The Devil's Excrement

Of course the Government will not take advantage of its position and campaign for the President. The Electoral Board will simply not allow it, we are protected by law and the Constitution. Chavez can stay in the Presidency as a candidate, it is a matter of continuity and he is a good guy, he would never abuse his position or take advantage of it.

If by any chance the Government tried to sell toothpaste packaged like the one below in the Government’s Mercal chain of markets it would be immediately stopped.

What do you say? They are selling it already? Just like that? And it has the symbol of the ten million votes for Chavez campaign? And it says ten million smiles? And all Mercal’s are carrying it?

Oh well, I guess I was wrong.

This letter
from Laureano Marquez in today’s Tal Cual reflects a lot of the thoughts
that went through my mind when I first noticed the enthusiasm of some people
with the candidacy of El Conde del Guacharo. The difference is that Laureano
Marquez can express things in such an exquisite way, that I am just no match for
him. It was not easy to translate because of the idioms and slang used by
Marquez. Hope it works.

The more I
hear about El Conde’s candidacy, the less I like it, the more concerned I get. When I hear Mari Pili defending it, Chavez’
campaign Manager saying that it is the only serious opposition candidacy and
former Chavez’ supporters
saying he is going to rise to the top of the polls, I can’t help but wonder
what is behind all this. There are too many unanswered questions for my taste
and it is so easy to hide behind the words of humor when serious questions are
asked. The choice is simply brilliant. But very few answers are available despite the widespread media exposure of the novel candidate. In fact, there seem to be more questions as the days go by. I don’t believe in conspiracies in
general, but somehow I can see the following in our future:

–The
opposition primary goes reasonably well on August 13^th.
–The CNE
approves the use of the fingerprint machines for the December election.
–The opposition
refuses to go to the election with fingerprint machines present.
–Presidential
elections are held in December with three candidates: Hugo Chavez, Benjamin Rausseo
and Roberto Smith.
–Chavez
either beats Rausseo or gets the CNE to do it for him and the revolution and
the next 6^n years of Chavez are legitimized.

Paranoid? Stupid?
Silly?

I just don’t
know, we will have to wait, in the meantime enjoy Laureano’s not so humorous
piece:

Letter to Er Conde by Laureano Marquez

Sorry for
this letter, but you know better than anyone that there is nothing that us
humorists like to do more that to pick on politicians.

I got quite
enthusiastic with your candidacy while I thought it was serious, like that of
Zapata at the time, but now that I see that it is just kidding, the truth is
that I am disappointed.

In any
case, this shit is not with you, Conde. I don’t question your thirst for power

You have
all the right to do it. The trouble is
with ourselves. To say it in your style: this shit is a self-conflict. I thought
that after seven years, we would have assimilated some lesson of what happened
to us and, nevertheless, I see people that voted for Chavez and now hate him to
death, using the same arguments which they, at the time, used to justify him:
the old tale about the anti-politics, the outsider, the leader that. As if
politics was not a matter of projects, vital vocation, of the road traveled, of
long and extensive militancy of ideas, of profound reflection about the destiny
of man; in the end, a matter of politics.

Your
candidacy has aroused the furor of the opposition world. Coño, Conde, I just had
a flashback to the 1998 movie, the same shit:

That you
are the expression of dissatisfaction, that we have to give a lesson to the
leaders, that even if we lose anyway, with you we are going to have a ball. Of
the latter, I have no doubt, Conde, but in the end, the victory of Chavez will
take place in the middle of all the joking, criollo and with gusto, which will
make it easier to get along with and accept the installation of his
authoritarian political project. I think officialdom is conscious of this and
that is why they are excited about your campaign launch. “Venezuelans like to
kid around”, they say and who better than you to be their leader. When we wake
up from all the kidding around, my dear friend, when we get over the drunkenness,
an accomplice of the petrodollars we have negotiated for our destiny as a
nation, then we will see in action the only leader that truly has a clear
project.

In all of
this you will end up being a sort of electoral Vaseline.

The
reception that you have been given has served me well to ponder the magnitude of
what awaits us in the bosom of XXIst century socialism, because we are so
removed from the tragedy that is closing in on us. The electoral phenomenon, in which
you have turned yourself into, instills in me the certainty that this society
does not deserve getting rid of Chavez; we have earned him in the end. It is
like Moses’ journey through the Sinai, there is a generation of adorers of the golden
calf that has to disappear from the desert to see if next time around it
deserves to enter the Promised Land. Let us not lose hope, our grandchildren
will see it.

I am sorry
Conde. You know that this shit is not with you. This letter is, like I said
before, a matter of self-conflict.

At this
juncture, on top of that, it is not you; it is our history, our destiny, a sort
of Hegelian synthesis.

That is
why the funniest of the Marx brothers, Karl, pointed out that when Hegel says
that the important events in history repeat twice, he forgot to say that the first
time is as a tragedy and the second one as a farce.

Good luck
Conde, forget what has been said. Don’t get pissed at me, because I don’t want
to be the first one to be politically persecuted in your Government. If you
decide to change sides once again and go back to humor, we will be here waiting
for you with open arms. As always.

This is a tale of what is going on
behind the scenes in the robolution. It is emblematic of the lack of
transparency in the Government’s finances, how millions slosh around from one
side to the other without anyone checking where they are, how they went from
here to there or why they were moved. This is the tip of the iceberg of the
stories we hear about daily, except that the details are never known. In fact,
this case is known only because someone was killed. And even then, the Government
has revealed very few
of the details of the case. After all, it is just US$ 45 million that went
missing, while they are used to talking in hundreds of millions if not billions
and people are getting very rich in the process as these funds move around.

It all began in 2001 when the insurer of the local bank’s deposits FOGADE, sent US$ 45
million to French bank BNP for investment. Apparently, nobody seemed to follow
up what happened to this minuscule amount until May of this year when
supposedly US$ 2 million in a CD was due. Except that at BNP nobody knew
anything about the US$ 2 million, let alone the original US$ 45 million and the
proceeds from investing it.

When BNP was asked about the funds all they could say was that the money had
been transferred to an institution called CLBS, which had been the one
providing FOGADE with updates and the statements, not BNP. How the money moved
from one to the other or why, has yet to be revealed.

CLBS was made to appear to be a foreign company, but in reality it seems that
it only had a single office, the Caracas
office from which a local broker managed money for various institutions.
Problem was, the man who ran that office and who was apparently associated with
BNP at one point, was gunned down in the Las Mercedes area of Caracas
in April by two men in motorcycles in what was clearly a gangland style hit.
Since then, the office of CLBS has been closed and reportedly the associates of
the broker who ran it have all left the country.

Besides the ease with which the money was moved, there is also an apparent
connection to the bankruptcy of Refco where many local institutions had custody
of their instruments because of the very generous conditions that company gave
them when lending them money against their holdings. In fact, the murder of the
broker and the FOGADE funds may simply be unrelated, even if all the funds may
be in the Refco accounts under bankruptcy proceedings.

So now, the same Superintendent of Banks who told us in non chalant fashion that the
Refco bankruptcy would have no impact in the country’s financial institutions
has initiated an investigation. Will we ever know? How many other cases are
there? The truth is nobody knows as money is being shuttled around in the
billions with no transparency. In fact, FOGADE had stopped working with BNP in
2000 as the then President had heard rumors of monkey business with the local representative.
As a new Head of FOGADE was appointed the new account with only US$ 45
million was opened.

This is no isolated case, this is
the case that was discovered, but as I said in the previous post, the
development bank Bandes exchanged US$ 1.5 billion in 2004 and 2005 via the parallel
market benefiting their friends, including some that were involved in the
FOGADE transaction. The new development bank Foden is given the central bank’s
reserves which it uses to buy US$ 3.1 billion so far in Argentinean bonds, of
which US$ 2.5 billion has been sold in the parallel market at an average rate
of Bs. 2370 per US$ by the Government to their friendly financial institutions.
While the Minister claims fake profits of US$ 200 million, it is the friends
who are making a bundle. And these transactions have been rumored for months
but were only confirmed recently by the Minister himself.

These are the obscure ways of the robolution. The inner circle and friends are making millions if not billions and only once in a while we get only a peek at the edges of the transactions. And some fools are still silly enough to believe in this farce.

So now, Deputy José Albornoz wants to
go after Sumate. According to this incompetent Deputy, Sumate violated the
Law of Foreign Exchange Illegalities when it received dollars in 2005 and did
not go through the Foreign Exchange Office CADIVI. Well, Sumate says they
received Bolivars, but the point is irrelevant anyway, because that law went
into effect on October 14th. 2005. You see Exchange Controls were imposed in
February 2003, but there was no law that established punishment for exchange
control operations. The law was introduced in April of 2003, but thanks to the
inefficiency and ineffectiveness of the National Assembly controlled by
Chavismo, it was not approved until last
September, only two and half
years later. The law clearly states in its transient articles that it goes into
effect 30 days after its publication, which took place on September 14^th.
2005. Until that day, you had to go thru CADIVI to get dollars, but there was
no law penalizing foreign exchange operations.

But I do find it interesting that Albornoz cares so much about the
Sumate funds, some one hundred thousand dollars, while the Government’s
Development Bank Bandes, presided by Minister Merentes at the time, exchanged
some US$ 1.5 billion, between 2004 and 2005, of the PDVSA social fund via the
parallel market in a total non-transparent way using “friendly” banks, but this
does not seem to get the attention of the Deputy who
was awarded today the “Sleazebag of the week” award by Daniel.

This is pure and simple political persecution of the enemies of the
regime. Sumate is a threat to the Government. They almost succeeded in the
recall referendum, revenge has to be extracted at all costs.

(Note added: In fact, even after the law came into effect, it left opened the use of any form of security as a way to exchange dollars. Thus Sumate could legally change dollars via CANTV shares or swaps of securities. As a matter of fact this is what the Argentinean bond sale to the banks does. The Ministry of Finance sells banks and financial institutions Dollar bonds for Bolivars and this swap is perfectly legal under the same law)

I was going to avoid talking about the candidacy of El Conde del Guacharo, but many people have written to me asking what I think and there has been some comments below on it. My answer is simple: I pass. This guy is Chavez without the military uniform. Same style. Same promises. Is he good? Yes, he is an entertainer and he has assumed that role well, but there are no magic solutions and I just can’t have hope that he will be a good President. No matter what people suggest and say, I am sorry, I just don’t believe this man is qualified; the same way I did not believe Hugo Chavez was qualified. Nothing he has said convinces me that I am wrong. Businessman? There are hundreds of better and more succesful ones. Humble origins? There are hundreds of better qualified people of humble origins. They may not be entertainers, but they have more experience and sense of what needs to be done and who can do it. Take out the fiery retoric and he is Chavez redux.

I think his candidacy is an unnecessary distraction. I will not take him seriously. One clown as President is enough for my taste during our lifetime, even of this one does not have a military uniform…I simply pass…

Even though I am late to the game, I can’t help but comment on our
illustrious President visit to Belarus.
In my opinion, there was never a Chavez visit that could be as justified as this
one. Think about it. Chavez has more affinity with Lukashenko than with Fidel,
Gadafi, Mugabe or any of the autocrat/dictators that our esteemed President has
visited in the last seven plus years of the silly Bolivarian revolution.

And it showed. He congratulated Lukashenko for neutralizing the
opposition, for those that do not follow Belarusian affairs, this “neutralization” has consisted
of brutal attacks on peaceful demonstrations,
jailing of opposition leaders and the manipulation of elections to guarantee
that results will not go against the autocrat. Sound familiar? In fact, Chavez
called these protests a “new imperial format” and said he was ready to
neutralize them in Venezuela,
because “they are attempting them in Venezuela”. You have all been
warned!

Given the common track record we can obviate such details such as trade
between the two countries being of the order of the cost of the trip. The
difficulty of significantly increasing it, since Belarus’ energetic needs can easily
be supplied by its neighbor at more competitive prices.

But there are other hidden affinities. The Belarusian President could
not have said it better referring to Chavez: “ou
are versed not only in the economy of Venezuela
but in the Belarus
economy as well, you know military science, the military-industrial complex, and
this impresses me very much”.Well, we may not be so impressed with Chavez’
understanding of the Venezuelan economy, but he is definitely a man of war, a
man of weapons, a true military autocrat.

Lukashenko is a man with interesting opinions, such as saying that
Hitler’s policies “weren’t all that bad for Germany”, although he never
explained which part of the policies he was referring to, but stay tuned, he
may explain it someday. He is also a man of weapons, like his Venezuelan
counterpart, remembered for giving his country’s tennis players pistols as a
gift as they elft the country to represent it in the Davies Cup. Fortunately,
they did not bring them to their matches.

But perhaps Chavez’ true reason behind the trip was to learn more about
referenda in Belarus.
You see, Lukashenko has led a parallel life to Chavez’, without the need for so
many elections or a Constituent Assembly. He went the shorter route, simply
holding a referendum to extend his term from 5 to seven years in 1999 and another in 2004 to eliminate
the two term limitation on the presidential term. Maybe Chávez wanted to know
how this was executed or simply how Lukashenko has handled not giving a damn
about those appearances that Chavez seems to worry about so much, after all, Lukashenko
has no relationships with the European Union, belongs to the anti-Bush bashing
club and could care less about international opinion, except that for that of
his nearest neighbor Russia. Chavez could use some tricks from his book as he
becomes Venezuela’s
lifetime President.

The similarities go much farther than all this. Lukashenko also yearns
for an agricultural country, for the days of Governments that imposed “more
discipline”, the glory days of military achievements. He has looked for
military alliances in his region, talking about a “Slavic NATO”. The parallels
are simply uncanny.

Hopefully both autocrats will not last until they die, as they currently
plan. Hopefully, the forces of democracy will remove these autocrats from their
positions. Unfortunately, it does not look like this will happen in either
place anytime soon. But clearly, it takes an autocrat to know another one.

After taking off a few days for the long local weekend, because yesterday was a holiday, I come
back to find that the revolution is indeed marching on in its reckless attempt
to ruin Venezuela:

–Since what the country needs is more and better education, the
Ministry of Education has
decided that to reach the rank of “Titular” or “Full” teacher in elementary
or secondary schools, you will need to show that you have received your
“Bolivarian” education. At the same time to reach this level will be easier,
you will no longer be limited if you don’t have a Bachelor’s degree, but you
may also reach the highest academic level of the primary and secondary school
system if you only have a three year technical degree. Lower standards and
political indoctrination are supposed to bring better education. Just the
opposite of what I thought, but you know, I am in the opposition, that must be
why I don’t understand.

–We were told a week ago that the damage at the Paraguana refinery was
limited and the Amuay plant that burnt would be back on line in a short time,
at most two weeks. The media was even accused of creating a scandal out of the
fire, exaggerating the damage for political purposes. Well, we now read that
PDVSA is telling people it will be at least five months before things go back
to normal that the crude unit was destroyed and the whole thing will have to be
rebuilt. That’s exactly what the “lying” experts of the opposition said a week
ago, but what do they know anyway. (Even us non-experts thought that tower
looked too black!) The truth shall make you free! Not in the revolution!

–The Government Development Bank Bandes purchased the Uruguayan Credit
and savings coop for US$10 million, which will be converted to a branch of the
bank. Well, the latest financials of the coop say
that the coop has negative equity and it has lost US$ 1.046 billion in
deposits since February. I guess this has gone from solidarity to stupidity at
the expense of stupid Venezuelans. I like the business plan: Take over a
bankrupt financial institution in a country you have no experience with and have it run
by people with no financial experience. A recipe for financial disaster for
spreading the goodwill of the revolution! More losses in the name of
solidarity! Less money for Venezuelans! Not even the Chavistas can understand
this one.

–The Mayor of the Libertador district of Caracas said
today that to solve Caracas’
problems he would need 20 years and would have to get rid of one million people.
I have a few questions: Did he mean 21 years? Is he using crime to get rid of
the people? When will he start working on solving the problems, it has been six
years of him already? I guess I am more impatient than that, I have been waiting at
least double the years he says and see no progress, before during or after. In fact, I think things are
worse, but once again, I am in the opposition.

–Chavez had
offered Ecuador to begin refining 65 thousand barrels of oil a day of that
country’s crude. There were problems
signing that agreement with discrepancies over the terms and now
we hear that Ecuador
is asking for international bids for refining 15 million barrels of oil. That
is Chávez’ problem, he does all these things and then his underlings screw it
up. The question is why the underlings are always the same ones and they never
get fired, just rotated. Remember Petrocaribe? Well, there
are big problems with that too. If only Chávez could do everything himself!

–Minister of Justice Chacon in union radio (can’t find link): “We need to restructure the judicial system”. I thought that was one of the biggest achievements of the revolution. Didn’t Chavez’ emergency comitte to restructure the judicial system fire over 500 judges, naming some 400 “temporary” judges that have yet to be ratified, including a convicted murderer? So why seven years later do we need to restructure again? Wasn’t the current Ambassador Manuel Quijada the architect of that restructuring? Did he not do it right? I guess I must be mentally impaired, after all I am a member of the opposition, but I just don’t quite understand. I guess it must be the fault of the first part of the Vth. Republic or some excuse like that.

—Big demonstration in front of Conavi, the office in charge of housing. Those protesting are mostly poor and mostly Chavista. Nothing in the “official” media about it. I just wonder when the Government carries out it’s threatened cancellation of the licenses of most private TV stations, who will carry these type of news? Can it be that he Chavistas did not experience the major traffic jam Caracas witnessed today? I guess not, they must have been walking, flying around or boating in the Guaire river, rather than in buses like the opposition. (The subway itself has problems and will continue to have them until Friday)

I was talking about Argentinean bonds before it was fashionable, this is part of the evident levels of obscene corruption taking place in the revolutionary or robolutionary Government. Of course, those that support the Government are always quiet about these posts. In doing so, they become accomplices.

Here is an article from today’s El Universal by Oscar Garcia Mendoza who I have translated before. I think the daily volume is slightly smaller than he says, but except for that detail, the rest is a clear explanation of the levels of absurd and obscene corruption and enrichment taking place in this Government. Those that became Chavistas because they opposed the corruption of the Fourth are surprisingly quiet and silent on these topics. Why? It hurts to much? The truth is that the level of corruption has increased by orders of magnitude as the Chavistas cheer on.

Oscar García Mendoza, Argentinean Bonds

Since January 2006 when the Financial Times denounced that two Venezuelan banks (with full names) had negotiated with the Ministry of Finance and with important gains, Argentinean bonds, the so called Boden 12, a lot of questions were raised, but few answers were given. At last the Minister gives us some clues. Evidently there was no transparency, but we could not expect it otherwise.

Now we have something. In the operations the Government made US$ 201 million, says the Minister, through negotiations in which dollars were sold at a weighted average of Bs. 2,380 per dollar. Without pretending to be mathematicians, but being a banker, it is evident that all that was done was a simple foreign exchange operation. Without the price of the bond changing at all or very little, there was a “benefit”, by manipulating the exchange rate.

Explanation: in the regular foreign exchange transactions, in Venezuela, as well as in the rest of the world, the difference between the purchase and the sale price is very small (before exchange controls, in the 80’s you would buy dollars at Bs. 4,2925 and would sell them at Bs 4,30, with a gain to the foreign exchange operator of 0.175% who was happy because he was making a good profit. (With the current exchange controls, the difference is between 2.144,60 and you sell at 2.150, a gain of 0,25%). Now the Minister acting as an “investment banker” tells us that he made a “profit” selling at a weighted average of Bs. 2,380. Here, my esteemed and ached readers, the gain for the Nation, was based on the manipulation of the price of the dollar which is fixed at Bs. 2.150. It would have been a true gain if the price of the sale of the Boden 12 had gone up from 77% to 90.40% and they had been sold in the international markets.

But there is something worse. That price of Bs. 2,380 at which the favored banks buy, gets transformed to roughly Bs. 2.650, because the banks sell the dollars that result from the transaction in the parallel market, euphemistically called in the slides of the Minister “TR: the reference exchange rate (taken from the Reuters screen or the CANTV ADR’s)”, generating for them an enormous gain. Once again, without being a mathematician, if we extrapolate the data of the Minister, the gain for the banks in the period must have been between 190 and 240 million dollars or between 503 and 636 billion bolivars. Which is pretty good for companies accustomed to make percentages of 0.25% as we mentioned above. In this case the percentage is around 11.34%. That is, 45 times the gain, which exchange controls allow. Not bad, the beneficiaries must think.

To give a clear idea: It is said that each week US$ 90 million of BODEN 12’s are sold. If the gain is 270 Bolivars for each dollar (2.650 minus 2380) the weekly gain for the favored banks is Bs. 24.3 billion. Note, every week, week after week, month after month. In six months the exchange gains for the banks must have been in this semester (including those that did not participate) was Bs. 1,316 billion. That is, in all of these operations they made more than half their earnings. Question: Why doesn’t the nation make this gain for itself?

The permanent deception in these operations, the harm to the public is of unheard of level of seriousness. But nothing will happen. The Government’s operations are totally covered and sealed. A few gain, the majority is harmed.

While the press has concentrated on saying that the problems with the Electoral Registry were found to have no incidence on a possible presidential election, this is not exactly what these institutions concluded. What was actually concluded had a lot of caveats to it. First of all, it was explained and clarified that the study had limited access to all of the information that would be necessary to perform a proper audit of the REP. This included the absence of addresses for those registered or the information of when the person either registered or changed the data in the registry.

Within these limitations, the study concluded that the anomalies found in the REP could npot possibly have an incidence on a presidential election to teh extent of chaging its outcome. However, it could change the outcome of regional elections.

Additionally the study found:

–There are 107 municipalities (one third of the total) where there are more voters than inhabitants over the age of 18 as projected by the Government run National Institute for Statistics. This anomaly appears to be uniformly distributed over teh whole country.

–The irregularities increased since the Government registered more people to vote in 2004 as well as giving them ID cards.

–Anomalies by age group, particularly in the range 45 or older.

–There are significant anomalies when one looks at the statisical distribution of bithdates across the board.

–Four states show anomalies which are more significant now than they were before the three million new voters were registered: Miranda, Portuguesa, Zulia and Lara.

–No correlations were detected within the limitations that implied any correlation by political preferences.

–The results will only be conclusive if other tests could be performed with a complete set of data.A more exhaustive study with more data provided by the CNE could be conclusive.

–Many of the errors have been around for years, are significant, but appear to have a uniform distribution and thus no material impact on a presidential election.

–There is no explanation for the excess voters that is reasonable.

Thus, the conclusion is that within the limitations of the study, the problems of the REP detected could not change a Presidential election.

Many of
you have been asking what I have been up to. Life has not been good to this
ghost. First, my favorite soccer team was eliminated from the World Cup. Then
my tocayo (probably a distant cousin) was no longer the manager of the team and
next, my tomato plants were not growing as expected.

The good
news is that Miguel has been getting so many complaint messages about my
disappearance that he has begged me to please do something about it because not
even Gmail can contain so many emails.

So, in
spite of the fact that I swore not to come back until I was allowed to open the
tomato section of this blog , I decided to please my fans, get momentarily out
of retirement, and accept Miguel’s invitation once again.

The day
started in a cheerful way since I am always happy when I learn that old friends
are coming back to visit. In fact, browsing the dayly news this morning, I came
up with this news.
You read it right: it says that the Canter
Center was coming to Venezuela to
observe the REP audit that is being carried out by the Universities invited by
the CNE. I was so happy to hear that the CC was coming to town that I quickly
went to the CNE site and I got confirmation of the news (see here).

The press
release from the CNE indicated that the Canter Center
invited themselves in a letter addressed to Tibisay Lucena, the “new” CNE
President. And that Lucena had accepted the CC as an observer.

But that
was this morning just before I left to do errands for my tomato plants. When I
came back home this afternoon…surprise surprise!  El
Universal reported that the Carter
Center is not coming as a
formal observer.  In a Press release, the CC said that they
should have been formally invited by
the CNE with enough time to send their personnel, which was not the case. It
seems that their representative in Venezuela, Héctor Vanolli, is going
to informally hang around the audit, but that cannot be considered a formal
observation.

So my
first observation is that I am happy to learn that one can observe things two
ways: formally or informally. In the formal observation, one is formally
invited to get a seat and observe. In the informal observation, one is
informally invited to get a seat and  informally observe what is going on.

What? You
don’t see the difference?

Of course
there is one difference (like in the ACE commercial). If  the informal observer finds something wrong,
it does not count, because it is informally wrong. Not so when you are formally
invited to be a formal observer, in which case whatever you observe as wrong is
then formally wrong.

Clear,
isn’t it?

But now,
the real question. What happened between this morning and this afternoon?

If you got
any formal or informal ideas, you are welcome to post them in the formal
comment section.

Formally reporting
from Cyberspace,

Jorge
Arena

Ghost
Blogger Emeritus.