Archive for the 'Venezuela' Category

UN: Venezuela leader in cocaine transit, another victory for the robolution

July 6, 2009

(Este post se encuentra en Español aqui)

On Sunday, El Nacional (Ciudadanos page 13, by subscription) carried an article on the recent report by the United Nations on drug consumption and trafficking, which besides talking about the increase in consumption of opiates in Venezuela (page 89 of report),  it says Venezuela has become the largest transit country for cocaine in the world (page 72 of report), with an estimated 40% of all cocaine shipments going through the Bolivarian Republic of Venezuela.

The first thing you notice is the reaction of the Venezuelan Government, rather than being embarrased or surprised, or simply announce a new war on drugs, they somehow reach the conclusion that this was a victory for the country, finding it positive, as the UN found “Venezuela among the top countries in seizures of cocaine shipments”.

Well, it turns out that seizures in Venezuela are actually down, not up, while the percentage of cocaine trafficking that goes through the country is actually up significantly , but apparently the Colonel has little acquaintance with basic mathematical concepts.

But the most bothersome thing about this is the implications. Who watches the border for drug trafficking? Well, our illustrious military, which has been able to lobby for and purchase billions of dollars in defensive and offensive weapons, tanks, helicopters and jet fighters, but the country only has a single airplane dedicated to fighting drug trafficking and a meager seven frigates for over 1,000 Kms. of coast.

And the reason for this you may wonder? Well, I will not insult your intelligence on this, but it is quite obvious: corruption. The military looks the other way for the same reason that the Government looks the other way in the dozens of corrupt financial/business schemes that the robolution has invented in the last few years under the watch (??) of Hugo Chávez.

Thus, another victory for the Chávez revolution, joining those of terrifying crime statistics, kidnappings and corruption. Unfortunately, while these last three can be reverted in the future, the nefastous corrupting effects of drug trafficking and use, have proven to be almsot impossible to reverse once they are ingrained into the culture of a country.

The Devil goes bilingual, watch for exdiablo.com

July 5, 2009

(Este post se encuentra en Español aqui)

In the next few days, I will start a somewhat crazy experiment that all logic tells me I should not even try: I will make this blog bilingual by posting everything here in English and at www.exdiablo.com in Spanish.

There are multiple reasons for doing this and even more for not doing it.

When I began my blog, it was my goal to let people outside of Venezuela know what was happening, how Hugo Chavez was walking this very fine line of illegality and abuse of power to take our rights away from us. This is no longer the most pressing need. By now, Chavez’ autocratic and dictatorial style is there for everyone to see, only the most fanatic and fervent worshippers of Hugo still believe his revolution means well, is not militaristic and does not have as its main purpose the indefinite preservation of Hugo Chavez in power.

But this does not mean that the story should not be continued to be told in English.

At the same time, there is much that is not being told in Spanish, or not being told in detail by the traditional media (fear, pressure?), so that there should be a place to tell the same stories in Spanish. I should at least try to get people to be aware of them even if they don’t get as incensed as I get.

There are a number of problems with this project. First of all is simply time, each and every post has to be translated and we all know that you are not the best translator of your own writings, as the original language will influence how you do it. The second problem, is that it takes time and therefore I will blog less. So, if there is someone out there that is willing to help once in a while with translating my posts, I would appreciate it. My rule will be that I will not post three times without translation being available.

There is also the problem with exposure, obviously in Spanish the blog will be much more visible, but that is a risk I am willing to take at this time. As I always say, I only have one country, so what the hell!

Every intuition tells me that the idea is crazy, it’s too much work and will reduce my blogging, but somehow I feel I have to do it and have been toying with it ever since I changed to this new software at the beginning of the year. I have not even consulted it with my blogging conscience, my brother, which will give you an idea of how much I think that if I really analyze it hard, I will simply not do it.

So, there you have it, the devil goes bilingual fulltime, which I hope does not make me go bipolar, like that other animal hanging out on the Venezuelan blogosphere.

One Government, one voice!!!

July 4, 2009

While Insulza is trying to defend murky democracy in Honduras, in Venezuela the “One  Government, one voice” program continues successfully. Every day, democracy is diminished in Venezuela and Insulza seems to have a Mad Magazine, “What? Me worry attitude”. Let’s see:

—In Tachira State, the democratically elected Governor of the State will be unable to celebrate Independence Day, because the pro-Chavez General in charge of the region will not allow him to go into Plaza Bolivar, because “He is the military Governor” and has decided to militarize the State. Take that Insulza!

—And as part of the “One Govennment, one Voice” peculiar Chavista democracy, Cedice’s ads in favor of private property (They were not against anything, just pro-private property”, were suspended by the man the “people” ousted from the Governorship of Miranda State and resurfaced as all powerful Chavista Minister of Infrastructure and in charge of the media and telecom regulator Diosdado Cabellos. He will also shut down 200-plus radio stations, just because…he can!!! Are you listening Insulza?

—And n Carabobo State, the illustrious but barely illustrated Mayor of Valencia Edgardo Parra led a mob in he attack of the headquarters of newspaper El Carabobeño, in which the facilities were vandalized. Thus, the guy in charge of local security leads a mob, which damages private property and establishes a clear threat against freedom of expression. Insulza: Please defend democracy, but don’t meddle with Hugo!!!

It’s the new Latin American democracy: One Government, One Voice!!!

Petrobono or Petrobrainless?

July 1, 2009

For two months the Government was “thinking” about issuing a bond for PDVSA. Last week it finally announced it, but:

1) It was too large an issue

2) It was only aimed at corporations

3) It was not registered abroad

4) It was forbidden to be traded in US$

5) The scheduled seemed to ignore i) Monday was a banking holiday, Friday was a stock market holiday in Wall St.

then

i) First the Government decided to let individuals participate

ii) Then it changed the schedule

iii) Then it allowed it to be traded in US$

iv) Finally, yesterday it said it would register in the international markets.

but…

–It is issued under Venezuelan Law, not under international regulations (PDVSA bonds were issued in 2007 under Reg S), international investors will not be as interested.

–Friday is still a holiday in the US and Thursday is half a holiday for fixed income markets.

–It is still too large at US$3 billion.

Thus, the bond remains a strange animal and will yield more than already existing PDVSA bonds. I will create indigestion in international markets as Venezuelans sell it abroad.

My suggestion:

Ask your broker to give you a price such that:

1) The bond yields more than 22%

2) You are buying dollars at or below Bs. 6 per US$

Better yet, do nothing, but next Monday or Tuesday buy the bond in US$ in the international markets as it gives you a yield (Yield to Maturity) of over 22% per yea for the next two years.

Issuing these bonds should be simple, the people managing it are simply brainless, so we go from Petrobono to Petrobrainless.

That is what the robolutionary PDVSA is all about.

As two mores scientific papers show anomalies on the RR, the WSJ picks up the subject

July 1, 2009

This month, the journal Statistical Science accepted two more papers that provide scientific evidence that all was not well with the 2004 Recall Referendum that took place in Venezuela. This provides further evidence of widespread manipulation of the votes in the referendum and constitutes the third and fourth scientific papers accepted for publication. Curiously, none of the papers purporting to show that the vote was clean or that these papers constituted no proof has ever been accepted for publication in a peer reviewed journal.

I have already talked about the paper by Delfino and Salas, which was earlier accepted for publication and there is a second paper by Maria Febres Cordero and Bernardo Marquez, also published in the same journal.

The first paper accepted is one I have discussed already by Raquel Prado and Bruno Sanso, which deals with the mathematical discrepancies between exit polls and the results reported by the Electoral Board. What is perhaps most intriguing about this study is that there are two polls showing the same anomalies.

The second paper accepted for publication is by Pericchi and Torres and I have also reported on this, but the accepted paper goes further than the report I presented. They apply Benford’s Law for both the first and second digit to the 2004 USA Presidential elections, three (1996,200 and 2004) Puerto Rican elections the 2000 Venezuelan Presidential election and the 2004  recall vote. They fond that the second digit law is compellingly rejected ONLY in the case of the Venezuelan recall vote and ONLY for the votes from the electronic voting machines. In fact, their results show an excellent fit to, for example, the 2004 USA Presidential elections, as well as the manual votes in the Venezuelan recall vote.

All of these topics have become quite relevant today due to the controversial results of the Iranian elections. In fact, today the Wall Street Journal publishes an article on the subject quoting Prof. Mebane who used similar techniques to show that the second digit Benford Law suggests that there was ballot stuffing in Iran. The article even quotes early detractors of the use of these techniques changing sides given the evidence of all these studies. The Carter Center criticized the use of Benford’s Law as it “could” under certain conditions suggest fraud in fair elections.

These new results invalidate the conclusions of the Carter Center, but by now they have moved on to talk about democracy (don’t laugh) in Honduras and none of their “work” on the elections has ever been accepted for publication.This seems to be a new form of judgemental imperialism by foreign politicians that have no clue about what they are talking about, but keep interfering with the affairs of our countries.

Note added: And the WSJ seems to have picked up on Benford

WSJ: It’s all about Chavismo

June 30, 2009

The WSJ, makes it all about Chavismo. Sad, when politics in our countries are reduced to the whims of an autocratic Dictator who cares only about perpetuating himself in power and tried to have Zelaya do the same.

The Wages of Chavismo

The Honduran coup is a reaction to Chávez’s rule by the mob.

As military “coups” go, the one this weekend in Honduras was strangely, well, democratic. The military didn’t oust President Manuel Zelaya on its own but instead followed an order of the Supreme Court. It also quickly turned power over to the president of the Honduran Congress, a man from the same party as Mr. Zelaya. The legislature and legal authorities all remain intact.

We mention these not so small details because they are being overlooked as the world, including the U.S. President, denounces tiny Honduras in a way that it never has, say, Iran. President Obama is joining the U.N., Fidel Castro, Hugo Chávez and other model democrats in demanding that Mr. Zelaya be allowed to return from exile and restored to power. Maybe it’s time to sort the real from the phony Latin American democrats. [Review & Outlook] Associated Press People against the return of ousted Honduras President Manuel Zelaya participate in a rally at the central park in Tegucigalpa, Tuesday, June 30, 2009.

The situation is messy, and we think the Hondurans would have been smarter — and better off — not sending Mr. Zelaya into exile at dawn. Mr. Zelaya was pressing ahead with a nonbinding referendum to demand a constitutional rewrite to let him seek a second four-year term. The attorney general and Honduran courts declared the vote illegal and warned he’d be prosecuted if he followed through. Mr. Zelaya persisted, even leading a violent mob last week to seize and distribute ballots imported from Venezuela. However, the proper constitutional route was to impeach Mr. Zelaya and then arrest him for violating the law.

Yet the events in Honduras also need to be understood in the context of Latin America’s decade of chavismo. Venezuela’s Hugo Chávez was democratically elected in 1998, but he has since used every lever of power, legal and extralegal, to subvert democracy. He first ordered a rewrite of the constitution that allowed his simple majority in the national assembly grant him the power to rule by decree for one year and to control the judiciary.

In 2004 he packed the Supreme Court with 32 justices from 20. Any judge who rules against his interests can be fired. He made the electoral tribunal that oversees elections his own political tool, denying opposition requests to inspect voter rolls and oversee vote counts. The once politically independent oil company now hires only Chávez allies, and independent television stations have had their licenses revoked.

Mr. Chávez has also exported this brand of one-man-one-vote-once democracy throughout the region. He’s succeeded to varying degrees in Ecuador, Bolivia, Argentina and Nicaragua, where his allies have stretched the law and tried to dominate the media and the courts. Mexico escaped in 2006 when Felipe Calderón linked his leftwing opponent to chavismo and barely won the presidency.

In Honduras Mr. Chávez funneled Veneuzelan oil money to help Mr. Zelaya win in 2005, and Mr. Zelaya has veered increasingly left in his four-year term. The Honduran constitution limits presidents to a single term, which is scheduled to end in January. Mr. Zelaya was using the extralegal referendum as an act of political intimidation to force the Congress to allow a rewrite of the constitution so he could retain power. The opposition had pledged to boycott the vote, which meant that Mr. Zelaya would have won by a landslide.

Such populist intimidation has worked elsewhere in the region, and Hondurans are understandably afraid that, backed by Chávez agents and money, it could lead to similar antidemocratic subversion there. In Tegucigalpa yesterday, thousands demonstrated against Mr. Zelaya, and new deputy foreign minister Marta Lorena Casco told the crowd that “Chávez consumed Venezuela, then Bolivia, after that Ecuador and Nicaragua, but in Honduras that didn’t happen.”

It’s no accident that Mr. Chávez is now leading the charge to have Mr. Zelaya reinstated, and on Monday the Honduran traveled to a leftwing summit in Managua in one of Mr. Chávez’s planes. The U.N. and Organization of American States are also threatening the tiny nation with ostracism and other punishment if it doesn’t readmit him. Meanwhile, the new Honduran government is saying it will arrest Mr. Zelaya if he returns. This may be the best legal outcome, but it also runs the risk of destabilizing the country. We recall when the Clinton Administration restored Bertrand Aristide to Haiti, only to have the country descend into anarchy.

As for the Obama Administration, it seems eager to “meddle” in Honduras in a way Mr. Obama claimed was counterproductive in Iran. Yet the stolen election in Iran was a far clearer subversion of democracy than the coup in Honduras. As a candidate, Mr. Obama often scored George W. Bush’s foreign policy by saying democracy requires more than an election — a free press, for example, civil society and the rule of law rather than rule by the mob. It’s a point worth recalling before Mr. Obama hands a political victory to the forces of chavismo in Latin America.

Wikipedia, Alek Boyd and the “truth”

June 30, 2009

Alek Boyd has been trying to insert into Wikipedia’s section on “Criticism of Hugo Chavez”, the following paragraph:

Hugo Chavez has expressed in no uncertain terms his support for the Revolutionary Armed Forces of Colombia (FARC). High officials of the Chavez administration, such as Ramón Rodríguez Chacín have been accused by the Office of Foreign Assets Control of “materially assisting the narcotics trafficking activities of the FARC”. [81] Hugo Chavez held a minute of silence [82] over the assassination of Raúl Reyes, about whom he referred to as a “good revolutionary” and whose death prompted Chavez to push Venezuela and Colombia to the brink of war. [83] This was not the first time that Chavez would bring relations with Colombia to a standstill over the FARC. In 2004, Chavez halted diplomatic and commercial relations with Colombia over the capture, in the streets of Caracas, of FARC leader Rodrigo Granda.[84]

However, the Editors of Wikipedia want to remove it and Alek has been fighting over it. As you can see here, Alek’s arguments with the so called editors are absolutely bizarre. Alek documents each accusation and after all, it is a section about Criticism of Hugo Chavez. Moreover, despite claims to work with him, they don’t get back to him.

Remember this next time you use or read a Wikipedia entry.

PDVSA modifies terms, bond will trade in US$, but…

June 28, 2009

Well, the Government spent two months thinking about how to structure the Petrobono and came up with the strange animal I described before. Well, it took only two days for the “strangeness” to be removed, the schedule to be modified and turn into a plain vanilla zero coupon.

Basically, the Government removed the prohibition of having the bond trade in the international markets (Or will do it by changing the foreign exchange agreement with the Venezuelan Central Bank) so that people can buy it in Bs. and turn around and sell it in US$. It also changed the schedule because the Government seemed to have forgotten Monday is a financial holiday and it would be essentially impossible for individuals to participate.

Note added: The notes have not been registered in any international market including Euroclear or Cedel so far. Thus, investors will have to have them in Venezuelan custody, these limits, for now, how interesting they are.

I think US$ 3 billion of a PDVSA bond may be a little too much at this time, given international markets. Be careful if you decide to participate. I recommend you sell it right away uf you do, there will be an indigestion of Petrobono 2011 in the international markets as Venzuelans turn around and sell.

PDVSA bond announced and it’s a strange animal

June 26, 2009

PDVSA finally announced tonight the PDVSA Bond 2011 and it is a strange animal indeed:

—It is  a zero coupon bond to be paid in local currency and denominated in US$. (Zero coupon means no interst payments, it just pays 100% of its nominal or face value the day it matures in 2011)

—It will trade only in Bolivars at the official rate of exchange after it is issued.

—The final payment will be 100% of its nominal value. That is, if you buy 100,000 dollars at whatever price they sell it, at the end, only at the end (in two years) will you get your 100,000. In the meantime you can only sell it for Bolivars at the official rate of exchange.

If I understood correctly, you can only trade it in local currency at the legal rate of exchange. It says specifically:

“El PETROBONO 2011 podrá ser negociado luego de la fecha de liquidación  exclusivamente en el mercado local, en moneda de curso legal al tipo de cambio vigente para la venta.”

which says

The Petrobono 2011 can be negotiated after its payment date exclusively in the local maret, in legal currency at the rate of exchange available for sale.

I interpret this to mean that you will have to multiply dollars by Bs. 2.15 per US$. This would mean that if the price does not change (which could be one interpretation) nobody, absolutely nobody would want to sell it and will want to keep it until the end. Very strange if this is correct (I dont this this the case but…). The second interpretation is that the price can vary, so you will multiply the price x 2.15 x nominal value, and that is how many Bolivars you have to pay. While the first case it’s strange, the second one is too, as there are no dollars in the transaction until the end. How does this help push the swap rate down?

Here is the Prospectus.

Paraguay’s President: “We will imitate Venezuela’s Dictatorship”

June 25, 2009

Paraguay’s President Fernando Lugo just hit one out of the park when he said:

“We are going to imitate the Dictatorship of the Venezuelan President Hugo Chávez”

I guess it takes one, to know one.