The Devil's Excrement

I have been extremely busy this week. A lot has happened that should be posted about, but I had little time to do it. Thus, a short wrap up of important news this week:

-Chavez shakes up military authorities. President Chavez changed the Minister of Defense, removing retired General Prieto and replacing him with his buddy, classmate and soul mate General Garcia Carneiro. Garcia Carneiro’s position as Chiefs of Staff will be filled by General Raul Baduell. Baduell is the General that single-handedly forced the return of Hugo Chavez in April 2002. there have been many interpretations as to the meaning of the move. Some think Baduell was weakened by going to an administrative post. Others think Baduell is outright pro-Chavez and it is irrelevant. My understanding is that Baduell not only feels that the Constitution has to be followed by Chavez, but that he has told the President so. Baduell has political ambitions of his own and Chavez knows it. To me Baduell is dangerous because in any conflict he could come out on top and forget about the law if he can grab power. For the same reason he will not allow Chavez to grab absolute power if he tries. He thinks he is much better.

-While Chavez keeps complaining about the fact that banks don’t lend to the agricultural sector the amounts required by law and prefer to pay fines, Banco Industrial de Venezuela, the largest state-run bank, has the smallest agricultural portfolio in the banking system.

-All major and minor political parties, except Primero Justicia and Proyecto Venezuela, have informally told the Coordinadora Democrática that they will join the movement to field single unity candidates for all Governorships and Mayoral races. Primero Justicia is likely to join the effort putting the pressure on Proyecto Venezuela to join. This effort, if successful, would according to polls win most Governorships in the country.

-Despite the fact that it is illegal to declare candidacies until February 25^th. now that the date for regional elections ahs been set for July 25^th., Chavez’ MVR party announced its fourth candidate for Governor. This time Ramon Machuca declared his candidacy for Governor of Bolivar state.

–Venezuela issued a 30 years bond at a yield to maturity of 10.25%. The US$ 1 billion issue was oversubscribed by a factor of four. With this issue the country has a very well defined yield curve for the first time in its history. The Minister of Finance, who knows what he is doing, said that the funds would be used to pay Bolivar denominated debt. If true this is positive, but I suspect that political pressure will in the end prevail and new local debt will be issued anyway.

-Both Colin Powell and Condoleezza Rice, separately called on the Chavez administration to stop throwing stumbling blocks in the path of the recall referendum and allow the process to continue.

-The Caracas Stock Exchange rose 15% in the first five days of the year. A combination of cheap valuations, expectations of change and a strong devaluation of the currency in the last two weeks of 2003 were the main reasons.

-A report from Chavez MVR party to the President leaked to the press. In it, it is recognized that the opposition gathered more than three million signatures but 400,000 less than it claimed (just over three million according to the report). The report continues by saying that 30% of them “can” be invalidated, which would stop the referendum.

I was not going to mention the visit by US actor Danny Glover until I read a very funny article in Tal Cual written in pseudo-English by Laureano Marquez (who calls himself Laureass Marquez in the article). Then Guillermo saved me the trouble by posting it in his blog, so why duplicate? I do want however to quote one of my favorite parts from the letter:

“Our government, a difference of yours, no fuk only a blacs, sino a all of us parejo. I don’ t know if I am explain. We don’ t have blacs who like to be guaits an somete itself to a process of blanqueition, like Michael Jackson., ni de pod. Here never a blac woman have to stand up of the seat because a guait don’ t have seat, we like very much blac woman, because they are very good. Here the word “negro”, “negrita” shows love.”

In any case, since I am touching on the subject, all Mr. Glover has shown to me, among other things is that:

-He is arrogant. When asked by a reporter if he was only going to get the Government’s view about Venezuela, he got pissed, snapping back that he was here to meet with the “people”. Well, he was holding a press conference in the office of the Vice-President of Venezuela, where among other things it was announced that he will take part on Sunday in President Chavez’ Sunday TV program.  These are not exactly the “people” in this country.

-He is ignorant. He defends the right for Cuba to be a totalitarian regime on the basis of the country’s “sovereignty”. Well, Cuba attempted to overthrow Governments in all of Latin America, including plotting to kill Venezuelan President Romulo Betancourt. Cuba sent soldiers to Angola, interfering with that countries “sovereignty”. Finally, Mr. Glover himself worked very hard to destabilize another “sovereign” country, South Africa, without respecting that same principle he so eagerly defends now.

-He is insensitive. He claims to be here to see the status of black people, how free they are and that they are treated equally. But he fails o voice his concern for the three young black men, sentenced to death by firing squad for hijacking a ferry to get out of Cuba. Nobody was even injured in that incident.

-He is naive. He defends a white dictator who jails black poets, writers and artist for the simple crime of speaking out against him. Does he realize that if he lived in Cuba he could not voice his opinions which he is allowed to broadcast freely in his country because there is a true democracy?

Jeez, maybe that toilet explosion left some permanent brain damage!

I was not going to mention the visit by US actor Danny Glover until I read a very funny article in Tal Cual written in pseudo-English by Laureano Marquez (who calls himself Laureass Marquez in the article). Then Guillermo saved me the trouble by posting it in his blog, so why duplicate? I do want however to quote one of my favorite parts from the letter:

“Our government, a difference of yours, no fuk only a blacs, sino a all of us parejo. I don’ t know if I am explain. We don’ t have blacs who like to be guaits an somete itself to a process of blanqueition, like Michael Jackson., ni de pod. Here never a blac woman have to stand up of the seat because a guait don’ t have seat, we like very much blac woman, because they are very good. Here the word “negro”, “negrita” shows love.”

In any case, since I am touching on the subject, all Mr. Glover has shown to me, among other things is that:

-He is arrogant. When asked by a reporter if he was only going to get the Government’s view about Venezuela, he got pissed, snapping back that he was here to meet with the “people”. Well, he was holding a press conference in the office of the Vice-President of Venezuela, where among other things it was announced that he will take part on Sunday in President Chavez’ Sunday TV program.  These are not exactly the “people” in this country.

-He is ignorant. He defends the right for Cuba to be a totalitarian regime on the basis of the country’s “sovereignty”. Well, Cuba attempted to overthrow Governments in all of Latin America, including plotting to kill Venezuelan President Romulo Betancourt. Cuba sent soldiers to Angola, interfering with that countries “sovereignty”. Finally, Mr. Glover himself worked very hard to destabilize another “sovereign” country, South Africa, without respecting that same principle he so eagerly defends now.

-He is insensitive. He claims to be here to see the status of black people, how free they are and that they are treated equally. But he fails o voice his concern for the three young black men, sentenced to death by firing squad for hijacking a ferry to get out of Cuba. Nobody was even injured in that incident.

-He is naive. He defends a white dictator who jails black poets, writers and artist for the simple crime of speaking out against him. Does he realize that if he lived in Cuba he could not voice his opinions which he is allowed to broadcast freely in his country because there is a true democracy?

Jeez, maybe that toilet explosion left some permanent brain damage!

Being rational is not easy. Trying to understand how things work as a way of forming opinions or proposing a better way of doing things may simply be futile in Venezuela. One of Hugo Chavez’ main problem as a President has been to surround himself by ass kissers or mediocre professionals for whom following the President was simply a way of advancing in their lives to levels orders of magnitude way above their  so called Peter Principle. But the more bizarre and irrational things get here in Venezuela, the more the lies and the stupidity become the accepted truth.  Thus, while Francisco Toro in  his latest post challenges anyone that can still support a government that pisses over the Constitution in order to steal from its own citizens (a challenge I was going to broadcast here, but which might also be an exercise in futility) and the Venezuelan Central Bank issues a press release explaining its role and why it can not simply give away any part of the international reserves, that depository of mediocrity, irrationality and irresponsibility called the National Assembly exhorts the Venezuelan Central Bank by a vote of 57 to 37 to “cooperate” with Chavez in  the request for his “millardito” (little billion). The discussion was so incredible bizarre, that the former President of the National Assembly William Lara even told the opposition not to worry that the money would not be used for the “political needs of the officials”. The only words missing appeared be “this time around”. Such is the callousness, cynicism and irrationality that permeates these individuals that rode Chavez’ coattails to positions beyond their abilities and interests and whose ethics leave a lot to be desired.

In the end, it may be us fools that spend their time writing in blogs, arguing, dreaming and discussing about a better Venezuela and trying to be rational about it, that are wasting our time. Maybe nobody will answer Francisco’s challenge, not because there is nobody who is ready to defend Chavez and his policies, but because those that still do, are not interested in creating a better Venezuela or truly solving the country’s policies, but simply are interested in preserving their own positions, getting richer and being on TV once a week. So, who cares about an intellectual challenge by a Caracas reporter-turned-oligarch (or is it the other way around?) who lives in Holland?

As a rational and educated individual, I always tend to believe that people are essentially good, well-meaning and honest. With time one learns this us far from the truth, but even that learning does not prepare you for how cynical, unethical or dishonest people can be. Fifteen years or so ago, part of the world was equally in love with the Sandinista revolution in Nicaragua as they appear to be in love with our President today. When one reads Guillermo’s translation of the interview of former Sandinista leader Ernesto Cardenal, one can’t help but link it directly to what is going on in Venezuela today. Cardenal quotes Galeano as saying: “Those who were not afraid to give their lives were afraid to hand over their Mercedes Benz, their houses, and the products of that robbery carried out by the Sandinista leadership.” It seems as if the same is happening here, the main difference being that in our case they were never even willing to give their lives for their cause, neither literally, nor figuratively…

I thought I had heard everything until Humberto (thanks, I also borrowed some of your comments!) pointed out these words today by Chavez in the same speech as in the one in he threatened to intervene the Venezuelan Central Bank. With these words it seems like this time Hugo Chavez has actually managed to out -Chavez himself.:

“We are overwhelmed by common thievery, subversion, contra-subversion, paramilitary forces, drug traffickers, all of that comes from Colombia, that was not born here and it has impacted us a lot”

Where should I begin? In one single and short sentence, and unless the Ministry of Foreign Relations issues a press release saying these words have been taken out of context, Hugo Chávez has managed to:

-Insult Colombians.

-Attack the concept of a single Bolivarian continent, which he previously praised.

-Make one of the most xenophobic statements ever made by a Venezuelan President.

-Blame the incompetence on his Government on another country.

-Shift the blame from poverty for our problems, to the citizens of another country.

-Ignore who is the one that has been careless about the border, including the protection of some of the people he mentions.

-Complete a sentence without blaming the local oligarchs for something.

-Outdone himself.

And I thought the previous post was hard to top…what a sad parody of a President we have!

I thought I had heard everything until Humberto (thanks, I also borrowed some of your comments!) pointed out these words today by Chavez in the same speech as in the one in he threatened to intervene the Venezuelan Central Bank. With these words it seems like this time Hugo Chavez has actually managed to out -Chavez himself.:

“We are overwhelmed by common thievery, subversion, contra-subversion, paramilitary forces, drug traffickers, all of that comes from Colombia, that was not born here and it has impacted us a lot”

Where should I begin? In one single and short sentence, and unless the Ministry of Foreign Relations issues a press release saying these words have been taken out of context, Hugo Chávez has managed to:

-Insult Colombians.

-Attack the concept of a single Bolivarian continent, which he previously praised.

-Make one of the most xenophobic statements ever made by a Venezuelan President.

-Blame the incompetence on his Government on another country.

-Shift the blame from poverty for our problems, to the citizens of another country.

-Ignore who is the one that has been careless about the border, including the protection of some of the people he mentions.

-Complete a sentence without blaming the local oligarchs for something.

-Outdone himself.

And I thought the previous post was hard to top…what a sad parody of a President we have!

The collapse of Parmalat is important for Venezuela. Some years ago, Parmalat came to Venezuela with a fat wallet and started buying properties related to the milk business including one of the largest milk producers in the country. In time, the company had many different brand names in milk (Parmalat, La Campina), Milk-based drinks (Riko Malt, El Chichero), Yogurt (Frigurt, Yoka), cheeses (Quenaca) and even fruits juices (Frika) and Tea. The company has about 15% of the liquid milk market in Venezuela and 40% of the powder milk market. I remember being in awe of the company as it came into Venezuela buying many milk producers, paying top dollar and gaining market share. I also remember their advertising of the “cheapest” liter of milk in the country, except the container had less than one litter (This is called Russian inflation). The company boasted when it began opening ice cream stores that each cost one million dollars and I wondered how they could make money selling such crummy ice cream in a country where there is fairly good ice cream (my favorite is called 4-D).  Clearly, it was part of the now crumbling Parmalat pyramid, where assets were invented in order to cover losses as the latter occurred and thus expansion with losses was possible as long as nobody discovered the rip-off.

The question now is what is the state of the local operations of Parmalat? There is a lot of confusion on the issue. The Head of local operations says that the company has sufficient cash flow and supplies to continue operating and that its operations in Venezuela were fairly independent of Italy. However, the Government says that it is ready to help the local company which has lost US$ 30 million in letters of credit for imports (mostly powdered milk). The Minister of Agriculture also has said that the Government may intervene the local Parmalat branches and participate financially in it, with a joint venture with the workers. Meanwhile, today’s El Nacional quotes members of a pro-Chavez union as saying that they will propose to the Government that the workers take over the company. The whole issue is further confused by the fact that one of the Parmalat executives reportedly involved with the fraud at the parent company was in charge of the Venezuelan subsidiary.

Obviously, this is all premature. It is clear in my mind that Parmalat was built on cheap capital (It is very cheap when you pay nothing for your capital!). If the company is self-sustaining in Venezuela, I would imagine Parmalat Italy would simply try to sell the unit or keep it until it comes out of bankruptcy if the operations are healthy. Reuters says the company was quite successful in Latin America, give me free capital and any business can be successful, so I am not sure what they are talking about.  Curiously no such noise was made when Enron went under. Enron had a unit in Venezuela called Vengas (previously Industrias Ventane) which distributed close to 50% of the bottled butane used mostly by poor people in Venezuela for cooking. Vengas remained healthy after Enron went into bankruptcy and is part of the new Enron which coincidentally may emerge from bankruptcy as soon as next week.

What is remarkable about the case is how rudimentary the fraud was. Reportedly, company executives had been creating assets for more than a decade in order to cover losses as they occurred. They did this by inventing the assets within shell companies in the Cayman Islands and apparently with the cooperation of their auditors. Truly incredible!

While I tend to agree with Tal Cual’s Editor Teodoro Petkoff on many economic issues, I disagree with most of the content of today’s editorial. Basically, Petkoff objects to the sale of the Ruhr refinery in which PDVSA owns 50% with Veba Oil. Petkoff argues that this is simply privatizing PDVSA, something that should not be done, even if the properties are abroad. I think that if PDVSA has something more profitable to invest in, there should be no problem in selling the refinery. What I object to, is that fact that the process being used to sell the refinery lacks transparency. It should be sold to whoever pays the most, not simply to the first group that comes around to offer something for it. Moreover, it does raise some suspicions when the second in command at the company is a former Executive of the company buying the refinery. I think PDVSA should become an international oil company, investing both in Venezuela and abroad, wherever good return on investment may be found. I also think that the Government should privatize 10-20% of it as a way of having the company respond to the shareholders and not the Government’s whims. But I do not believe any part of the company should be managed with nationalistic emotions.