The Devil's Excrement

When Ricardo Fernandez Barrueco fell from grace three weeks ago, we were wondering what the reason was and whether this was a fight between groups or simply Chavez cleaning up the new wave bolibourgeois bankers. And on the third week of the Bolivarian Mafia Wars, Chavez shut down today BaNorte, the third bolibourgeois Chavista banking group. And while “liquidity” was cited as the reason for the intervention with closed doors, the truth is that BaNorte’s situation is not too different from the other two groups: Uncertain source of funds, sudden growth, large official deposits, new wave bankers who claim to be pro-Chavez.

Thus, only one banking group left and one has to wonder whether it will be taken over or not.

The problem is that there are after shocks to come from this financial earthquake, as the Government continues to say very litte about what is happening. Today for example, the only Government official who had been removed from his position, the Head of the Comision Nacional de Valores (Venezuela’s SEC equivalent), was actually arrested for his involvement with the intervened banks. What his participation in all this was is still unclear, but clearly the clean up is not over yet.

Whether Chavez had planned to clean up or not from the beginning is yet unknown. He may have decided to get rid of all his bolibourgeois bankers after the crisis grew beyond what he had expected. A full clean up of what his advisers had been telling him for months. But if that is the case, where will he stop? His Government has also intervened some insurance companies belonging to these banking groups, but nobody knows whether they are in good shape or not or if they were also looted.

Meanwhile, local market remain nervous. The swap rate went down at the beginning of the week only go to back up today. The Government claims it will reopen some of the intervened banks in ten days, but nobody seems to believe it. Thus, the money continues its flight to quality, whether the blue chip banks or hard currency as everyone awaits for the Government’s next step…

The guy at minute 2:08 is none other than banker Arne Chacon, courtesy of lavidadesdeaqui.

I guess those ideals did not survive a fistful of dollars

During the last three weeks many people have said, stated and/or accused me of writing (at least) two other blogs:

caracasgringo.wordpress.com

or

venepiramides.blogspot.com

How anyone can think that I can write this blog (www.devilsexcrement.com), sometimes translate these posts into Spanish (www.exdiablo.com) as well as posting in my orchidblog (miguelorchid.wordpress.com) and have a regular job (where I do write a newsletter) is simply beyond me. In fact, lately I have been posting less and less due to the lack of time.

Thus, just to make sure it is very clear, I (M.O.) am the sole writer of The Devil’s Excrement and have no link (other than those on the left of this page) or association with any other blogs. For seven years, I have been writing this blog and I did try to hide who was the author in February 2004, but my name was inexorably linked to the Devil’s Excrement.

Anyone that looks at the style and posts in those other blogs will easily note that the styles and nature are completely different and I have no idea why someone has decided to spread the idea that I was also writing those two other blogs, which I read regularly and list them as such on this page. (Unless someone wants somehow to damage my reputation or that of the company I work for)

I note this, because today I have received half a dozen calls from a rumor that started the week before Thanksgiving with caracasgringo and continued this week with venepiramides. I am honored that anyone can think that I can be so prolific, manage so many topics simultaneously and do so much research and writing at the same time, but any content that I like to publish lies within only these pages, where I have said and written whatever I wanted in any case.

I am sort of tired of the financial crisis, so let’s look at Chavez blasting the project to build a solar plant in the Sahara. He said today:

“Europe is looking to take away Africa’s solar energy…without leaving anything for Africa”

Well, this is only so far a project, which you can read about here and see the diagram above.

While I don’t know enough about the environmental impact of such a project, it would power up desalinization plants which would provide water for drinking and agriculture, leaving quite a bit for the countries involved.

The project is being promoted by the Desertec Foundation.

Jeez, I wonder why Chavez opposes it and even more, with so many problems here, like Provea saying today poverty and policies to fight it are either stuck, or have taken a step back in Venezuela in the last two years, how come Chavez has time to learn about this and even have his own not so knowledgeable opinion?

Why doesn’t he spend that time learning about Venezuela’s problems?

You have to hand it to Hugo Chavez, after mishandling the crisis of the banking system for the first few days, he made a 180 degree turn, turned it into his personal fight against corruption and since most people can not tell a Fernandez Barrueco from a Torres Ciliberto, many have believed him, as he seeks to “help” the people have their money for Christmas and has plans to refloat the intervened banks and create yet another Government bank.

The problem is that imagine you had your money in Banco Confederado and on Dec. 21st. you can go to Chavez’ new Banco Bicentenario run by the Government. What will you do?

Well, even if it makes little sense, you will take your money out. Little sense, because if it is already a Government-run bank, why take the money out? This may sound logical, except that if everyone thinks like you and takes their money out, Banco Bicentenario may be in trouble (again) in a very short time.

Of course, the Government may deposit more of its funds in the new bank so that people can continue taking it out. That is certainly throwing good money after bad. And that good money is going to get worse, because this whole thing is going to cost lots of money. The same way that the Government spent US$ 11 billion in trying to lower the swap rate and it is now creeping up to a more realistic value.

But on top of that, this crisis is far from over, because to start with, the Government has not released much in the way of information on the health of the banks which had problems. In fact, we haven’t been even told why it was that they had to shutdown Canarias and Banpro and why Bolivar and Confederado can supposedly be saved.

Curiously, the only Government official to have been removed from his position (Will he be charged with anything?) is the former President of the Comision Nacional de Valores, who was replaced today by someone with no experience in capital markets.

And the crisis is not over because there are too many interconnections left that will still cause some pain. How much, is hard to tell, but it can’t be this simple when you look at the numbers and the concerns. To this day, we don’t know how much various brokers had in Banco Canarias, U21 and/or Banpro and lost most of their money. Or how much certain banks can withstand the run on their deposits. I still think the best option would have been to merge all four banks, two and a half weeks ago, into Banco de Venezuela and take it from there. Too late now, nobody asked me.

And at this point we can see a number of secondary effects from the crisis: First, more inflation as the Government is going to have to print Bolivars to replace the missing money. A higher swap rate, which is also inflationary. More banks in the hands of the Government which has proven to be completely incompetent in managing banks. A significant drop in the country’s bond prices which limits the ability of the Government to issue more bonds (Which I think is good). A total mistrust between financial institutions, which limits economic activity. Flight to quality in banks and currencies, which is clearly a negative.

All of which may get more complicated in the upcoming days. This time around, Chavez has managed to convince the uninitiated that this is about fighting corruption, but he may be over promising on what he can do and most people can’t be fooled all of the time.

So, while we say goodbye to Jesse Chacon, as Chavez’ token sacrifice in the financial crisis, there may be more that have to the gallows in order to be truly convincing.Thus, Chavez has turned the crisis in his favor, but his victory may be ephemeral and not hold if other problems were to surface. And we expect they will.

So, the leading theory of why Chavez decided to apply his now famous praying mantis strategy and eat his banking buddies goes as follow:

The bolibourgeois bankers were annoyed that the Superintendent of Banks had not approved most of the transfers of property of their banks. Thus, they decided to get rid of Hernandez Behrens and replace him with the Head of the Comision Nacional de Valores. Everywhere you rea, it said that Hernandez Behrens was out.

Except that Hernandez Behrens is married to the sister of the wife of Ronald Blanco La Cruz, a former Governor who is not only loyal to Chavez and related to Hernandez Behrens, but belongs to the same evangelical church. Blanco la Cruz had a report on the banks written by Cuba’s intelligence services the infamous G2 and asks to see Fidel and carries the report with him to show to the bearded Dictator.

Fidel sees him and calls Chavez and tells him that these bankers are a cancer and he has to get rid of them

And the rest is supposedly history.

Is this true? If it is, then Chavez will announce in the next few days the intervention of even more groups and he is going by size, from the largest to the smallest. First Fernandez Barrueco, the big enchilada, second Perucho Torres and Arne Chacon and there are two or three more groups, which while much smaller, are part of the same Mafia, even if they may be independent of each other.

Because it is impossible for Chavez not to know what was going on. Chavistas want to forget that it was Chavez that made Fernandez barrueco a billionaire and a banker and he even defended him publicly. In November 2005, Arne Chacon said that he was pro-Chavez, had a right to become rich and make money and it was “normal” that if he was pro-Chavez that Government institutions would deposit money in his bank, except his brother. Chavez had to know about these non-revolutionary statements, but seemed to have done nothing to stop him.

Which shows how unethical the robolution is that this is considered “normal”. What Arne may not know, is that in 1998 when his leader Hugo Chavez became President, only 4% of the deposits in the private commercial banking system were  Government deposits. These reached as high a percentage as 32% and have gone down, but remain high, near 20%, as they have become one of the biggest scams in the country: Government official deposits money in bank x at 12%, he gets paid 4-5% in cash for the “favor”. That is how all of these little banks have managed to increase deposits. I think it was Banco Confederado that at one point had 70% of its deposits be Government ones. This is one of the biggest multi-billion dollars scams of the Chavez robolution.

So, strictly speaking, if Chavez wanted to “clean up” the system, he should next intervene the other banks in the hands of the bolibourgeois and later those banks whose official deposits are too large as a percentage of its size. There are many of them. Look it up!

By now, everyday we hear a different story and the description of a different strategy.

First Canarias and Banpro were going to be liquidated and Bolivar and Confederado would be refloated. Today, Chief Economist Chavez said that some of these banks would be merged to become one, but failed to mention Bolivar.

And then, of course, on Friday Ali Rodriguez announced that the Government was intervening Banco Real, Central Banco Universal and Baninvest, all belonging to Pedro Torres and Arne Chacon. Additionally, the Government would also take over Seguros la Previsora, bought by Chacon and Torres, as part of their US$ 500 million buying spree earlier this year. Apparently a piece of change for the robolution, remember that a judge in Andorra had “billions’ of dollars belonging to robolutionaries frozen in that country. We still don’t know who they were and neither Chavez nor the Comptroller has said anything about this official decision by the Andorran Court.

The problem is that this is going too slow. While I welcomed the intervention of the new banks, as I have stated before, it should have been done with open doors. And I don’t see the point of creating new Government institutions, if Banco Industrial has gone broke twice and Banco de Venezuela has lost almost 3% of its market share since it was nationalized, it is clear the Government does not have the people to run more banks well.

And so far, except for U21,the Government has done little about the brokers involved in helping out banks buy themselves. There are many problems there. First, the loss is over US$ 200 million and all brokers put together have equity of about US$ 360 million. But nobody knows which brokers were involved. Then, there is the problem of custody. Custodian Caja de Valores said it clearly on Friday: They guarantee the ownership of the bonds in the name of the clients at the Caja de Valores, except that the Government never made it obligatory for brokers to transfer custody to Caja de valores, while it sold some US$ 37 billion in bonds. And while only a small fraction of the people buying the bonds kept them, a small fraction of US$ 37 billion is still a large number.

But nothing was ever done by the Government “of the people” to protect the small investor. Cemex was taken over by the Government and the law was ignored. Same with Fabrica Nacional de Cementos and Banco de Venezuela. At least in the last case in the end Bandes bought small investors out, but while Banco Santander was paid in US dollars, second class  Venezuelans citizen were paid the same but in Bolivars at the official rate of exchange.

And in two ironic twists, the man that presided over most of this as President of the Comision Nacional de Valores (Our SEC equivalent), Fernando Candia, was President of Banco Confederado when it was intervened, and the current President, who was clearly at fault for not supervising U21 closely enough, was named to be in charge of the intervention committee. I guess the fox was put in charge of taking care of the hens.

What else is new?

And to add insult to injury all of the “work” done in intervening the swap market to lower it to Bs. 5 by selling over US$ 8 billion in bonds was wasted with the whole bank crisis and the way it has been mishandled. Not that these bond offerings really lower the rate, it is more that people believe it does. So now, the rate is near 6 (Oh my God, I said it!) and the pressure is high.

Because as Bolivar liquidity got tight in the last few days, banks and brokers sold lots of dollar bonds, to generate dollars to generate Bolivars, which were sold in the swap market.  Despite this, the rate was up almost all days but Monday and Friday, so, imagine what will happen when this “supply” disappears.

And I see more jitters down the line as people worry about other banks and we don’t know the impact on the brokers and its clients.

So, the crisis may be pushed into 2010 by the ignorance and incompetence of the Government.

And it did not have to be this way. But the more banks that are shutdown, the more people and companies who will find their money stuck in the banks shut down and the more the flight to quality to other banks or other currencies will intensify. Hopefully it will eventually stopped, but the cost to the country, in money lost and its impact on future inflation is already too high.

(Not a great picture of Arne Chacon with one of his horses, Il Divo, when it won an important race)

Over four years ago, in a post called “Onward the pretty robolution” I reported on the meteoric rise of Arne Chacon, the brother of the omni-Minister Jesse Chacon in the financial world. My questions were simple, how could a lowly employee of SENIAT the tax office, who had no known employment before 2002, according to Venezuela’s social security administration, all of a sudden own a large stake in bank Baninvest and offer US$ 10 million for milk producer Indulac? (sadly Poleo’s post with a copy of his offer is no loner online)

Chacon’s rise continued, even if the Superintendent of Banks said he would look in 2006 into the origin of the funds in 2006, nothing was really done. While Arne grew his Empire, his brother went from Ministry to Minister, including twice the Ministry of Justice.

I then wrote a post about my research into Arne’s social security record, showing that he had never paid social security taxes between 1995 and 1997 and then again between 1999 and 2001, and again between 2003 and 2005 and magically in 2006 he was paying way more than me. This was the first post I ever removed from blog as a friend I respect quite a bit suggested I was getting into dangerous territory and my personal safety was at stake.  Fortunately the folks at infovenezuela.org were nice to publish it anonymously after I removed it from my blog.

Arne’s rise continued as he and Pedro Torres purchased Banco Real, Central Banco Universal, Helm Bank (they kept the deposits and cerdits and resold the license), Seguros La Previsora and Mi Banco. By then he was even coming out in public boasting that obviously his relation to the Government attracted deposits to his banks. He never explained how he purchased the banks. He reportedly owned close to 15% of the race horses at the Caracas racetrack.

And then the Government shuts down Fernandez Barruecos’ banks and yesterday Arne’s and Pedro Torres’ empire was taken over by the Government. Nationalized.

Today, he was arrested.

Why did it take so long? Why was it allowed to happen? Why the change of tune? I will write about that later, but clearly there was complacency, collaboration and ineffectiveness on the part of the regulators.

Chavez will once again play the “Yo no fui” (Who me?) role, blame the oligarchy, the wealthy and the opposition. But if there is someone to blame, it was Hugo Chavez, the President of Venezuela, this corruption by the brother of his omni-Minister, Jesse Chacon, was denounced repeatedly and nothing was done for at least four years.

Yeap, robolution indeed, the name is today more true than ever!

(In Spanish here)

This fairly lengthy document

contains a report written in February of 2009, documenting how the Fernandez group and other related companies ran a “money centrifuge” around Banco Confederado, Banpro and bolivar Banco, whose “victims” were the “Savers” of the banks (i.e. The much beloved “People”)

This scam at the time was being run from a parallel office to the banks that was raided by the DISIP (Intelligence Police) and which concludes:

“We can infer that there exists a “money centrifuge”  among the banking entities and through a series of companies created via a parallel office of Banco Confederado…It was clearly evident the deviation of resources from these institutions approved via loans approved by the three financial institutions, which were given a use different than to that which they were approved for, this carries a very high risk as most of these resources can not be recovered, which would have as a consequence damage to the depositors and thus to the State.

From the revision made of the reports of the Superintendency of Banks, of Bancos Confederado, Bolivar and Banpro, it is evident that this institution had full knowledge of the irregularities detected at those financial institutions….

…According to what we observed, we can infer that the members of the Boards of the three banks were self-financing themselves with the objective of profiting themselves…”

Need I say more. This was February of 2009, both the Superintendency of Banks and the intelligence police knew of the fraud.

But nothing happened, damaging even more depositors and the country. Who protected them? Who has the power to stop the Superintendence of Banks and the Intelligence Police at the same time?

You be the judge, but to me, this clearly went all the way to the top.

Even worse, these people were emboldened (guapos y apoyados) to go even further and acquire Banco Canarias and Digitel, using the same methods.

This has been going on for at least two years, that is how these people bought the banks to begin with. They used depositors money. As simple as that.

It is the raping of the country by the robolution with the approval and consent of the Autocrat, Hugo Chavez, himself.

(The documents are long and detailed, I will look at them and report on the details if there is something of interest)

While I did derive some satisfaction yesterday listening to the press conference led by Henry Ramos Allup about corruption in the robolution, I could not help but wonder if this could have been stopped earlier. Most of what Ramos Allup said, from structured notes, to buying banks with no money (and raping them), to PDVSA bonds, to insurance commissions, to scams, have all been chronicled in this blog in one way or another. (Only newspaper Tal Cual has covered this in detail, even infamous Globovision never touched most of these issues for fear of being shut down)

While sometimes I have had to limit names, the stories are here in detail, but its depressing to think that a Government that considers itself to be revolutionary has allowed this cancer to grow under its protection and allowed the biggest corruption scams not only in the country’s history, but likely in the Western world´s recent history to fluorish. We are talking billions, not millions as I have tried to explain many times, even if the cheerleaders of the robolution refused to admit it, calling me biased, hateful and out of touch with reality. Where are you now?

Ramos was clearly supplied with the information, but he had the outlines right and made mostly good use of it, not only citing names, the part mostly feared by those that denounce, but also mentioning amounts. And for each scam, there was usually a billion of commissions for those involved, under the not so watchful eye of the Comptroller and the General Prosecutor. And I knew most of the names mentioned but not all, some I do not know for sure if they should be there, many were missing, but many have known in detail the scams set up, while Chavez claimed to be fighting corruption and the Comptroller said he had investigated all cases brought to him.

I will not bore you repeating all of the details in this post, but would like to note a few aspects that are worth emphasizing at this time:

Government deposits in the banking system are (were?) huge: As of Sept. 29th. Government deposits in the commercial banking system reached Bs. 42 billion (US$ 21.55 billion) or 19% of monetary liquidity (M2). Despite this, the Government issued US$ 5 billion in debt in October. Even worse, of the Bs. 42 billion, Bs. 4.1 billion or US$ 2.155 were deposited in the four recently intervened banks in August and September. (Thanks to Jose Guerra for this information). This makes absolutely no sense! Who allowed it? Why? Recall that the Banco del Tesoro was created precisely to optimize the Government’s Treasury. But clearly these official deposits do not follow rationality, but graft and commissions and thus the problem. Venezuela incurs into more debt, as the money needed sits unused in banks which are bankrupt under the supervision and cooperation of the robolution.

Government officials cooperated with the failed banks: These people perpetrated their felonies not only under the eyes of Chavez and his Ministers and supervisors, but many made money out of it by allowing things to happen, by selling structured notes and bonds to these banks in opaque processes, transferring official deposits in exchange for commissions and bypassing the laws and regulations.

And Ramos named most of them, not all correct, but most are there, including the fact that the brother of Über-Minister Jesse Chacón, Arné, has gone from living in a “rancho” in 1997 to being wildly rich in 2009. And he admits that he did not put up a dime for buying his first bank and he said it is obvious that being Jesse’s brother helped him get deposits into “his” banks. Those are the new morals and ethics that the robolution is trying to instill in its supporters. Or how about the former President of the Comisión Nacional de Valores Francisco Candia, an unknown Lt. when he was named to that post, he just happened to be President of none other than Banco Confederado last week now at the services of Fernandez Barrueco. Was he being paid for favors in this manner? Or how about the fact that Banfoandes itself, a Government bank, had 25% of its deposits in private commercial banks?

And the Chávez praying mantiss effect is at its maximum: Poor Fernandez Barrueco has already been swallowed and convicted and former Minister of Finance Cabezas denies that “he even has a connection to the revolution” The bankers charged have no links to us”. Well Rodrigo, the only “banker” charged so far is Fernandez Barruecos, who only happened to be the largest supplier of Chávez’ Misión Mercal, a man that went from almost rags (He managed a parking lot when Chávez came to power) to riches (Worth US$ 1.6 billion according to his personally audited financial statements as of Dec. 2005, before he became a banker) To say nothing of the former cops, Captains, intelligence and military officers who are “bankers” in at least three of the four intervened banks.

And then the biggest Pinocchio has to be the Minister of Interior and Justice(??) Tarak Al Assiami who spoke to the gallery saying that he ” has asked Interpol for the capture of the Directors of the intervened banks who are outside the country”.

Funny, there is no order to capture them here and he has already ordered Interpol to do it? And Interpol will obey? That is not how Justice works Mr. Minister, youneed the Prosecutor to order the local capture first. All the Government has done is to issue a preventive order not to allow the Directors to leave the country. But if they are outside, until they are formally charged there is no way in Hell that Interpol will do anything but throw away Tarek’s request to the waste basket.

But lying like this, cheating the “people”, is now the rule of the day for these people who claim to feel sorry for the poor as they are killed daily under the same supervision and enforcement on criminals that seem to supervise and enforce banking laws.

These simple facts illustrate what a sham poor Venezuela is living. The Mafia has taken over under the guise of political ideals. Frankly, while anything should and could be better than this, the depth of corruption and unethical behavior, accompanied by the billions accumulated by the bolibouergois make me very pessimistic that Venezuelan can get out of this curse any time soon. We have become a country where lying, stealing and lawlessness are the rule of the day.

But can we get out of it or will the new rules and absence of ethics of the bolibouergois rule Venezuela for decades to come?

One week after intervening the four banks related to Ricardo Fernandez Barrueco with open doors, the Venezuelan Government surprised everyone by announcing that it would continue the intervention under closed doors and that two of the banks, BanPro and Canarias, would be liquidated and the other two, bolivar Banco and Confederado, would be “refloated” in the near future.

The decision, as well as the way it was handled, shows a high level of uncertainty on the part of the Chavez administration on how to handle the crisis, which was caused by the lax supervision of the authorities and Chavez’ backing of the main actors of this sorry episode.

The day began with an improvised press conference by the Minister of Finance announcing the measure, with few details given out, other than the banks would not open and that there would be differential treatment given to them.

This was easier said that done, as the shut down and the lack of details created panic among depositors who did not know what would happen to their savings. According to Venezuelan law, the Depositors Guarantee Fund has to pay up to Bs. 10,000 per account (US$ 4,651) up to 21 days after the intervention, but even this simple information was not communicated in the early press conference, confusing and scaring depositors.

And most of what followed in a string of press conferences was not much better, as information was mixed and the Government clearly realized that it had a real financial crisis in its hands as well as a public relations disaster that it had to address.

But having multiple spokesmen (and bad ones at that!) at each press conference (all broadcast live, of course) did not ease tensions or clarify much.

The truth is that in our opinion, the Government has been acting hastily on this matter. Independent of the reasons why Fernandez’ financial empire was intervened (Chavez has claimed HE ordered the intervention) the original decision to intervene all four and leave them open, still seems to be the correct one. By shutting them down today, panic was created and it is unlikely that any of the banks will ever be floated again.

One would have thought that someone in the Government would recall the 1994 financial crisis, when interventions shutting down the banks did not work, and it was only when interventions were done without shutting down banks or migrating deposits to other financial institutions that the crisis eased.

What happened at the time was that as the Government began shutting down banks, people began speculating who would be next in the process and begin withdrawing their money from what they perceived to be the weakest banks. Some banks which were not strong, but did not have to go under, did fold and it was not until intervened banks were kept open that things calmed down (Even if the currency devalued a factor of almost three in a few months in the process)

Tonight, in yet another press conference it got a bit more confusing, as the Superintendent of Banks said that accounts from the banks to be liquidated would be migrated to Banco de Venezuela, which is not what the law says. In fact, this would have been a cleaner solution, to have announced a week ago that all accounts would be migrated to Banco de Venezuela and the four intervened banks would be no more.

Because after Chavez said on Sunday that he is ready to nationalize the banking system, it seems hard to believe that anyone, absolutely anyone, would be interested in buying the banks that the Government wants to “refloat” The bank buying bubble in Venezuela is over, four to five times book is no longer a possibility, as it should be. Look for book value to be “fair” for a while.

And the Government wants people to believe that this was a problem of capitalism. But this is a problem of XXIst. Century Socialism, Protectionism and lack of supervision which is why I have been calling all of these guys the “robolution” for quite a while.

Because none of these robolutionaty bankers meant to make money the capitalistic way. They meant to make money by playing the most savage financial engineering in the world. There is even a new verb for it in Venezuela, you buy a bank “para ahuecarlo” to make a hole in it. That is the true reason these four banks are worthless, they were “holed’ really badly only because there was no supervision and Fernandez Barrueco had protection from a very high authority: Hugo Chavez Frias.

In June and July of last year, I wrote a few posts on the structured notes, which was how these noveau bankers began holing Bolivar, Confederado and Banpro. Like all bubbles, you knew they were there, but you did not know when they would explode. The Government decided to protect its own, prolonging the explosion of the bubble. It is my belief that we have only seen the very beginnings of it.

Because while these banks were “small” and some of the irresponsible Chavistas, like former Minister Cabezas, have made a point of this, these four banks are not the only ones that are worthless and the handling or mishandling of the crisis is not going to help the process.

And not only are other banks going to fall, but broker U21, fully owned by Banco Canarias and fully “holed” by the robolutionaries, is also insolvent via the shenanigans of the robolution in ways we will only find out about in the next few days. Thousands of investors are soon going to find out that their investments are worthless. Sadly, U21 was created originally to service the battered Venezuelan academic community, this long forgotten ideal only exists in the memory of those that witnessed it being decimated by the robolution. Sadly,as U21 falls, other brokers with loans and deposits with it, will also be hurt.

Like all financial crisis, we all know where this one began, but no one, absolutely no one, can tell us where it will end.

Least of all, those that today tried to cover up their ignorance by repeatedly addressing the country.

And it will end up badly in any case..