How To Get a Contract to Build Housing in Venezuela Without Even Existing

May 7, 2012

According to Argentina’s El Clarin, on the same event that Chavez gave Cristina Kirchner the picture of her husband (above), agreements were signed for US$ 1.6 billion dollars between the two Governments. One of them, was a contract to build 10,000 housing units in Carabobo State in Venezuela by a company by the name of CONLAT.

This all happened on December 1st. 2011.

The funny hing is, CONLAT did not exist. In fact, it was not until more than three weeks later on Dec. 26th. that CONLAT Construcciones Latinoamericanas began to exist, as another company Consular Latinoconsult changed its name to CONLAT.

According to El Clarin, even today, those working in the “Gran Misiion Vivienda” in Venezuela know nothing about CONLAT, its project, nor any formal process to have the contract awarded.

All that is known is that the owners of CONLAT/Consular are people who gave to Mrs. Kirchner’s campaign and that are reportedly close to none other than Argentina’s Minister of Planning Julio de Vido, who always appears involved in things having to do with Venezuela, such as the infamous maletin. .

Thus, while Venezuelan companies who want to participate in building housing, no matter what experience they have, have to provide all sorts of documentation and guarantees, besides having to wait months to be approved and years to get paid, foreign fly by night operations with connections to revolutionary foreign Governments can get the go ahead even before they exist.

I guess that is why they call themselves revolutionaries, they definitely do things differently. That’s how their associates go from revolutionaries to millionaires in a short period of time.

Posted in Uncategorized | 44 Comments »

Contrasting Reactions To A Video And The New Cadivi Student Rules

May 5, 2012

I am a little bit puzzled by the reaction to  a bunch of young kids who made a video about Caracas being a city of farewells. I found the whole reaction simply astonishing, the kids did not say anything new, they said what I hear every day whenever I am in Caracas. In fact, try to hire a recent graduate on any Major and you get the response: “Oh no, except for me and a friend, all my classmates have left the country.”

It’s a reality, kids don’t go out at night to party for fear of being kidnapped. Yes, they risk it sometimes, but when they visit their buddy at a US or European University (Thanks to Cadivi dollars)  they see a totally different attitude, people party all night and walk home without worries.

What’s not to like.

And while the video may be from kids from the East of Caracas, I am sure the felling is the same everywhere. Don’t you think the kid in Petare or San Cristobal wants to leave to? Of course they do.

In fact, in my experience, it is the middle class kids who actually look back. The Venezuelan waitress at the Chinese restaurant (no joke) or the Direct TV installer, has no money to go back and check things out. They leave, they don’t look back, they start a new life, learn a language, they don’t read Caracas Chronicles, nor the Devil nor Daniel, life is still tough, but they have a car and rent an apartment and food on the table. It is a far cry from the rancho and Venezuelan reality.

But while the video generated a reaction, I find it funny that the reaction to CADIVI limiting what careers they finance abroad faced such criticism.

Come on! It is the same kids you saw in the video that want money to study marketing and finance and journalism and whatever else their heart desires.

And guess what? They have no plan to come back to Venezuela. The cheap dollars they are asking from CADIVI is their ticket out of the country. And anyone that can get it, will simply grab it!

But remember, this is a revolution. The amazing part is that the Government wants to give CADIVI dollars to study anything other than Marxist  Economics, Socialist Planning or Advanced Cuban Spying. It is just another revolutionary contradiction or stupidity.

Thus, I find it ironic that people criticize these kids for wanting to leave and criticize CADIVI for not giving money for careers that are non-essential, when even those studying the “essential” ones are just looking to leave.

The truth is the kids simply said what a lot of people are thinking (I only watched half of it, did not have the patience) Many don’t leave, because they can’t, they are afraid or they really want to stay. That’s what a democracy is all about. Different opinions, different criteria, different thoughts.

But you can be sure these kids are not anomalies.

Ten years ago, the video was “Cedula Ciudadano” :

Five years ago, it was “Secuestro Express“.

Thirty years ago, there was no “youtube”, otherwise we may have seen: “How to get a beca and come back rich to Venezuela”

That is no longer possible…

Posted in Uncategorized | 42 Comments »

The New Labor Bill: Lots Of Smoke And Mirrors And Few Whistles

May 3, 2012

For thirteen years we heard the promises of a new Labor Bill to return to workers what had been robbed. For thirteen year the mandate to go back to retroactivity was ignored. For months we have been hearing what a glorious day this was going to be for workers. There were celebrations. Not until the Bill was signed did we learn the details. And now we learn:

The Bill has lots of smoke and mirrors, but in the end, it has few whistles.

Take the promise to go back to retroactivity. As Petkoff explains today in his Editorial, it turns out that the “bad” system is better, unless you have worked for the same company for a long time, something like thirteen years. Thus, in the end, most Venezuelan workers will see nothing new going forward, Chavez changed very little, the “bad” old system was better, thus the law lets you choose between the two. Bt most likely you will take the old “bad” law, not the revolutionary one.

However, remember those interest rates on severance, which used to be paid at the average between the lending rate and the savings rate?

Well, the revolution now shortchanged workers by saying it will beat  the much lower savings rate from now on. And the workers probably don’t yet know it, after all the hullabaloo about the greatest Labor Bill on Earth of the last few days.

And remember how excited you were by the work week being shortened by four hours a week?

Shucks, it only applies if you work more than 40 hours a week.

And remember the Government managed pension fund?

Well, when 75% of private workers took their money out when the news leaked, the Government decided to make it optional. Which means that most people will continue to use the “old” and “bad” system of having your company deposit the money in a bank where you will have quick access to your money.

And the extra holidays by Law?

Let’s see, Dec. 24th., Dec 31st and Monday and Tuesday of Carnival. When was the last time you did not take one of those?

So, where are the whistles in the “revolutionary” Bill? They are in an extra eight weeks of leave when you give birth, increasing it from twelve to twenty weeks, the elimination of outsourcing and the fact that a worker is only temporary for the first month.

Jeez, what a Bombastic Bill (yes, with a capital B on Bombastic), all that celebration for so little. Chavismo saw directly into the eyes of the old Bill, cried foul, but had no clue about what it said. Numbers are just not their forte, ask Giordani, he is the expert. Chavez offered, they celebrated, and now they are waking up from their drunkward spree to find out they are not much better off than they were.

Oh yes, there will be fines and even jail in some cases if you don’t obey the law. Curiously, it is the Government that will not be able to comply with the details of the new Labor Bill. But we know Justice does not apply to them.

A revolutionary rip-off if I have ever seen one. Trabajadores y Trabajadoras.

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Some Things You May Have Missed In The Noise Of The LOT And Venezuela’s Proposed Withdrawal From The CIDH

May 2, 2012

While everyone has been paying attention to the details the new no-longer-secret Labor Bill (LOT) or whether or not Venezuela will or not withdraw from the Interamerican Human Rights Court, you may have missed many of these details of things happening at the same time:

-While President in pectore Maduro says that the new Labor Bill is the product of ten years of discussion, the truth is that the Chavista Government has simply ignored the issue. The 2000 Constitution mandated a new Labor Bill within a year, but Chavismo has never been the best friend of the workers or unions. In fact, the whole strategy has been all along for Chavez to be the President of the destitute, the unemployed, the one most receptive to receive gifts in exchange for votes. But with elections six months away, polls show that it is the working people who have turned the most against Chavez, thus the need to rush an improvised Bill, which will need lots of regulations in the future and contains a vacatio legis of a year in many cases.

-And while few paid attention, the “official” media spent the morning on Monday saying Chavez would sign the Labor Bill at the Teresa Carreño Theater, everyone who is anyone within Chavismo was there, but it was not to be. Despite all the efforts, the pain was too much and the President did not want to be seen in public in a wheelchair. Thus, “some” of the guests, curiously the civilians, were taken to the Miraflores Palace at the last minute, leaving the “people” and the military at the theater wondering what the hell had happened. The military was not too happy about it, least of all when the “Council of State” was finally appointed (another 12 year delay) with only civilians to “advise” a President that seldom accepts any advice.

-And yes, many thought the act was not taking place in the Presidential palace, as it did not look anything like the usual setting there. The whole thing had to be improvised, leaving sufficient space behind the lectern for Chavez to be wheeled in. Thus, the youthful low quality picture of Bolivar, the huge space behind the lectern and the limited space in front that left the military wondering why they were left out of the show and new civilian faces were brought in.

-And it gave people no comfort that German Saltron, Venezuela’s representative at the Interamerican Human Rights Court said that the Court was partial against Venezuela. Funny, there have been hundreds of accusations against Venezuela and hundreds of orders that Venezuela protect people and reporters from human rights violations. Despite this, the Venezuelan Government has acted in very few instances. Note too, that the Court has not been allowed to visit Venezuela since 2001. You have to wonder why? Is it the Court that is partial against Venezuela or is it Venezuela which consistently violates a human rights treaty that has Constitutional rank in Venezuela?

-And today to celebrate an exhibit incongruously named ExpoFonden, the Air Force had two Sukhoi’s fly over Caracas (one above), just to add to the general state of anxiety and nervousness in the population. It is a funny way to celebrate Fonden’s contributions to “development” to have these multi-million dollar planes fly over Caracas. Just think, one hour of a Sukhoi flight costs north of $40,000, but the robolution could care less.

-And in a country with the most incredible oil reserves in the world, the Minister of Energy and Oil denies there are gasoline shortages. Ramirez says that the problem was limited to “some” gas stations and it was due to the need to supply diesel to power plants. However, few cars in Caracas or Venezuela use diesel and the lines were huge on a holiday morning Tuesday. Some of my friends spent over an hour getting gas and others got so sick of it that they just went home. Another triumph of the revolution!

Posted in Uncategorized | 38 Comments »

Chavez Signs New Labor Bill, But Details Unkown

April 30, 2012

In a well staged ceremony, up to the point where President Hugo Chavez broke down at the very end (see video above), the Venezuelan President signed into Law one of the most important Bills for the Venezuelan economy: The Labor Bill. A few hours after it was signed, we still know little about it, except for some of the tweets by the President and leaks of drafts of the document, which we still don’t know whether they contain what was approved in the end.and signed into Law by the President.

Despite this, Chavista unions celebrated without knowing the details, and Government officials claimed that no Bill had ever been consulted so much, despite nobody knowing its contents.

This is in contrast with the three way committee of Workers, Government and the Private Sector, which hammered out a new Bill in 1998, led by Teodoro Petkoff.  A Bill that eliminated the retroactivity of severance pay, which studies had shown was the main limitation in creating jobs at the time. But much like the President’s health treatment (and I am not referring to this), Chavismo does not believe in calculations and techniques, they do everything by the seat of their pants, always hoping and asking for miracles, of which they have had a few. But maybe Chavez’ emotions reveal that a huge miracle is needed now.

Curiously, it was only the Government which did not comply with the 1998 Labor Bill, from its mandate to create pension funds with workers contributions, to that of paying off severance for each worker every year into a trust. But, despite this, the Chavez administration passed this new Bill, looking for votes, which reportedly reduces the work week from 44 hours to 40 (reportedly by saying that if you work Saturdays, you no longer do, other workers remain on the same 40 hour work week) and gives two years paid maternity leave, even if you adopt. But the Government is, once again, unlikely to be able to comply with the1 Bill, given its higher demands on the national budget.

But studies show that retroactivity, whereby you get paid severance for all the years you worked at the last salary you made, is simply bad for the Government and companies in an inflationary environment like we have, as shown below:

Basically, the bars show the impact of the law on a worker with 1, 5, 10, 15, 20 and 25 years under the current law or with the new Bill with o% (gray), 10% (blue), 15% (gray) and 25% (black) inflation. The number on top of each bar is the number of paid days that each worker would have to take home if he quits (twice if he is fired). As you can see, it simply gets worse the higher the inflation, which with something like today’s inflation is triple what it would be under “normal” inflation.  But the Chavez Government still believes that inflation is to the lack of supply of goods, not to the excess of money their generous printing has generated.

But the biggest head fake in the law, is that none of this will need to be implemented for one year. A full year to get rid of workers and implement measures, never mind that the elections are in October.

Of course, the whole thing is illegal anyway, as it is being approved under a law to deal with the emergency with the flooding and the housing problem, which is quite a stretch, but laws and rules is not what Chavismo is all about.

Oh yeah! Chavez said the Bill ends what he calls “Tercerizacion”, the local word for outsourcing. I am not sure how it manages to do that, but I have to ask: What will he do with the Cuban workers? After all, that is all he does with the Cubans: hire a Cuban company or the Government directly, and give the workers as little as possible. Once their “tour of duty” is done, they are shipped back home, but their company keeps providing the same service, without the workers getting the direct benefits.

But if it is “socialist” and Cuban outsourcing, it must be all right. The Bill will surely provide for that.

Posted in Uncategorized, Venezuela | 98 Comments »
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Notes From A Visit To Revolutionary Venezuela

April 28, 2012

After a week in Caracas, where traffic has become absolutely unbearable, here are some things I heard:

-I met with my original “Chavez is sick source” who in May said that Chavez was sick, leading to my completely forgotten post, which was the first one on the matter. Well, turns out my source knew about it since February 2011. One day the whole story will be told and we will find that Chavez’ failing will be the same one that did him in in so many areas: A total disregard for expertise and know-how.

-In Chavez’ absence, the financial part of the Government is sitting there doing nothing. Giordani does not listen to Jaua, Merentes is ignored. The Central Bank needs a bond issue of either PDVSA or Venezuela bonds to supply its SITME foreign exchange system, but absent the All Mighty, nobody dares make the decision and he has paid little attention to the matter.

-Reporters in Caracas are seeing more contacts from high Government officials, curiously all of those with Presidential aspirations, than they have seen in thirteen years. Jaua sends half a dozen press releases every day, Ramirez has been calling reporters that he blacklisted in the past, Jorge Rodriguez thinks he could be anointed successor, while Diosdado has become the traveling President of the National assembly. Even Aristobulo has shown some interest. Only Maduro has been quiet on that front, which may mean absolutely nothing no matter what Bocaranda may say.

-After talking to many people, I came away with a feeling that Chavez may name a new Vice-President, Jaua is simply not liked, but he will not name a successor any time soon. This is better for the opposition and a very dangerous game for the revolution. If Chavez is not seen in public designating someone as the the heir to his revolutionary ideals, there will be a fight to death among various Chavista factions.

-While much has been made over the speech by Portuguesa’s Governor at PSUV’s campaign command meeting, I think the whole thing was overblown. Castro Sotelo is in charge of planning and he presented scenarios, one with a weakened Chavez, one without Chavez and one with no elections. But in his scenario (and in his speech), it is the opposition that does not want the election, not Chavez’ party. Go figure.

-Most local companies refuse to discuss publicly the impact of the new cost and price control Bill on their finances. They are simply paranoid about the Government even getting a hint that they are complaining. But Procter and Gamble guided down its profit forecast for the year, as Venezuela’s controls have chopped prices up by as much as 25%, cutting worldwide profits by 3%.

And yes, tomorrow is my predicted date, it may not happen, but I will not be that far off.

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Chavez Government Finds It Hard to Distance Itself From Aponte^2

April 24, 2012

Chavez and Judge Aponte^2 in better times for both

The Government continues to try to distance itself from the Aponte^2 case and make it go away, but it is finding it hard to do and the more things are said, the worse it seems to become. This is the type of issue that Chavez would have coordinated rather well a couple of years back, but his absence and attention to other matters, is now noticable when things like this happen.

The initial reaction seems to have been to depict Aponte^2 as some sort of opposition crook, when Aponte^2 had sterling revolutionary credentials, down to the military uniform he left behind, his unorthodox path to the Supreme Court and the many honors and Presidential hugs he received.

And Chavez may argue that the revolution got rid of Aponte^2, but it really didn’t. Aponte^2’s relationship to Makled has been hanging in the air for a couple of years and all that the revolutionary Government really did was to get rid of him as a member of the Supreme Court, using the seldom convened Moral Council to impeach him.

But the process simply ended there. The General Prosecutor did not charge him with crimes. There was no order to stop him from leaving the country. The DEA did not help Aponte^2 escape like some Government spokesmen want us to believe, he just left.

And Chavez tried to disregard the news as not being very important, calling Aponte^2 a “criminal”, which he is, but it was a criminal that Chavez personally brought to the highest levels of Venezuela’s Supreme Court because he was a loyal former revolutionary and, even more importantly, a former military officer, loyal to the very end. Aponte^2 was really a creature of the revolution, like so many around.

And Chavez really screwed up when he brought up the case of Antonini and Maletagate. This flagrant case was never investigated in Venezuela and the record in the US trial shows that the Head of Intelligence told Antonini that Chavez personally had authorized paying him to keep him silenced.

And Chavez somehow tried to make a parallel between the two cases, saying Antonini was also a crook. Yes, another special purpose crook, made and created for and by the revolution.

But if there is a mystery in all this, is that the only person that attended the supposed meetings at the Presidential Palace on Fridays that has spoken out was Vice President Jaua, who did not address the issue, but simply spoke to disqualify Aponte^2. But we have yet to hear from either the President of the Venezuelan Supreme Court or the General Prosecutor, both of which Aponte^ 2 accused of participating in these meetings. Could it be because they want to make sure Aponte^2 shows no proof of this, as has been reported in the media he will or did?

In fact, the Government would have been better off making noise, calling for a full investigation, instead of calling for a silly proclamation by the Assembly “rejecting” Aponte^s statements or bringing up some vaporous accusation that two opposition Governors have been laundering money.

The circus is not working, because the crooks were created by the owner of the circus, Hugo Chavez, but everyone knows they worked for the circus and they would have never gotten there on their own merits. They had none.

Posted in Uncategorized | 87 Comments »

Friday Evening Musings about Venezuela After a Long Day

April 20, 2012

1) News Item:  El Assiami  presents proof that there are links between Makled and Aponte^2:

The Devil presents proof that there is also a link between Adan Chavez and Aponte^2:

What’s stronger link, an envelope you write to someone or a book you dedicate to someone, or a ceremony you hold as Governor to honor a buddy.

You be the judge. (Pun intended)

2) El Assiami: DEA helped the escape of Aponte^2

The Devil: Aponte did not escape. Like so many other Chavistas, he was removed but not accused. It’s how they work, they get rid of them, but never accuse them of corruption, they just let them be. So many cases, Antonini, Illararamendi, Duran, Casas de Bolsa. Where are they now…

Except they went quietly, not like the dishonourable Judge.

3) Finally, the Devil would like to note: Today we had the best or second best daily rally in Venezuela and PDVSA bonds that the Devil has seen in his life. I find it hard to believe that this was coincidental. Within an hour, at around 10:30 AM,  PDVSA bonds went up 5-6% this morning, while Venezuela’s bonds went up like 2.5 to 3%. Since Chavistas are just as good as regular Venezuelans in using privileged information, I can’t help but wonder if something dramatic is afoot. I may be wrong, but if I am right, my prediction of the demise before my birthday, which is in nine days, is doable. We shall see…

Posted in Uncategorized, Venezuela | 75 Comments »

The Aponte^2 Interview: Direct From The Cesspool Of The Revolution

April 19, 2012

Let’s see: a former Military Prosecutor, who becomes a Venezuelan Supreme Court Justice, revolutionary at that, placidly goes on TV and reveals that he has the ethics and morals of a Pleistocenic insect, tell us that he is being accused wrongly and impeached and thus he needed to leave the country and “clear his head”. He complains that nobody “defended” him, on either side. He tells us that the man accused of being a drug capo, Walter Makled, was a “”Gran Señor” in his town of Valencia. And he does not recall whether he gave Señor Makled an ID saying that he was an Inspector for the Military Prosecutor’s office, because he just signed so many of them for his friends, for other Prosecutors, for the buddies of military officers. And he wants to clean his name and his reputation.

-Can a bath in hydrochloric acid “clean” this guy’s reputation? Can his name, covered with grime, be mentioned in any positive fashion?

He then says he was a prominent member of the judicial power and he was asked to manipulate justice. (We knew that). He says Chavez called (No surprise there, even if the case was not that relevant) and asked that he “manipulate” the case. He got “an infinite” number of calls from the General Prosecutor to do things the way she wanted, including the infamous Mazuco case, in which a false witness was found to say that Mazuco killed someone. But the only times he shows some emotion (not much) is when he talks about being betrayed. That seems to be his main anger, not that he was part of the cesspool of the revolution, but that he was kicked out of it. The guy even says that they wanted to obliterate his “prestige”.

-What the hell is this guy talking about. What egg roll or drug does he regularly smoke? His “prestige”, gimme a break!

And the President of the Supreme Court would call him to twist Justice. And he says that they surely blackmailed bankers, but shows no proof, he just thinks so. But every Friday morning, at the Vice-President’s office there is a meeting, he went sometimes, between the President of the Supreme Court, the Attorney General and the General Prosecutor and police heads, where the orders for how Justice will be implemented this week are given. case by case, according to the “politics” of each case. He then tells us about his CV, but it appears CV for him means “loyal” to the revolution and the Government, read loyal to Hugo Chavez.

-Strange concept of having a good CV, a “neat” or a “clean” trajectory. No?

We are then told about how drugs went to military facilities and he knew about it. Someone from the President’s office called him to intervene in a case. Minister  Baduell also called, Minister Rangel Silva, General Carvajal. A stellar parade of revolutionary military leaders, past and present ones, all educated at the highest levels of our military. All of them knew that the drugs were kept in the military facility for “protection”. Nothing extraordinary there. That was the only “drug” related case in which he intervened. The case ended there, it was closed. His “only” drug case.

-Only? To me that alone is a CV that says I want nothing to do with Aponte^2.

He then tells us that the Director of the Anti-Drug office is the drug czar in Venezuela, together with General Alcala. He has no proof, but he says it is. Oh yeah, he was told not to touch the FARC. Minor factoid. He then tells us he manipulated the case of General Uson, who was jailed for five years. He got order to do it. If he did not obey, he was out. There goes that CV! Same with Baduel’s case. But hey, he says he is innocent in the Makled case, no remorse on other things, except he was unfairly charged. And yes! if it is to “clean” his name, he would testify.

-This guy has no understanding of his moral and ethical responsibility for what he has done. the only thing he cares about is that he was accused and impeached. Can one even believe all he says?

And now he may write his memoirs! This guy is truly a piece of cake. Who wants to read his “Memoirs”? Finally, at the end, he admits some culpability. He says the whole judicial system is contaminated. All decisions are “consulted” with the Government. But now he wants to fight for Justice and sends messages to Venezuelans about Justice and the future.

This is a glimpse into the cesspool of the Bolivarian revolution. This is a military officer, corrupt and unethical at heart. Who appears to be only mad at the fact that he was impeached.Who shows little remorse for what he did. Who still thinks he has a trajectory or a career to show or be proud of. If this is the military officer that got to the be Military Prosecutor and Supreme Court Justice, imagine the lower ranks! Imagine those with less Education!

This is what Chavez and his cronies have created. This guy should be tried some day in Venezuela for what he did to others. For how he violated the law. For being a traitor to the oath of his offices. This guy shows us why the easy part in the reconstruction of the country will be the economic one. The tough part will be the reeducation of a country filled with people in important and less important positions with this type of mentality. The tough part will be weeding out characters like Aponte^2, most of which will start crying “foul” when a new administration wants to get rid of them.

With moral values like Aponte^2, the task at hand may not only be very difficult. It may simply be impossible.

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PDVSA’s Idiotic Financial Strategy

April 18, 2012

I like going through financial statements. I like understanding them, going through things, trying to figure out what is important and what is not. PDVSA’s used to be one of my favorite’s, there was so much to learn and understand there. Nowadays is not the same. While the financial numbers may be “correct” the underlying data is not. You can’t believe oil production or local oil consumption. Investment numbers are almost irrelevant, if credible.

The financials are so simplistic that our good friend Setty has told us that the half a billion dollars lost to the Illaramendi funds,. does not even deserve a mention in the financials, by PDVSA or by the auditors. Go Figure, half a billion dollars ripped-off, the company (we are told) replaced the money and this does not even deserve a note from the auditors!

So, I read the financials, without much interest, sure they generated revenue of US$124 billion, PDVSA now has 121 thousand workers versus 40,000 when Chavez decided to integrate into the Government by firing half the workers. Yadda, Yadda, Yadda!

But one thing did catch my attention, in 2010, PDVSA had “Accounts Receivable” for US$ 14.8 billion. For the uninitiated, this is money owed to PDVSA. Remarkably, this went up a lot from 2010 to 2011, a lot like more than doubled at US$ 30.88 billion.

Where did this doubling come from? Well, about US$ 6 billion of the increase came from “Energy Agreements” read oil shipped to other countries like Argentina, the Caribbean, Bielorussia and the like, which PDVSA sells to these “friendly” countries 50% up front, two or three years grace period and then last we hear, a twenty five year loan at 2-3% per year.

Another US$ 6 billion, came from “related entities”, these are things like Corpoelec and Pequiven, which simply don’t pay their oil bills to PDVSA. So, not only is PDVSA forced to give money to Fonden, which Fonden later gives to Corpoelec to fund projects, but these same projects use up oil, diesel and the like, but Corpoelec has no money to pay for it.

Would you run your family like this? Lend your son money, so he can start a business which runs on oil that you sell to him, but he never pays. Some business!

But the most remarkable thing, is that during 2011, PDVSA’s financial debt went up by US$ 11.1 billion, from US$ 21.3 billion to US$ 32.4 billion. The new debt comes mostly from new bonds issued with coupons as low as 8.5% and as high as 12.75% per year, say an average of 10% per year.

The bottom line is that PDVSA is paying over US$ 1 billion a year in financing, so that our wealthier friends in Argentina, Belaruss and the Caribbean (The exceptions are Cuba and Haiti, which are poorer) can have our cheap oil.

This is an idiotic financial strategy. As idiotic as can be. A country with poverty, a company with immense financial needs to even maintain production, should not, can not fund wealthier countries, so they can drive around further distances at cheaper prices, or stay warm, while Venezuelans die without medical service.

This is absolutely idiotic, this is treason, this is total disregard for your own people.

But these people have lost the notion of scale and magnitudes. To them a billion here a half a billion there is rounding error, while the truth is that each half billion can build a few dozen hospitals or a few thousand housing units.

But the revolution no longer cares. Survival is the name of the game. It is no longer the optimum allocation of scarce resources, but the optimum allocation of resources for reelection  and political gain.

Idiotic!

(BTW PDVSA’s financials are in PDVSA’s webpage, however, PDVSA must be the only company with a webpage that when you click on a link, the URL stays the same. Just go http://www.pdvsa.com, then click on Informes Financieros and then click on them, the URL will not change. I also tried to follow the route of these receivables and found it funny: One note would send me to another, which would send me to three others, which would send me to the original one. Very circular.)

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