure revolutionary BS!

Yes, Chavistas, PSF’s and the like, tell me one reason, just one, why this should be the way it is. Solidarity? Gimme a break. These guys are taritors. Chavez should be tried for being a traitor to his own people. And his collaborators should be jailed for giving away the country’s wealth and allowing Venezuelans to live in squalor for the benefit of some poor Cubans who we may have sympathy for, but who have little to do with our country.

Just a thought.

I think we should jail them if we ever get the chance. Call me anti-patriotic. All of them.

But I do. Jail them. No remorse. Just Justice!


The Upside Down World of Venezuelan Economics

July 15, 2012

This is truly a devil’s Excrement item, stolen from Andres Rojas’ Facebook page. A gas station in Margarita offering free gas when you wash your car there.

How screwed up can you get?

No Venezuelan Candidate Can Top Reina Sequera’s Offering

July 10, 2012

In its never ending quest to offer the voters anything, candidate Reina Sequera, the candidate for the Poder Laboral party has made the ultimate populist promise:

“I promise to eliminate the poverty of all Venezuelans. This promise will materialize itself opening a personal bank account and deposit one million US$, amount which we consider should be sufficient for each poor person to get out of material poverty”

There you have it. Hard (Impossible?) to top this. Poverty killed instantly by distributing US$ 26,000,000,000,000 among all Venezuelans. (Please don’t quibble if the population is 26 or 29, or if she will hand out one third at a time, that is round off error). That is 2.6 x 10^13 dollars which will come from”all of the excess of wealth of the minerals that gives us our noble nature, whether you call it oil, iron or gold, etc.”

There you have it Venezuelans. Don’t miss your chance to become a millionaire come October. Elect Reina your President and why not, your Queen. She has over promised anyone and everyone. Never mind the 13 zeroes. Clearly, Hugo was unable to dream beyond dreams. Or beyond his arithmetic.

Go Reina!

Now, Why didn’t I think of this first?