The Devil's Excrement

Independent of the outcome of the audit (Just think, besides the irregularities and votes abroad, 166,000 people could not vote because the border was closed ahead of time and 140,000 new voters were not allowed to vote, despite the law saying they could) Nicolas Maduro starts his term weakened by the close electoral result, his backtracking on the audits and the protests and the questioning of his victory. Had he allowed the recount on day one, he would be in a much stronger position, even if still quite weakened by the fact that his candidacy lost some 600,000 votes from the October Presidential election.

Maduro won in 16 states, while Capriles won in eight states, but the latter are the most populous and urban states in the Nation. Among large population states, only Carabobo went for Maduro and in that State is where the opposition appears to have the largest numerical inconsistencies.

Maduro was a very inexperienced candidate and that had a lot to do with his narrow victory. In contrast, Capriles started out weak last year in his campaign against Hugo Chavez, but improved dramatically as the election approached, Maduro had never been involved in a large campaign and the electorate did not get a clear picture of who he is, other that Chavez’ chosen successor. Maduro tried to be Chávez, but he is only a bad imitation, without the quickness, the wit or the charisma.

Maduro´s weakness began in January, when he started out on the wrong foot, as the Venezuelan Supreme Court created the concept of continuity to justify Maduro becoming interim President and guarantee that he would be President and candidate at the same time.

Maduro’s campaign began by appealing to the emotions associated with Hugo Chavez’ death. But he went too fast from mourning to singing, sending a mixed message to the electorate. Moreover, he never defined who he is, trying to sell himself as the son of Chavez, his successor, without clearly explaining what that meant. Voters really knew him very little, since as Foreign Minister he has not been in the public eye in the last six years and he presided over the country for the last three months, a period in which inflation and shortages have increased significantly. (The Venezuelan Central Bank did not report the shortage index in March for the first time in years, inflation was 2.8% that month)

And people were never too satisfied with the announcements of Chavez’ illness and the constant assurances that he was recovering, only to die on March 5tth. And while the long funeral gave people a chance to grieve and pay their respects to the leader, Easter week, a vacation week in Venezuela, broke the mood and by the time it was over Maduro’s campaign seemed to change, talking more about Maduro, son of Chavez, than about how much Chavez was missed. In the end, he never explained who he was or why he deserved to be chosen by Chávez.

And Chávez can also be blamed for the failure. Clearly, Maduro was not the best choice and he never explained beyond his loyalty, why Maduro should be the successor. Because loyalty was the only reason Maduro rose in the Chavista hierarchy. He did what Chávez asked him to do. He never questioned anything. Clearly, Chávez somehow thought he would not die, but not considering the possibility and announcing or even just promoting his successor earlier, now has a big political cost. In fact, even refusing to accept he would never go back to the Presidency had a cost. Had he stepped aside and an election held in February with Chávez alive, would have guaranteed a more ample victory for Maduro.

Time always was Maduro’s worst enemy.

Capriles on the other hand, reignited the opposition by frontally attacking Maduro, something he never did with Chavez. He managed the timing of the campaign very well, even beginning with an intrigue campaign the first weekend, creating the impression he had not decided whether to run or not. Two days later the MUD told him he was the candidate if he wanted, which he readily accepted the same day. This allowed him to be on the forefront of the news while Chavez’ funeral was still taking place.He treated Maduro as an equal, while carefully respecting Chavez and his memory. And Capriles also talked more about the problems that concerned the people, mostly shortages, inflation and crime, which Maduro seemed to be avoiding or trying to blame the opposition for, while making a few gaffes which made him look bad.

But perhaps the biggest surprise is not that the election was so close, but that it was close because a significant number of voters shifted their votes from Chavismo and actually went and voted for Capriles. Before the election, and in the absence of detailed polls, it appeared as if Capriles’ only chance was for the Chavista light votes, the more independent minded voter, not to show up for the election.

But show up they did and to vote for Capriles, who actually increased his vote total, something that was not expected. In the end Capriles was up close to 600,000 votes, while Maduro’s total was lower than Chavez’ in October by a very similar amount. This was totally unexpected.

And polls were really off the mark in this election. You can blame the short period of the campaign or Easter week, but clearly they were not even close, with only two pollsters projecting a Maduro win by single digits, the closest being Datanalisis with a difference of 7.2%, outside the error of the poll

But as we suggested last week, none of these polls gave us an inkling of the electorate was thinking, particularly the voters in the middle, those that do not consider themselves Chavista, but traditionally voted for Hugo Chavez and did not trust the opposition. Abstention was 21% and continues to be the most difficult number to be precise about in Venezuelan elections. Polls said it would be 15%, history suggested close to 30%, but clearly people were engaged and interested in the electoral process, even in Chavez’ absence.

If the result stands, Maduro does not start his Presidency on the right foot. He did not get the mandate he wanted and it will be thus be much harder to press the revolution further, without a backlash from the population. Moreover, his handling of the recount issues and the protests has only undermined further his weak mandate.

Maduro also faces very difficult decisions on the economy, with shortages on the increase, oil dropping and inflation increasing and being felt by everyone. His best path would be to change course on economic policies, change the economic team and impose a new line of thinking to fix some of the distortions created by Chavez’ policies. But his weak mandate will make it difficult for him to change course, given the differences within Chavismo. And these are huge. But beyond that, people need jobs, infrastructure needs investment, a model of distributing a now decreasing amount of money is now doomed unless there is true change.

For the opposition this has been a huge victory. Not only did they manage to show the country is divided exactly in half, coming very close to a victory, but the audits may show an even weaker victory for Maduro, which will only damage the credibility of the Government. Furthermore, Capriles, who appeared to be the person with the most to lose in this election, has now become the rightful leader of the opposition. He may not have won the election on Sunday, but he won the recount fight, a political victory in a country where a single man has dominated all political battles for the last fourteen years.

Politics is back in Venezuela, as we said a few weeks ago and some people have to learn how to play politics again.

But the opposition also needs a model for the country. We all know the things that have to be changed, from the exchange rate, to the gasoline subsidy, to restoring the rule of law, to the oil subsidy for foreign countries, to the subsidy to money losing enterprises, to really improving the electric infrastructure, to fixing infrastructure and promote local production.

But to the poor of Venezuela, there has to be real change, not the small change of money in the pocket seen in the last fourteen years, while crime soared, blackouts increased, less housing was built, human rights violations boomed, corruption increased dramatically, fewer jobs were available and the dependency on oil increased even further.

Until such change occurs, political instability will be the rule of the day, no matter who is in power in Venezuela.

So, after a brief hesitation by Impostor-President Maduro the first day, in which in his moment of euphoria (followed yesterday by near hysteria, according to the New York Times) told he had won the election, he said naively: Let’s count the votes.

But no more.

It was a lapsus brutis

Ever since that moment, every statement has been exactly the opposite,  starting with former President of the Electoral Board (VP of the country later (impartial, ja,ja), Mayor now) Jorge Rodriguez who immediately following Maduro’s victory speech denied the possibility of a a recount, as accepted by Maduro, and requested by challenger Henrique Capriles.

And since then, Chavismo has denied the possibility of a recount, even without having seen the evidence that Capriles and his command said they had and actually presented in full today. (Because the March Nazi Maduro prohibited us from going with Capriles)

Thus, the President of the Electoral Board, Tibisay Lucena, a woman as partisan as can be, not only denied what is a legal right, but went as far as suggesting this was no longer part of the legal framework.

And as the military has been pressuring Maduro to allow a recount, the Impostor-President had none other than the President of the Venezuelan Supreme Court, Luisa Estela Morales, issue her already formed opinion, once again without the legal arguments being presented at the time in her Court.

But you know Luisa Estela, twice removed for corruption, she wants to hang on for her sweet retirement.

When a Judge expresses an opinion without having heard the case, she has to recuse herself from it, but such niceties and civilized actions, do not exist in the Chavista Judiciary, who judged Afuini guilty, because Chavez asked them to. Evidence is a four letter x 2  word for Chavismo.

But the Head of the Supreme Court is so ignorant and incompetent, that she not only forgets the law about challenges to election results, but forgets her own Court’s decision, in which she was involved, fining an opposition electoral coordinator for destroying the same, supposedly useless ballots, from the opposition primary in February 2012.

Why is it a crime to destroy ballots for six months after the vote counting, if they can’t be used for anything Luisa Estela?

Is that agricultural law logic?

But you can’t ask a movement with the ideological consistency of tapioca (natilla) to have any legal consistency, when all they do is twist, spindle and mutilate the law at will, any time they want to or feel like it.

And without going into the details of the law, what it says is that if you present a challenge, then the if there are differences between the number of voters, the voting notebooks and the ballots, then the process can be voided and, if material, the voting where the irregularity occurred has to be redone.

Luisa Estela, can you explain why the ballots are mentioned?

And the moment I heard Jorge Rodriguez say there would be no counting of the ballots on Sunday, I knew where things were going. If there is someone sneaky, devilish, Machiavellic  and without scruples in Chavismo, Jorge Rodriguez has to be it.  That is why Chávez liked him so much. And Tibisay’s visits to his old digs in “La Corniche” in Altamira in secret are legendary, were duly noted by bodyguards and chauffers and the word was passed along.

And we have yet to mention the rush to proclaim Maduro. In October, Chávez was proclaimed three days after he was elected on October 10th.. In this case, they had this huge rush to do it the next day, before most international “seers” left on Tuesday.

Because there are no international observers used in Venezuela only “seers“. What is normal and an international standard elsewhere, is considered a threat to our sovereignty by Chavismo.

Of course, Chavismo sent international observers to all buddy-buddy countries where an election has taken place, including Honduras, Guatemala, Nicaragua, Bolivia, Belaruss and none other than Mexico, where curiously, Chavez called for a recount, not once, but twice, whether it was a close election against Calderón, or a literal whipping of Lopez Obrador by Peña Nieto.

But again, don’t ask for consistency from Chavismo, they are not very good at it. Least of all under Impostor-President Maduro, who seems so uninformed and clueless that he said his heart could be studied with telescopes.

And despite his performance on Sunday’s election, Nicolas still wants to be Chávez’ son, imitating him, acting like him, trying to be him, a task for which he has significant limitations.

Thus, when Nicolas said today he would abide by what the Electoral Board decided on the recount, nobody believed him. Nico, you ain’t Hugo.

The result on Sunday, even if he wins by 10,000 votes, shows that his credibility has been undermined from the day Chávez named him his successor. And trying to overrun the opposition with fascism and lies, is only likely to undermine his credibility even more.

And Maduro’s stance may radicalize his supporters, but he lost the election with those that were not radically pro-Chávez who refused to vote for the opposition, but guess what? They did not stay home, but many chose instead to go vote for Capriles.

I wonder what those who stayed home are thinking now?

So, the story is like this:

Yesterday, Maduro’s team was telling diplomats and reporters that at 1:00 PM Maduro was ahead by 2% of the votes. At that time, it looked as if abstention was going to be more like 30% of the total number of voters. In the next couple of hours, participation increased dramatically, but the increase was higher in traditionally more pro-opo centers than in pro-Chávez centers. However, by 4 PM Chavismo was projecting a victory by 1-2% of the vote.

Meanwhile in Capriles’ camp, all that was being counted at that point was participation. They had the same 30% abstention projection at 1 PM, but then it accelerated and they began projecting 22-23% abstention at the end of the day. But they could see the details and the participation by 4 PM in the more pro-opo centers was 75% (top 50% pro-opo centers) versus 69% in the pro-Chávez centers.

When the Actas began arriving, the opposition counting center began seeing a virtual tie from the time it had 20% of the tallies. Essentially, within the error of the tally, it was impossible to predict who was winning. If you added the international votes, then they would get a Capriles victory.

This continued and the Capriles team was hearing that Chavismo was saying that Maduro had an advantage of a quarter of a million votes. As the night went on, Capriles decided to call Maduro and told him that his numbers were saying the race was too tight and any announcement should be held off. Maduro told Capriles that he had to check (??) and never called back. Within twenty minutes CNE made the announcement.

Meanwhile, at the CNE, Vicente Diaz had argued that no announcement should be made and they should wait to reconcile the numbers. Vicente Diaz also suggested that the CNE itself shoudl call for an audit, something it can do. He was voted down and the announcement was made.

Today, Vicente Diaz went to CNE where there was supposed to be a meeting and instead found that Maduro would be proclaimed as the winner, while the meeting in which he was going to formally propose that a complete counting of the ballots and tallies be made, was not going to take place.

Thus, Vicente Diaz decided not to go to the proclamation.

At which point I ask: Why the rush? Why make the announcement if things were not clear or there were doubts? Why rush to proclaim Maduro if he was not planned to be sworn in until Thursday?

That is the big “if”, Maduro who alraedy stars weak with a very small victory, makes himself more illegitimate by trying to be proclaimed early and while he claims he wants to count the boxes, the suggestion is this may not happen.

Meanwhile, Capriles was calling for people not to go out and protest, but instead participate in a pot banging tonight at 8 PM, as well as marches in all regional CNE’s tomorrow and one on Wednesday to the CNE to formally request a complete recount of all the ballots and comparison with tallies and the voting notebooks.

But students had a mind of their own and began protesting in many parts of the country. In Caracas, near Plaza Altamira and the Autopista, students gathered to protest. Chavista motorcycles began showing up and there appeared that there would be confrontations. Then opposition motorcycles showed up and Chavistas fortunately left.

Meanwhile, the Government sent out the National Guard, who used tear gas to disperse the crowd away from the Autopista. I managed to get a little close at that time. Here are some protesters:

And here is the National Guard holding strong to stop students from going down to the Autopista:

And here is a picture of the fires the students built to stop the National Guard from going through:

And in the only gesture of peace and conciliation of the last 24 hours, Maduro ordered tonight that the National Guard withdraw from Altamira and the Autopista.

Things are tense. Very Tense. Falcon said some Generals have been detained because they disagreed with decision to announce the results. Others tell me they are searching for Capriles’ Minister of Defense “in pectore”. The European Union, OAS, US and other UNASUR countries have sent the message they will not recognize Maduro until votes are counted again.

Stay tuned…

But I just don’t believe any votes will be recounted and ballot boxes found in at elast eight places around the country, either being dispose of or being burned suggest I will be right. Fraud is the only word that comes to mind…

Update 3:30 PM: Participation has improved at this time, it is running 4% behind October only. Lara, Anzoategui and the Capital District have much higher participation, but in this range things look difficult.

Update 1:47PM: I am told by reliable people that at 1 PM the percentage of voters that had cast their vote was running 10% behind the same number in October.

I just took my usual spin through Caracas on election day, driving from Petare to Caricuao to see what was happening. What I saw was absolutely no lines anywhere, not even groups of people in front of voting centers, of which I must have seen two or three dozen. In fact, since I remembered that the biggest lines last October were in Plaza La Candelaria in downtown Caracas, I went there just to check, but the result was the same, no lines at all where in October there were multiple lines:

Traffic was a mess in certain parts of the city. It took me longer to go around because there is an increasing trend to block an ever larger area around the voting center. In fact, in Avenida Romulo Gallegos in Montecristo, they blocked off two blocks of that avenue, which is an important street, particularly on Sundays when Cota Mil is closed until 1 PM. Took me a while to get out of that mess.

In fact, the whole thing is so ridiculous, that while I would have had a hard time taking picture of the lines, if they had been there, directly in front of most voting centers, I had no problem stopping in front of the Miraflores Presidential Palace and take a picture. The Guard did not like it, but he barely moved anyway:

There were many reports of abuses. The main one was that of the “accompanied” vote, whereby someone in the voting stand accompanies voters to make sure they are voting the “right” way. This type of vote is allowed for older people and those with disabilities, but the person that accompanies the voter can only do it once and has to sign a form. This was not being done in many polling stations, particularly in Zulia State and TV was showing videos of this being done.

But the immutable Tibisay Lucena, Head of the Electoral Board,  came on TV and said everything was peachy and rosy. That the only incident she had to report was our people eating their ballots after casting the vote and some irregularities, only a few, in assisted voting.

I did see lots of motorcyclists in groups wearing red shirts and making noise, passing in some cases near voting centers , which is forbidden. There were also many trucks with improvised speakers on top, encouraging people to go and vote, no matter who they were going to vote for. I took a picture of one of them thru the car window, at the edge of La Urbina and Petare,which I was not planning to post:

except that right after I took the picture the police pulled them out, harassing them about campaigning. I stopped to help out, which one of the cops did not like, telling me to “Circulate, citizen” (Circule, ciudadano). Right at that point a Chavista truck with songs promoting Maduro went by and people started yelling at them that they did not dare stop the Chavistas and the cops decided to leave (Not going after the Chavistas). In fact, as I write this, the son of the Rector of Universidad Metropolitana, a good friend, is detained for driving in one of these “promote the vote” trucks.

Meanwhile in El Silencio, you can see the PSUV post behind the fountains, where four or five people were distributing propaganda, which is not allowed on election day:

Everyone is explaining away the lack of lines as saying that people have voted three times using the same system since October. Others say that this is because the opposition is staggering the voting according to age. But I went to Chavista areas and just did not see lines anywhere, which leads me to believe that abstention will be high. Remember that prior to 2006, abstention levels tended to be closer to 40% than 20%. Does Chavez’ absence from the ballot indicate we will go back to those levels now?

I just don’t know, but we will know in a few hours.

So, I have been in Caracas for less than 48 hours to cast what is likely to be one of the most expensive votes (my airfare was outrageous!)  on Sunday’s elections and even pollsters that I don’t trust too much, because of their pro-Chávez stance, are trying to change my mind with their ever decreasing gap between Maduro (Who is still ahead in these polls) and Capriles.

I don’t want to throw too many new numbers at you, but two pro-Chavez pollsters and one considered to be more neutral have seen the gap narrow from almost 20 points, during Chávez’ mourning period, to single digits a week ago (all three), based on polls before Easter, to 7.2% in Datanalisis poll today, with more recent data.

And while I have never been a big Datanalisis fan, it is precisely because of that, that the numbers  are interesting. You see, Datanalisis never seems to get the abstention right and in elections where that has yielded an unexpected result, they have been wrong. Thus, when they say that abstention will be in the 20% range and the fast changing difference is now only 7.2%, I have to wonder: What if?

Because I just can not possibly believe that abstention will be that low. Chávez was loved, adored and admired, this is Maduro we are talking about now. Maduro ain’t Chávez. Even Chávez saw abstention levels of 25% in the 2006 Presidential election, where he whipped Manuel Rosales. I find it hard to believe that Maduro, will be able to match that, even with Chávez’ endorsement.

And if abstention gets into the 30% range, that 7% gap gets down to where it may be almost impossible to predict what may happen, even if I still think Maduro is likely to have the edge. But not a huge edge, maybe 3 to 5% at most.

So, what seemed improbable a month ago still seems difficult, but not impossible. Last December regional elections saw 50%abstention, but largely because the opposition did not go out and vote and somehow Capriles has managed to get people excited again.

But given that Maduro’s campaign, while improving, has been less than inspired, one simply has to wonder whether people will go out and vote for the man Chávez anointed, just because he did it.

I am a numbers guy and the numbers suggest Maduro will win by a smaller margin that polls say, but looking at just the overall numbers (which also say Capriles is more popular than Maduro, for example) without knowing exactly what people feel about the Son Of Chávez, it is very hard to predict that the outcome will be different than polls predict.

In fact, abstention has been key in promoting and demoting pollsters in Venezuela as the “best”, to the point that not one can claim to have predicted each and every election and referendum result since 2006. Every single time, one of them has miscalculated and the number that did them in, was precisely misjudging the abstention level.

Give me 20% abstention, Maduro wins easily. Give me 30%, things get interesting and unpredictable, but cheating and tricks still make it hard, give me 35% and we are into Black Swan territory.

I think it will be closer to 30%, making it close, but with Maduro holding the edge. If less, game over.

It is hard to write about what is going on down in Venezuela. Today was the last day for the publication of polls, and I have yet to see a single reputable poll where Capriles is even close. Strange, when Capriles faced Chavez in October, he would beat any Chavista handily, but now Chavez anointing Maduro gives him the lead. Must be that sympathy factor, but I feel it less and less.

On the other hand, I think that it must be really difficult to predict what will happen with abstention. Even the opposition has doubts about whether its hard core voters will show up on April 14th. My bet is that the opposition is more militant. The hardcore Chavista voters will go and vote, the hardcore opposition voters will also go, the question is what about the rest? Chavez is simply not involved this time around: Will PSUV manage to execute its magic this time around with the Sai Bab follower? Somehow I doubt it, but at the same time, I also doubt abstention will be sufficient to have Capriles win.

Not one of the pollsters predicted abstention below 20% last October. That made a huge difference. Now, I hear the opposite, that most pollsters are seeing less than 20% abstention. What is going on here? When Capriles was running against Chavez, abstention was measured at 25-27% in most reputable polls. Now Chavez, the ultimate vote getter, is not involved and people say they will go more than ever?

What gives?

I just don’t believe it. That gives me some hope, but at the same time articles like the one in El Nacional today (page S1) telling us how PDVSA is organizing the get out the vote drive, make it difficult to be optimistic.

Hard to believe that PDVSA can’t get oil out of the ground, but can coordinate that every public worker will vote and vote for Maduro…But, of course they could care less about oil production, ballot stuffing is much more important.

I do hope there is a blackout on the 14th. to screw up their plan.

The problem is that they have many plans, like the discovery that the passwords for the BIOS of the machines were in the hands of two PSUV members. Irrelevant, but the Government played it well, as a way of discouraging opposition voters.

Spain’s El Pais says that today’s march was the biggest since 1999. I would love this to be true, however, I wonder what march they are referring to in 1999. That year, opposition marches were actually small, if not tiny. A headline saying since April 2002, would have been more accurate or significant.

Capriles did well today. His speech was believable, humorous, he was very confrontational, which seems to do well with the more radical opposition he avoided last year. I don’t think he will get the Chavista vote, but I don’t think that is the idea, as long as they stay home, he has a chance. The march had to be huge, I have never seen people march “vertically” like in this picture:

And I think lots of Chavistas will abstain. Maduro is a lightweight. Much less impressive than I ever thought. He has been trying the spiritual stuff, he even tried to curse us via the Macarapana curse, but I am not sure that plays well in the dense barrios of Venezuela’s largest cities, which is where the 2007 referendum was won.

But in the end, the curse may be on Maduro if he wins. He has to become radical on the economy to change things, but at the same time he has to watch his back over those who want to replace him within Chavez’ PSUV party. Not an easy path to take. Damn if you do it, damn if you don’t. Capriles’ job will be just as difficult, the difference being that he will start from scratch and review all policies from scratch, something Maduro is very unlikely to do.

The economic task is difficult, but not impossible, nor improbable. Cut or reduce Cuba off. Cut or reduce PetroCaribe off. Triple gas prices to go from free to free. Create a single exchange rate with bells and whistles and you might cut the black rate in half. Lower yields on debt and buyback stuff and reissue debt at cheaper rates. Reduce subsidies to non-functioning Government enterprises. Create checks and balances. Put corruption in check. Have everything go to international reserves by eliminating parallel funds. Don’t buy any weapons…

So easy to dream, so hard to envision it…

Wow! I was shocked to read the international press today. Apparently, Hugo Chavez is not well. Something to do with his health. Look up Hugo Chávez in Google and the fact that Chávez is not going to Brazil, apparently induced some people to believe that this creates “speculation” and “fears” about his health.

Where have all these guys been?

Let’s see: The most outspoken, unstoppable, self-centered, ego-centric. ego-maniac. media-oriented, superficial, blabber mouth, show-off politician ever to hit Venezuela, all of a sudden:

Disappears from the media. As a matter of fact, his last “live”, “live” appearance was only 59 day ago when he held a press conference with real people present after being reelected. There have been some less “live” appearances since then. The last one was exactly 21 days ago. Except in all of them, he was seen only seated at the Cabinet table, with no outsiders present and even in his lengthiest broadcast, he spoke for less than a third or fourth of the average time of his usual ramblings.

And then, he just fails to make any of these “live”, controlled appearances since November 15th. and on November 27th. he surprisingly says he needs permission to be absent from the country “indefinitely”, in order to go to Cuba to get some sort of mumbo jumbo-hyperbaric-Cuban-tried-and-tested treatment for whatever ails him.

And all of this happens in the middle of a very significant political campaign for Governors, where his presence is essential, because he selected some people like these cone heads below, with his own mind and finger, to be Governors:

and somehow their campaigns are faltering because they are not from, nor do they live in the states that they are running for Governor (and the two on the right are sooo stiff!) and silly Venezuelans seem a little unhappy about that.

So, what makes these reporters think something is wrong with this guy’s health? How do they do their reporting? They call Miraflores and ask Maduro how Hugo is doing? Or do they call Raul in La Habana and ask (He probably knows more)?

Because the only basis these guys had for imagining that all was sort of ok with Hugo in the last few weeks, was the fact that some press guy in Itamarati, Brazil’s Foreign Office, said that Chavez had confirmed he would be present at Venezuela’s first ever Mercosur Summit as a full member, which starts tomorrow. What they failed to note, was that the “confirmation” was received twenty days ago, before Chávez had stopped his “live” appearances and two weeks before his now infamous request for an indefinitely leave for medical treatment in Cuba.

So, today, because he is a no show in Brazil, the international press seems to have deducted Chavez “may be” or is “feared” sick.

Way to go international press! (Except for my buddies at Bloomberg, who seem to be on top of things)

Meanwhile “markets” and “investors” seem to be more on top of it. Below, I show the “benchmark” Global 2027 bond and what it has done ever since Chavez took his “leave”. (Other bonds have done even better) This is the same one that Quico said he would not buy and he is not too dumb a fellow, but he could have made a bundle of yen with it, had he not unbookmarked the Devil on his Japanese sojourn:

As you can see, the price of the Venezuelan Global 2027 bond  was just plodding along, drifting up and then right around Nov. 27th. (Funny, the day before Chavez’ announcement, actually!) the price of this bond starts moving up like crazy and goes up more than 10% since then, closing at 100% today for the first time since 2008.

Bonds usually don’t do this on rumors, only on facts!

So, these market guys seem to be on to something. Yes, they go up because Venezuela should yield sort of like the Ukraine, which would shoot the price of the bond up another 20 points or so. Except that things are not that linear in Venezuela. The road will be bumpy one.

To start with, the bet is that nobody can be as bad a Minister of Finance than Giordani. If Chavez leaves, a “real” economist will come in and will never do as bad as the current Minister of Finance.

Wanna bet?

Until Chávez named Jose Rojas Minister of Finance in 2000 or 2001 (and he was an economic statistician), the number of “real” economists that had held the position was less than the number of engineers, sociologists and mathematicians combined that have held the position in the last twenty years. Economists are considered to be like Astronomers (Or is it astrologists?) in Venezuelan political circles.

But I digress. Because even more dangerous, is the fact that the path, if Chavez is a no-show on Jan. 10th., is filled with uncertainties and possibilities. Just about everyone could be President on Jan. 10th. if Chavez no-shows (not me!), because the new President of the National Assembly will be selected on Jan. 5th. and Chavez and PSUV can truly name anyone they want to the position.

Think absurd: Even the Fosforito.

And yes, the Constitution is clear, elections have to be called within thirty days. But that’s all it says. Really. So, imagine new President Chavez (Adan)/Maduro/Jaua/Rodriguez/Cabello (Did I leave your name out?) on February 10th. calling for elections on say, December 10th. 2013 or 2014. Why not? I am sure the Chavista Supreme Court would go along with it, even if the opposition and all of its mud rejects it.

And BTW, dear international press, now Maduro is the pro-Cuba choice? Have you met or talked to Adan?

So, the road to riches, even if you are smarter than reporters from major international newspapers, is also filled with potholes going forward. The “easy money” will end the day we know the truth about the autocrat’s health, whether good or bad (which depends on which side you are on)

After that, it will be a rocky, stony, bumpy, potholy, spiny, filled with nails, path of uncertainty and the end is almost impossible to guess. My guess is Hugo is not well at this time. They may be trying to prop him up one more time so he can be sworn in on Jan. 10th. and the charade can continue. Or he may be close to done by now. I dont know. But I hope they don’t succeed.

Venezuela deserves better. And I will not miss him.

And now he reappears, talking poetry, calling himself Fidel’s flame (no comment) in a carefully controlled video. His arrival was not shown live, but he is back. The mystery deepens. Something was clearly not well, something happened. Now we have to watch how much he participates in the campaign

A few years ago, when Chavez announced that he would start a national airline again, I wrote a post criticizing the move as another waste of money in a country with limited resources and a lot of more important problems than having a flagship Government airline. My reasons were many, but it included the fact that the airline business is well known to be a very difficult one, as recurrently even the best run airlines in the world go bankrupt or close to it, when conditions are adverse. Add to that the history of Venezuelan airlines, both private and Government run, together with a bunch of inefficient military officers in charge and I could see this was a boondoggle Venezuela did not need. Many of the more pro-Chavez readers jumped on me, saying the country should have an airline and flying in it was more reasonably priced than private airlines.

But in time, Conviasa has shown to be an even bigger failure than I ever dreamed of. I never thought we would see so many accidents. Seven serious accidents in such a short life is unheard of in the world of airlines, no matter where they come from. This shows how this Government is so indifferent to the value of the life of its citizens. Then there is the fact that Conviasa bought a bunch of Brazilian Embraer planes for US$ 90 million, which somehow the Chinese buy for half as much according to Gustavo in the same link as above.  And to top it all off, last April Venezuela was put on the no fly list by the European Community, a ban that was reiterated this week.

But rather than find out about how to get off the list, the Government blasts the European Union and criticizes more the fact that the ban is called a “black list” and thus racist, than the actual reasons for the ban. Even worse, in this Bolivarian revolution world, where profits don’t matter, Conviasa has been using airplanes from Santa Barbara Airlines (A Venezuelan private commercial airline) and ¡Fin de mundo! a US airline called Vision Airlines, in order to continue flying to countries in the European Union. If Conviasa was losing money before, imagine doing it having to pay someone else to do the job!

Economics is about optimizing scarce resources. In a relatively poor country like Venezuela, that optimization is even more important. The worst part, is that Conviasa is still flying, money is still being wasted, without any rationale for it. At least other Chavez boondoggles like Venirauto, stopped being much of a sinkhole. While supposedly the company is still functioning, here is a picture of some vehicles waiting to have the natural gas system installed before the cars are sold:

Not pretty, no? At least nobody died…