The Devil's Excrement

This is a real picture right outside Sabaneta, where Chavez was born:

Sabaneta

Birthplace of Hugo Rafael Chavez Frias

“We apologize”

Working up to today the 24th. which is the day that most Venezuelans really celebrate, having dinner together in the evening, has delayed me getting into the Christmas spirit of wishing people a Merry Christmas. So here we are.

One of the most fantastic aspects of having a blog has been to me the amazing number of people that come read me everyday and care for my well being and that of other bloggers as Daniel’s case recently demonstrated

Things are not well in Venezuela, but Daniel is much better and tonight and tomorrow we try to forget about politics, ignore the bad things and enjoy the good ones.Tonight, enjoy your family and have a peaceful moment with them. Hope everyone out there has a wonderful Christmas wherever you may be in the world and that you enjoy tonight and tomorrow and find many reasons to smile, laugh and love those around you. You can be sure I will do the same!

Merry Christmas everyone! And many thanks for reading me!

Churum Meru: Another great Chavez project

This is the slow season of the year. Politicians go away and not much happens in Venezuela, except that Chavez does stay. But if he can merge together three failed banks due to the negligence of his administration, put them together with another Government Bank, rename it Bicentenario and have a nationwide televised address to hail the opening of the new Government bank, I can write a Seinfeld post, a post about nothing. Or is it?

I mean, he had another “Cadena” today, because the Government bought a storefront from a fast food chicken franchise, they repainted it and opened a “Socialist Arepera” whatever the Hell that means other than arepas are cheap, for now…Because in a couple of months the Government is going to forget that Chavez liked this project and these guys are going to either have to increase prices or shut down. Of course nobody noted that the “cheap” Bs. 5 arepa, buys you over 50 liters of gasoline in revolutionary Venezuela, but who was asking anyway? Now, that gas is really cheap!!! Ask anyone in the world, even in Nigeria. Pass the arepas…

But the best news was that the Head of the Consumer Protection Agency (Indepabis) Saman, said he would work for free four  hours a week at the Socialist Arepera. Well, good for him, Saman is another one of these Chavez fanatics, who before Chavez discovered him who knows where, paid no income or social security taxes, so now, at last he will do an honest day’s work, even if only four hours a week. Well, he has to start somewhere like everyone even if he is past forty, no?

And in another Chavista strategy of let’s attack the effect, rather than the cause, shopping centers will only be provided with electricity from 11 AM to 9 PM to save energy, killing movie theaters late at night. I do wonder what will happen to my place of work, which is in a shopping mall, how do you distinguish electrons going to the shopping area or to the offices? At the same time, being a night owl, would love to get in at 11 AM every day, but I bet this is just wishful thinking.

And I am sure than in a couple of months we will see Chavez inaugurating the military bridge to replace that one between Merida and Tachira that collapsed today. It will be another wonderful testimony to the inability of the revolution to plan anything or do anything before there is a problem.

But, of course, the Minister of Public Works and Housing is more concerned about establishing rules such that RCTV, whose license was illegally revoked in 2007, will be forced to carry Chavez’ nationwide speeches like today with its limited cable programming, rather than being concerned with falling bridges or housing or public works. The new rule is simple, if you carry more than 70% of programming made in Venezuela, you have to provide Chavez’ speeches I am sure that if RCTV had 60% of its programming made in Venezuela, the rule would be different. Or 45%.

Oh yeah, and according to today’s El Nacional, if you had money in any of the “refloated” banks, Confederado, Bolivar or Central, you could not take more than Bs. 2,000 out yesterday (About US$ 300 at the parallel rate). I have not been able to confirm this information, fortunately I only had Bs. 1,000 at one of these intervened banks and owed more than that in my credit card, which I promptly paid today.

But to give you some good news and make the post about something, Daniel of Venezuelan News and Views is back! Read his story carefully, he made it, he survived, but he could have easily have not, because he happens to be middle class and informed, he was transported to Caracas and given some of the best care available in the land. He is in the minority. He made it. But dengue fever is here to stay and to kill many Venezuelans every month, but it is given the same priority as crime: as long as Globovision does not report on it, nobody will know what is happening. Just the way Chavez wants it. Same as the strikes that take place daily, the protests that take place daily, the press conferences that take place daily. Soon, none of it will be happening, as the Government shuts down Globovision and thus, no dengue, no strikes, no protests.

And soon RCTV will be forced to carry Chavez live, direct from the top of Angel’s Falls as he announces the reopening and renaming of the waterfall to its rightful Indian name Churum Meru.

Thanks God there is a water shortage, otherwise he may decide to add water to Angel Falls to make it look prettier.

A post about nothing, just another boring day in the Chavez revolution.

Yesterday, President Chavez in his customary un-Presidential style, accused someone and asked the General Prosecutor to investigate him, in this strange concept Chavez has of division of power. The target this time around was banker Nelson Mezerhane who also happens to be one of the owners of Globovision, the only TV station that still dares show the daily protests around Venezuela.

Of course, there is no separation of powers in Venezuela. Chavez has made sure that nobody moves unless he tells them to. The Bolibourgeois bankers could do what they wanted until something happened, Raul Baduel was his main general and savior, until he opposed him, Miquilena was his putative father until he was no longer Chavez decided to be a putative orphan.

Thus, on Saturday Chavez ordered the General Prosecutor to investigate Nelson Mezerhane, much like he ordered the Judge in the Eligio Cedeño case to get a 30 year sentence for letting the banker go. He is in charge of everything as long as it is convenient for him, if not, it is somebody else’s fault, as in the case of his friendly revolutionary bankers that raped the banks they owned for years, but somehow Chavez who knows who is being wire-tapped, followed and who is conspiring in Venezuela, was not aware that billions were being robbed by his robolutionary buddies right in front of his nose. He should read this blog or at least get a summary every week, let’s not get presumptous.

I any case, Chavez seems to have been irked by his arch enemy Mezerhane saying something in local newspaper El Mundo last week. Specifically Chavez accuses Mezerhane of saying that the campaign against his bank was “created and organized by people related to the Government. Except…

Mezerhane never said what Chavez said he did…

You can read what Mezerhane said right here in Spanish:

Reporter: Is the Government included in this attack (to his bank)?

Mezerhane: I can not say it is the Government, there are people linked to it who have done their job.

Reporter: Laboratories involved?

Mezerhane:There are active laboratories that have created rumors and banks are places of confidence. If people start creating rumors, it is understandable that people will say “something is happening here”…

As to the first question, it is no secret that Jose Vicente Rangel, alias “Marciano” has been after Mezerhane’s bank for quite a while. And Rangel was Vice-President, Foreign Minister and Minsiter of Defense under Hugo Chavez, so he can definitely be “linked” to the Government.

In fact, Jose Vicente has been “rumoring” about Mezerhane’s bank for quite a while. Last June he wrote: “In the banking sector there is increased worries about what is happening in a bank with serious problems, whose owner appears involved in destabilizing adventures”

Funny that Rangel was only worried about banks which can be considered to be more on the side of the opposition, but failed to mention a single Bolibourgeois bank in that note, despite all of them being bankrupt already.

Interesting also, that when Petkoff says something about bank runs in general, he gets a formal letter from the Prosecutors Office about creating panic, but Rangel seems to be immune to such threats. Oh well! such is the life in a Dictatorship!

In fact, Rangel, once again last week said that “soon a bank that has been having problems and the sale of which was frustrated recently would be intervened soon”. Everyone knows which bank Rangel is referring to.

That is precisely what Mezerhane is also referring to, we all read it and Petkoff noted it. And so did Jose Guerra in today’s La Razon, who said that Rangel wants to drive Mezezrhane’s bank into bankruptcy, now that the forced sale of the financial institution has been aborted by the crisis.

So, Mezerhane said what everyone knew and you can bet that Chavez made no mistake when he made his accusation. Basically, the autocrat/Dictator has set his sights on Mezerhane and his bank. And any attempt by Mezerhane to clarify the situation is simply useless.

I mean, can it be more clear than this, Chavez said:

“This is grave and irresponsible…more so when it happens to be the President of a bank, which besides this, has had grave problems”

Talk about irresponsible! The President of a country, in the middle of a banking crisis, saying a bank with 3% of the market has been having “grave problems”. This is simply changing the name of the bank to Banco Doomed!

Sorry, Mr. Mezerhane, no matter what you say, argue or implore, Hugo is out to get you and so is Rangel. Given the state of law and order in Venezuela, there is simply nothing you can do. Your days and those of your bank are numbered.

And I imagine the fanatics and PSF’s will come and say I am the one responsible for creating the run on the bank.

Do you mean more people read me than watch Alo Presidente? Or more than read Rangel’s Marciano column

Until then, there is only one reckless, irresponsible and ignorant person in Venezuela:

Mr. Destruction himself: Hugo Chavez!

You have to wonder how stupid people can be to cheer Hugo Chavez in Copenhagen telling them about saving the planet. If any Government has been completely negligent about the environment it has been the Chavez revolution, which has subsidized both gasoline prices and cheap cars for the rich. Gasoline remains at 4.4 US$ cents per liter at the official rate of exchange, 1.6 US$ cents at the swap parallel rate(For those that use gallons, we are talking 6.1  US$ cents at the parallel rate per gallon or 16.6 US$ cents at the impossible to get official rate), a suicidal subsidy to the well to do, which only encourages waste, emissions and more damage to the environment.

But give credit to the silly and idiotic left, that can make heroes out of Chavez in an environmental conference or Mugabe at a Human Rights Forum.

As Juan in Caracas Chronicles put it (or in the new website)
“This gasp-inducing pileup of ironies and contradictions can only be interpreted as a joke. Hugo Chávez came into the global warming summit and made a big hot mess of it. Thankfully, at least some of the world’s newspapers took note and shunned him.

The rest of the delegates – at least the ones looking for progress on this issue – should do the same.”

And Juan almost covered everything when he published the data showing how Venezuela happens to be the largest emitter per capita of CO2 in Latin America, just so that there are now doubts about Hugo’s non-green credentials. Because this was not always this way. In the 70’s physicist Freeman Dyson’s studies on CO2 emissions in the world (looking for a link) showed Venezuela to be one of the few countries reducing net emissions via the CONARE project, a reforestation project which planted billions of pine trees, which in some cases covered 60-70% of some states (I had not even heard of CONARE recently)

And to complete the demonstration of the non-green nature of the Chavez non-revolution, this data taken from here (Thanks to @jesuspi for providing it via Twitter):

Venezuela’s emissions are not only increasing, but the country had the HIGHEST rate of increase not only in the region, but in the whole world, with a 14.2% increase between 2006 and 2007. In the region Venezuela almost TRIPLES the increase of Argentina which was second.

So, add the environment to Venezuela’s record breaking statistics in crime. In the case of crime, it is suffered mostly by the poor, where homicides concentrate, in the case of emissions, it is suffered equally by all via pollution, but it is all done to subsidize the well to do, in another bizarre and contradictory aspect of this strange revolution.

And the fanatics and idolizers cheer on, as the Venezuelan people suffer the consequences of the abysmal environmental record of the Chavez revolution.

This is a picture of Hugo Chavez in Copenhagen last night. It remains unclear whether he was running away from the smell of sulfur after Obama spoke at the conference or if he is running away from one of those flying Dutchmen that wants to invade Venezuela.

(Weil: Chavez: Anyone that invents that I am involved in a guiso (“stew”, but word used for fraud or racket) goes to jail))

The Comptroller Clodosvaldo Russian, also called Ruffian by those that “love” him, is a funny man, or he may think he is being funny when he tells us that corruption under his watch has gone down. Well, he is either deaf and dumb, or so partisan that he refuses to see beyond his nose. More amazingly, Russ(ff)ian always manages to stick his neck out and defend the President whenever Chavez is in trouble, like he did two days ago on the anniversary of the 2000 Constitution vote. He even said that there were “paid companies” to make public denunciations of corruption in order to make the Government (i.e. his boss the autocrat/Dictator Hugo Chavez) look bad. And I reiterate he actually had the gall to say corruption has gone down under his watch.

In fact, this whole thing by Russian and others seemed to be a well designed campaign to defend Chavez from any possibility that he is accused of having known about all of the financial corruption that has taken eight banks down.

It actually all started with Chavez suggesting he had only seen Arne Chacon once in his life. Sure Hugo, the funny thing is that Arne was not only the brother of your Uber Minister Jesse, but actually worked for a while at Miraflores and you want us to believe you never heard of him. Chavez called Arne a “pata en el suelo” (A person so poor, that goes barefoot). Well, this happens to be quite similar to what we have been saying in this blog, not only about Arne Chacon, but also about other bolibourgeois groups which have made hundreds of millions of dollars in the last few years.

Now we are supposed to believe that corruption is down, after Fernandez Barrueco and his group ransacked four banks and billions in two years and Arne Chacon and Pedro Torres “spent” half a billion dollars  buying financial institutions this year alone. Because it was Chavez who publicly hailed Fernandez on his Alo Presidente program as the type of enterprising private sector people the revolution needed. Some social conscience, no?

And Hugo’s brother Adan threatened to take to Court anyone that accuses him of corruption, a very serious threat in a country where his brother can send a Judge to prison for following the law. Strange thing is that Adan never clarified whether he knew Fernandez Barrueco or not, or whether Fernandez ever visited him while Adan was Ambassador to Cuba.

And former Vice President/Minister of Defense/Minister of Foreign Relations Jose Vicente Rangel also joined the chorus suggesting this is all a conspiracy against Chavez. Apparently, he has not seen the DISIP report last February which said the Superintendence of Banks knew that some of the intervened banks were being used as a “money centrifuge” for the personal benefit of the members of the Board. I wonder what part of that sentence the Comptroller does not understand.

And the funny (not in the ha ha sense) thing is that all of a sudden the same Superintendent of Banks that did nothing for years (YES, YEARS!) in terms of approving or denying the transfer of ownership of banks, is now on a rampage of resolutions denying the purchase of the very same banks that were being run by the bolibourgeois new wave financiers for years, most of them (all?) bankrupt by now.

But we are supposed to believe that Chavez, who regularly threatens us that he knows everything that is happening in Venezuela, did not know about any of this or that corruption has gone down.In the words of the Comptroller, those accusing the Government of corruption don’t do like him the detailed “quantitative, analytical” work that his office does.

Well, let’s just take one case and let’s be analytical and quantitative like Mr. Russ(ff)ian wants us to be and I hope someone brings this information to his eyes, I will not waste my time denouncing it. They know and have all of this information:

Ricardo Fernandez Barrueco had a small trucking company and managed a parking lot in 2002. He helped the Government during the 2002 strike by lending it his few trucks. Because of this, he received easy credit to buy some 3,000 trucks in the next couple of years and became “The King of Mercal”, the main supplier of food to Chavez’ pet project Mercal, a nationwide chain of markets where food was sold at low prices.

For quite a while, a copy of Fernandez Barrueco’s financials, audited by a prestigious accounting firm have been circulating. In late December 2005, his net worth had soared to US$ 1.6 billion, BEFORE he even started buying (and emptying) banks:

To be exact we are talking about US$ 1.609 billion in assets once his debt of US$ 18,977 dollars is subtracted. This would place Mr Fernandez in less than three years in the top three or four of Venezuela’s richest people.

Let’s put this in perspective: The fastest growing company in the history of the world was Google, you can find the Prospectus of its IPO here. Founded in 1999, Google had a loss of US$ 6 million that year, lost 14 million in 2000 and earned 6.9 million in 2001, 99 million in 2002. 105 million in 2003. Thus, in its first four years of existence the fastest growing company in the history of the world Google, made in profit US$ 191 million.

Well, Mr. Fernandez Barrueco had in late 2005 the following assets:

Thus, Mr. Fernandez Barrueco in about half the time as Google, I repeat, the fastest growing company in the history of the world, had accumulated personally (I imagine in dividends) US$ 411 million, which he invested in a bunch of bonds and about US$148 million in CD’s (A bit conservative for my taste).

Well, Mr. Russian, this should raise some eyebrows in your “analytical” and “quantitative” mind or team, if there is one. Mr. Barrueco with a diversified food and transportation business, was able to do better than the fastest growing company in the history of the world. But even worse, he is (was?) probably much richer in 2009, because his empire had expanded and gone into Banking and “money centrifuges” to use the technical language of the DISIP report. Remember, this statement is “only” from four years ago.

Maybe this is all legit, but somehow I doubt it, call me skeptical…

So, Mr. Russian may want to look into this to see if his statement that corruption has decreased in Venezuela during his tenure is true or not. While he is at it, he may also check on Arne Chacon and his partner and the half a billion dollars they spent this year on financial institutions.

And if that is not enough, he may want to check into those involved in the Maletagate scandal. These guys “only” were worth a few hundred million of questionable origin and as far as I know they have yet to be investigated.

De nada, Clodosvaldo.

The Superintendence of Banks issued a resolution today saying that three of the banks intervened will be reopened on Dec. 21st. I still don’t see how this will work, since I expect people will simply take their money out as soon as they can and the funds will flow to better banks or to foreign currency.

It may be that the Government is doing this knowing quite well that this will happen, but the strategy will be costly. In some sense all the Government is really doing is moving loans and deposits from these banks to Banfoandes and changing the name of the bank, something that it could have done on day one and created much less panic than it has.

First of all, the Government will have to replace the capital in each of the three banks which reportedly was lost with the creative operations done by the owners.

But more importantly, let’s look at the deposits in each of the three banks, looking at the total in each bank, as well as the size of “official” deposits (As of October 31st., we don’t know how much fled the week the first two were open):

——————————-Deposits  (Bs)                                Off. Deposits (Bs)

Bolivar                         4,038 mill.                                         858 million

Confederado              3,001 mill.                                       1,702 mill.

Central                         4,003 mill.                                          835 mill.

As you can see, in Bolívar and Central official deposits were roughly 21% of all deposits. We don’t know how much of that left Bolívar in the week that it was intervened with open doors, but I assume quite a bit. Thus, the only way to insure these deposits will not leave is for the Government to add to the official deposits. The case of Central is likely to be worse as investors did not have a chance to take their money out, as it was shut down when intervened.

You can also see how ridiculous Banco Confederado was, with 57.1% of its deposits in official ones, something that makes no sense in any way you look at it.

It is clear why the Government decided to liquidate Banorte, the bank had 65.9% in official deposits, a number that should have raised the eyebrows of the Superintendence and shows there was help from the regulators in this whole crisis.

And then we come to Banco Canarias. The Government has said little about the losses in any bank, but Canarias’ profile in deposits was not too different than these banks, with 43.3% of its deposits in the form of official Government deposits. Clearly, the losses had to be huge to justify the different strategy of liquidating the bank. The question is whether people will ever be told what exactly happened there and what is the cost.

Thus, in the end the Government is doing what it should have done from day one, but making Banfoandes stronger, which is surprising, given the charges that this bank kept part of its deposits in many of the intervend banks. But the worst part is that people are likely to move their funds to the private commercial banks that are perceived to have no problems. This could easily have been avoided.

It also makes little sense for the Government to now have so many banks. Banfoandes will now surpass Banco de Venezuela (assuming all deposits stay, which will not happen) with 19% of all deposits, Venezuela will have a similar amount in fourth place. Industrial will be a distant 12th. with 2%.

This will all have an unknown financial cost, as the Government will have to replace capital and cover losses in thse banks. But more importantly, Government banks have been unable to keep up with even the Government’s requirements for loan quotas, so that lending will be hurt, which will be bad for economic growth at a time when things are not well.

In case you were wondering, our good friend Daniel from Venezuelan News and Views has been ill and has been hospitalized. His condition is delicate, but seems to be improving, he managed to call me yesterday and hopes to be out of the hospital by the end of the week. Just talked to him and asked his permission to post on this private matter, but figured his readers may wonder what is going on.

Best wishes to Daniel from here!