The Devil's Excrement

There is lots of concern over the decree by the Governor of Cojedes state Johnny (no misspelling) Yanez Rangel ordering the “intervention of all urban, rural or lands with agricultural vocation, public or private, which are presumably not in use or under the regimen of large estates, which are in conflict of ownership and or with distribution problems”

In this first decree, the regional Government intervenes 16 farms, belonging to private individuals, foreign and local companies, politicians and retired military. It also extends the intervention to other extensions of land that are later determined to be covered by the decree according to technical studies.

The legal counsel for the state backed the decree with this senseless statement:

“Property is going to be respected, the term intervention may be strong, but the intention is to establish order, under no scenario is this an expropriation, what we are looking for is for win-win situation”

Anyone understand that statement? I certainly don’t.

Separately, the Governor himself said:

“What we are looking for is to end anarchy…the idea is to coordinate and find out about the lands and define which ones are agricultural, and which ones are private or public…the land not in use in private hands must be used, if not, we will expropriate them…we are intervening 120 Hectares, we will study the condition in which they are today and will apply legal regulations, to make them produce, sustained under the framework of endogenous development”

In 2001, Chavez had approved under the framework of an enabling law, a land Bill that allowed the Government to expropriate land that was not being used and regulating the use of land. However, the law itself said that it could not begin to be enforced until a national land registry of farm land was completed and it gave the power to implement the law to the Institute for Lands. That law did not give regional Governors the power to implement the Bill.

There are conflicting reports about the purpose of the decree. To some, it is trial balloons to have Chavze implement similar interventions nationwide. to others, it is a dispute between the use of land for raising cattle or for agriculture. Finally, others say that the Cojedes Government has been trying to start a sugar processing plant and needs the land being intervened in order to carry out his project that has been planned jointly with Cuban “experts”.

City councilman Carlos Herrera appears in both today’s El Nacional and El Universal saying essentially the same thing about what I wondered about in my last post. His statements show that he keeps pointing to the Vice-Presidency and individuals in the finance sector for responsibility for the death of Prosecutor Danilo Anderson. Herrera was Anderson’s best friend. They also show that the investigation is not following up all of the leads and there is an important Government rift about the case. Let’s see:

In El Nacional Herrera says:

“The Attorney General/Prosecutor has to know that there are lots of people that are near him that are conspiring behind his back…”

Anderson adds that in different occasions he has been willing to collaborate with authorities telling them what he knows, but there are groups that are not interested in that he does it. He says the investigative police has yet to interview him or ask him about what he has denounced.

He said that while the Vice-President said his statements were garbage, he is glad the Attorney General has found them useful. 

In El Universal he calls on the Attorney general to meet with him on Monday because he has things that he can not say publicly, because people would start running. “If I say what I know, they will never catch the intellectual authors of the murder because they would leave the country”.

He added that the Carmona decree was signed by only three bankers, thus it is not that difficult to investigate.

Separately, Anderson’s girlfriend says in today’s newspapers, that the Vice-president called Anderson more than twenty times the week before his death and an additional twenty calls from Rangel’s’ assistants, adding that Rangel was pressuring Anderson.

Both Herrera and his girlfriend suggest that he was killed for prosecuting some people for being in the Presidential Palace on April 12^th. While the cases are reported as people being prosecuted for rebellion for signing the decree that Carmona issued that day, among those that are being prosecuted are people who were at the Presidential Palace and did not sign the decree, but either signed the attendance sheets at the entrance or have been seen in videos as being present at the palace.  Coincidentally, the first 40 of those Anderson had charged with rebellion, can no longer leave the country according to a decision by a Court yesterday. This includes Maria Corina Machado the Head of Sumate, who now has been charge for two separate crimes.

The Supreme Court ruled in August 2003 that five Generals involved with Chávez’ brief departure in April 2002 could not be charged with rebellion because no weapons were used. In order for the Chavez Government to succeed with the prosecution of the 400 people that went to the Presidential Palace in April 12^th., that decision needs to be overturned. Despite the fact that Supreme Court decisions can not be overturned, the Attorney General has asked that Court, now firmly packed by Chavistas, to overturn the case. The Court ahs accepted the case.

The only reason for doing this is to simply get rid of about 400 opposition leaders with one stroke. Besides going o jail, if any pf these people are found guilty they will not be eligible to hold public office for life.

City councilman Carlos Herrera appears in both today’s El Nacional and El Universal saying essentially the same thing about what I wondered about in my last post. His statements show that he keeps pointing to the Vice-Presidency and individuals in the finance sector for responsibility for the death of Prosecutor Danilo Anderson. Herrera was Anderson’s best friend. They also show that the investigation is not following up all of the leads and there is an important Government rift about the case. Let’s see:

In El Nacional Herrera says:

“The Attorney General/Prosecutor has to know that there are lots of people that are near him that are conspiring behind his back…”

Anderson adds that in different occasions he has been willing to collaborate with authorities telling them what he knows, but there are groups that are not interested in that he does it. He says the investigative police has yet to interview him or ask him about what he has denounced.

He said that while the Vice-President said his statements were garbage, he is glad the Attorney General has found them useful. 

In El Universal he calls on the Attorney general to meet with him on Monday because he has things that he can not say publicly, because people would start running. “If I say what I know, they will never catch the intellectual authors of the murder because they would leave the country”.

He added that the Carmona decree was signed by only three bankers, thus it is not that difficult to investigate.

Separately, Anderson’s girlfriend says in today’s newspapers, that the Vice-president called Anderson more than twenty times the week before his death and an additional twenty calls from Rangel’s’ assistants, adding that Rangel was pressuring Anderson.

Both Herrera and his girlfriend suggest that he was killed for prosecuting some people for being in the Presidential Palace on April 12^th. While the cases are reported as people being prosecuted for rebellion for signing the decree that Carmona issued that day, among those that are being prosecuted are people who were at the Presidential Palace and did not sign the decree, but either signed the attendance sheets at the entrance or have been seen in videos as being present at the palace.  Coincidentally, the first 40 of those Anderson had charged with rebellion, can no longer leave the country according to a decision by a Court yesterday. This includes Maria Corina Machado the Head of Sumate, who now has been charge for two separate crimes.

The Supreme Court ruled in August 2003 that five Generals involved with Chávez’ brief departure in April 2002 could not be charged with rebellion because no weapons were used. In order for the Chavez Government to succeed with the prosecution of the 400 people that went to the Presidential Palace in April 12^th., that decision needs to be overturned. Despite the fact that Supreme Court decisions can not be overturned, the Attorney General has asked that Court, now firmly packed by Chavistas, to overturn the case. The Court ahs accepted the case.

The only reason for doing this is to simply get rid of about 400 opposition leaders with one stroke. Besides going o jail, if any pf these people are found guilty they will not be eligible to hold public office for life.

City councilman Carlos Herrera appears in both today’s El Nacional and El Universal saying essentially the same thing about what I wondered about in my last post. His statements show that he keeps pointing to the Vice-Presidency and individuals in the finance sector for responsibility for the death of Prosecutor Danilo Anderson. Herrera was Anderson’s best friend. They also show that the investigation is not following up all of the leads and there is an important Government rift about the case. Let’s see:

In El Nacional Herrera says:

“The Attorney General/Prosecutor has to know that there are lots of people that are near him that are conspiring behind his back…”

Anderson adds that in different occasions he has been willing to collaborate with authorities telling them what he knows, but there are groups that are not interested in that he does it. He says the investigative police has yet to interview him or ask him about what he has denounced.

He said that while the Vice-President said his statements were garbage, he is glad the Attorney General has found them useful. 

In El Universal he calls on the Attorney general to meet with him on Monday because he has things that he can not say publicly, because people would start running. “If I say what I know, they will never catch the intellectual authors of the murder because they would leave the country”.

He added that the Carmona decree was signed by only three bankers, thus it is not that difficult to investigate.

Separately, Anderson’s girlfriend says in today’s newspapers, that the Vice-president called Anderson more than twenty times the week before his death and an additional twenty calls from Rangel’s’ assistants, adding that Rangel was pressuring Anderson.

Both Herrera and his girlfriend suggest that he was killed for prosecuting some people for being in the Presidential Palace on April 12^th. While the cases are reported as people being prosecuted for rebellion for signing the decree that Carmona issued that day, among those that are being prosecuted are people who were at the Presidential Palace and did not sign the decree, but either signed the attendance sheets at the entrance or have been seen in videos as being present at the palace.  Coincidentally, the first 40 of those Anderson had charged with rebellion, can no longer leave the country according to a decision by a Court yesterday. This includes Maria Corina Machado the Head of Sumate, who now has been charge for two separate crimes.

The Supreme Court ruled in August 2003 that five Generals involved with Chávez’ brief departure in April 2002 could not be charged with rebellion because no weapons were used. In order for the Chavez Government to succeed with the prosecution of the 400 people that went to the Presidential Palace in April 12^th., that decision needs to be overturned. Despite the fact that Supreme Court decisions can not be overturned, the Attorney General has asked that Court, now firmly packed by Chavistas, to overturn the case. The Court ahs accepted the case.

The only reason for doing this is to simply get rid of about 400 opposition leaders with one stroke. Besides going o jail, if any pf these people are found guilty they will not be eligible to hold public office for life.

City Councilman Carlos Herrera, who was Danilo Anderson’s best friend, immediately came out publicly arfter the murder of his friend and accused none other than Vice-President Jose Vicente Rangel of being involved in the killing. According to Herrera, Rangel had been pressuring Anderson to drop some names from the list of those accused of those that went to the Presidential palace to Carmona’s swearing in ceremony.

Today, the Attorney General/Prosecutor says and I quote: “these statements together with other ones have guided us in finding the intellectual authors of this crime”. Am I reading too much in this statement? Is he suggesting the VP might be involved? Or his friends?

Hold on to your seats! Get ready! I am about to say that the Government is proposing to do something which I think is good, maybe I think it is very good! Basically, it is one of the few proposals in the last five years that really attempts to tackle a structural problem in the Venezuelan economy. But let’s start at the beginning:

Currently, when the Government sends funds to any Government institution, office or Ministry, it orders the Venezuelan Central Bank to deposit the funds on behalf of that Government organization at a private bank. The Central Banks deposits typically a month or more of the institutions budget.

These Government’s organizations, typically deposit those funds in interest bearing accounts. Now, what is perverse about this is that 60% of the amount in deposits of the Venezuelan private banking system is invested in Government bonds and Treasury bills. Thus, the Government pays banks interest so that banks can pay a lower interest to Government organizations that have funds idle in the private banking system.

This is obviously quite perverse and inefficient. Perverse, because the Government is financing banks, so that banks can pay these Government institutions. While this had always happened in Venezuela, the difference is that these funds represented 4-5% of all deposits in the Venezuelan financial system five years ago, but represents 37.5% of deposits today! This is simply huge!

But it gets worse, since Government officials have discretionary power over which banks these funds are deposited in, this ahs become one of the largest sources of corruption in Venezuela today. Many banks, I will not mention names, actually pay commissions to Government officials, treasurers and administrators to divert deposits their way, whether they pay the highest interest or not. So, this is a huge business for private banks, which coincidentally have been making obscenely huge profits in the last few years. Now, not all banks play this game, but there is a large group of banks whose deposits have grown rapidly in the last few years.

To give you an idea of orders of magnitude, deposits in the banking system are like US$ 17 billion of which about 40% receives interest. However, man time Government institutions do not deposit directly but do a repo (Repo= Repurchase agreement. A financial institution “sells” a financial instrument to someone with an agreement to repurchase it at a future date) with the bank, some that the bank does not have to reserve in the Central Bank. So, rough numbers, we are probably talking about a total of US$ 30 billion with 40% owned by Government institutions or some US$ 12 billion. Now, spreads are typically 8-9% in the banking system, so we are talking about roughly a billion US$ I n revenues for the banks, A very nice piece of change, worth fight for…and paying for.

What the Government proposes to do is to create the Bank of the Treasury that would replace the Central Bank in these activities. Thus, institutions will not get their money until they need to use it. This will reduce the financing needs of the Government as it will be able to reduce the amount of debt issued in local currency and will allow for the more efficient use of Government resources.

This is a great idea if it is implemented efficiently and correctly and I applaud laud and clear the initiative. There are some negatives to it, but they are minor compared to what is at stake:

-Banks that have large Government deposits will suffer and have problems short term as these deposits are withdrawn from it. The Government should have a transition period in order to prevent a crisis at some financial institutions.

-Some Government institutions have actually used these deposits as a way of generating additional income to fund their activities. In particular, some institutions use this interest income to pay salaries the first few months of the year, since the Government takes time to approve and fund the budget every year. Most institutions doe not get any money until March each year. These institutions will have to learn how to live without these extra funds.

This is not the first time the idea of a bank of the Treasury has been floated. Let’s hope it gets beyond the idea stage and it works. To me the savings in financing, the elimination of the associated corruption and the efficiencies introduced would make this a giant step towards improving Government finances.

Hold on to your seats! Get ready! I am about to say that the Government is proposing to do something which I think is good, maybe I think it is very good! Basically, it is one of the few proposals in the last five years that really attempts to tackle a structural problem in the Venezuelan economy. But let’s start at the beginning:

Currently, when the Government sends funds to any Government institution, office or Ministry, it orders the Venezuelan Central Bank to deposit the funds on behalf of that Government organization at a private bank. The Central Banks deposits typically a month or more of the institutions budget.

These Government’s organizations, typically deposit those funds in interest bearing accounts. Now, what is perverse about this is that 60% of the amount in deposits of the Venezuelan private banking system is invested in Government bonds and Treasury bills. Thus, the Government pays banks interest so that banks can pay a lower interest to Government organizations that have funds idle in the private banking system.

This is obviously quite perverse and inefficient. Perverse, because the Government is financing banks, so that banks can pay these Government institutions. While this had always happened in Venezuela, the difference is that these funds represented 4-5% of all deposits in the Venezuelan financial system five years ago, but represents 37.5% of deposits today! This is simply huge!

But it gets worse, since Government officials have discretionary power over which banks these funds are deposited in, this ahs become one of the largest sources of corruption in Venezuela today. Many banks, I will not mention names, actually pay commissions to Government officials, treasurers and administrators to divert deposits their way, whether they pay the highest interest or not. So, this is a huge business for private banks, which coincidentally have been making obscenely huge profits in the last few years. Now, not all banks play this game, but there is a large group of banks whose deposits have grown rapidly in the last few years.

To give you an idea of orders of magnitude, deposits in the banking system are like US$ 17 billion of which about 40% receives interest. However, man time Government institutions do not deposit directly but do a repo (Repo= Repurchase agreement. A financial institution “sells” a financial instrument to someone with an agreement to repurchase it at a future date) with the bank, some that the bank does not have to reserve in the Central Bank. So, rough numbers, we are probably talking about a total of US$ 30 billion with 40% owned by Government institutions or some US$ 12 billion. Now, spreads are typically 8-9% in the banking system, so we are talking about roughly a billion US$ I n revenues for the banks, A very nice piece of change, worth fight for…and paying for.

What the Government proposes to do is to create the Bank of the Treasury that would replace the Central Bank in these activities. Thus, institutions will not get their money until they need to use it. This will reduce the financing needs of the Government as it will be able to reduce the amount of debt issued in local currency and will allow for the more efficient use of Government resources.

This is a great idea if it is implemented efficiently and correctly and I applaud laud and clear the initiative. There are some negatives to it, but they are minor compared to what is at stake:

-Banks that have large Government deposits will suffer and have problems short term as these deposits are withdrawn from it. The Government should have a transition period in order to prevent a crisis at some financial institutions.

-Some Government institutions have actually used these deposits as a way of generating additional income to fund their activities. In particular, some institutions use this interest income to pay salaries the first few months of the year, since the Government takes time to approve and fund the budget every year. Most institutions doe not get any money until March each year. These institutions will have to learn how to live without these extra funds.

This is not the first time the idea of a bank of the Treasury has been floated. Let’s hope it gets beyond the idea stage and it works. To me the savings in financing, the elimination of the associated corruption and the efficiencies introduced would make this a giant step towards improving Government finances.

Hold on to your seats! Get ready! I am about to say that the Government is proposing to do something which I think is good, maybe I think it is very good! Basically, it is one of the few proposals in the last five years that really attempts to tackle a structural problem in the Venezuelan economy. But let’s start at the beginning:

Currently, when the Government sends funds to any Government institution, office or Ministry, it orders the Venezuelan Central Bank to deposit the funds on behalf of that Government organization at a private bank. The Central Banks deposits typically a month or more of the institutions budget.

These Government’s organizations, typically deposit those funds in interest bearing accounts. Now, what is perverse about this is that 60% of the amount in deposits of the Venezuelan private banking system is invested in Government bonds and Treasury bills. Thus, the Government pays banks interest so that banks can pay a lower interest to Government organizations that have funds idle in the private banking system.

This is obviously quite perverse and inefficient. Perverse, because the Government is financing banks, so that banks can pay these Government institutions. While this had always happened in Venezuela, the difference is that these funds represented 4-5% of all deposits in the Venezuelan financial system five years ago, but represents 37.5% of deposits today! This is simply huge!

But it gets worse, since Government officials have discretionary power over which banks these funds are deposited in, this ahs become one of the largest sources of corruption in Venezuela today. Many banks, I will not mention names, actually pay commissions to Government officials, treasurers and administrators to divert deposits their way, whether they pay the highest interest or not. So, this is a huge business for private banks, which coincidentally have been making obscenely huge profits in the last few years. Now, not all banks play this game, but there is a large group of banks whose deposits have grown rapidly in the last few years.

To give you an idea of orders of magnitude, deposits in the banking system are like US$ 17 billion of which about 40% receives interest. However, man time Government institutions do not deposit directly but do a repo (Repo= Repurchase agreement. A financial institution “sells” a financial instrument to someone with an agreement to repurchase it at a future date) with the bank, some that the bank does not have to reserve in the Central Bank. So, rough numbers, we are probably talking about a total of US$ 30 billion with 40% owned by Government institutions or some US$ 12 billion. Now, spreads are typically 8-9% in the banking system, so we are talking about roughly a billion US$ I n revenues for the banks, A very nice piece of change, worth fight for…and paying for.

What the Government proposes to do is to create the Bank of the Treasury that would replace the Central Bank in these activities. Thus, institutions will not get their money until they need to use it. This will reduce the financing needs of the Government as it will be able to reduce the amount of debt issued in local currency and will allow for the more efficient use of Government resources.

This is a great idea if it is implemented efficiently and correctly and I applaud laud and clear the initiative. There are some negatives to it, but they are minor compared to what is at stake:

-Banks that have large Government deposits will suffer and have problems short term as these deposits are withdrawn from it. The Government should have a transition period in order to prevent a crisis at some financial institutions.

-Some Government institutions have actually used these deposits as a way of generating additional income to fund their activities. In particular, some institutions use this interest income to pay salaries the first few months of the year, since the Government takes time to approve and fund the budget every year. Most institutions doe not get any money until March each year. These institutions will have to learn how to live without these extra funds.

This is not the first time the idea of a bank of the Treasury has been floated. Let’s hope it gets beyond the idea stage and it works. To me the savings in financing, the elimination of the associated corruption and the efficiencies introduced would make this a giant step towards improving Government finances.

Carlos Alberto Montaner hits on Chavez with this byline in his article “Chavez and Fear” (thanks M):

Hugo Chavez has begun to kill and repress selectively
Until now, the murders — and they add up to about 100 — have been random.

I love the shot at the Carter Center at the end:

By validating that monstrous swindle, the Carter Center and the OAS demoralized and disarticulated the opposition, placing all of the nation’s reins in Chavez’s hands. Then they washed their hands and left. But that’s not even the worst part. The worst part is that Chavez, arrogant and willing to kill, will metastasize throughout Latin America. We’ll see.

Carlos Alberto Montaner hits on Chavez with this byline in his article “Chavez and Fear” (thanks M):

Hugo Chavez has begun to kill and repress selectively
Until now, the murders — and they add up to about 100 — have been random.

I love the shot at the Carter Center at the end:

By validating that monstrous swindle, the Carter Center and the OAS demoralized and disarticulated the opposition, placing all of the nation’s reins in Chavez’s hands. Then they washed their hands and left. But that’s not even the worst part. The worst part is that Chavez, arrogant and willing to kill, will metastasize throughout Latin America. We’ll see.