The Devil's Excrement





  The Devil's Excrement
Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.
Last updated:
4/2/2007; 9:11:24 PM

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Tuesday, March 22, 2005




Many people tend to minimize Chavez’ ability to think and plan long term. Politically, Chavez has always stuck to his long term plans and continues to do so. Thus, one needs to analyze all of the following events in its proper context:


-PDVSA buys back its debt last summer in an operation that had no financial justification: It left the company with practically no debt and the price paid was too high. The only possible explanation was that it was being done to protect the company’s Board from prosecution, since it had been unable to file its financials (Is it impossible?) under US law.

-CITGO also repurchased its debt. The possibility of this being done to protect its Board was not feasible, as the company has filed and continues to file financials due to the partnerships it has.

-Chavez announces that the country will sell CITGO because the company makes little or no money. This despite the fact that the company is making record profits and according to one of its partners, Lyondell, receiving up to US$ 5 per barrel of oil above market price, under the terms of its contract.

-Chavez threatens to not export more oil to the US. This could only happen if CITGO is sold, as the Venezuelan oil company PDVSA, has long terms agreements with CITGO.

None of the above events makes sense, unless the plan is to have the country eventually default on its foreign debt, the moment oil prices drop. The excuse? Easy: The revolution needs the funds. With no debt in the US, no property in the US and no exports to the US, the effect on Venezuela will be minimal.

If not, look at Argentina. It not only defaulted, but restructured its debt under terms extremely negative for debt holders who had no recourse but accept. If Argentina can do it, why can’t revolutionary Venezuela do it too?

Investor beware.

10:10:48 PM    comment []




For the last two weeks, I have been wondering about two statements made by Venezuelan Government officials:

-Attorney General Rodriguez on the amount of C4 found at the beach apartment of Antonio Lopez' parents, three months after his death: There was enough C4 to blow up all of Venezuela.

Interesting. Who has enough C4 to blow up all of Venezuela? The Military? Has it been investigated? Isn't C4 made in such a way that there are different traces of elements to allow the identification of its origin? Where did it come from? Which military fort? Which lot? Who was in charge of it? Hello Isaias! Are you looking into this?

- Miranda Governor Diosdado Cabello on the cost of an alterante transporation system that would help the half a million people that commute daily from the Altos Mirandinos: "It's too expensive, it would cost US$ 500 million"

Too expensive? Isn't that the same amount that will be invested in Argentina's bonds? But of course, if the Venezuelan Government buys US$ 500 million in Argentina's bonds, the Argentinains will never see the money, it will go to the seller, most likely a US or European fund. These are not NEW bonds, this is secondary market of existing bonds. Thus, the Chavez administration is helping the specualtors, while US$ 500 million is too much money to solve an important problem of 2% of the Venezuelan population. Go figure!

9:54:51 PM    comment []



The nice thing about traveling is you can relax and think. While I did not have the privilege of having a room which cost 2,670 euros a night (The Raphael), like the President of the people did in Paris, the trip was fun and relaxed. Perhaps being away allowed me to step back a bit from what is going on in Venezuela, but as I read the news once in a while, I could not help the feeling I get that, despite what is going on here, people are simply too complacent. While I was away the new penal code was approved, land was illegally taken away from their owners and the Minister of Defense justified the death of two people in the name of better military discipline. And nothing happens, nobody reacts.

Yes, the new penal code is in effect. In its article 147 it says:

“Anyone who offends with his words or in writing or in any other way disrespects the President of the Republic or whomever is fulfilling his duties will be punished with prison of 6 to 30 months if the offense is serious and half of that if it is light. The term will be increased by a third if the offense is made publicly.”

From a legal point of view, this article is so screwed up, that those that wrote it should simply proclaim their stupidity. By the way, by calling them stupid, I am violating another article.

First of all, what is an offense? Does it need to be false to be offensive? If I say Chavez is ignorant on economic matters, am I offending him? If I say he is a murderer too, am I being offensive? If I say he allows rampant corruption around him, is that offensive? Or what about if I say that he is a proven liar? I am sure he would be offended by being called a liar, but it is true. From his “poor” background, to why he went to the military academy, or why he could not go to college, to his campaign promises, lies, lies, lies…

Then comes serious and light (“grave” and “leve” in the Spanish original). Who decides one or the other? A judge? Is calling Chavez a murderer in the 1992 “light” or “serious”. Or accusing him of premeditated murder on April 11th. 2002, “light” or grave”. I simply don’t know.

And then comes the public versus private debate. It says that the term will be increased by one third if the offense is made publicly. What that does exactly mean? If I tell my wife Chavez may be gay in the sanctity of my home, could I be offending him? If I say in my blog that Chavez has allowed his family to get rich, is that private or public?

Whoever wrote and approved this, should be ashamed of what a bad job was done. The problem is that Article 222 of the same Penal Code says:

“Anyone who by his words or acts offends in any way the honor, reputation or decorum of a member of the National Assembly or any other civil servant, will be punished in the following way, if the action is made in his presence and is motivated by his responsibilities…”

Clearly, Article 147 was written by the National Assembly. Thus, I may be getting into trouble if I call them dumb and dumber for writing Art. 147, but this article may be just as bad. Who is a civil servant in Venezuela? Can I say the Assembly’s doorman is stupid? Or the guy that denied me a new passport is corrupt? Or the Vice-President a cynic? Or the Minister of Information a liar? Or unethical (both of them)? I just don’t know.

Then there is wonderful Art. 442 of the new Penal Code that says:

“Anyone who communicating with various people, together or separate, would have charged any individual with a responsibility which may expose him to public scorn or hate, or an offense to his honor or reputation, will be punished with prison of one to three years…if the crime were committed in a public document or writings (blogs?), drawings or exposed to the public, the penalty will be from two to four years…”

You have to love this one. You only need to accuse someone of something that may cause public scorn, let’s say corruption, but the article says nothing about whether it is true or not. Whether you have to prove it or not. Just that if you expose someone to public scorn, bingo! Go to jail, do not collect 200, who cares if its is true or not.

All of this takes me back to the beginning. We are being overrun by this outlaw Government and people are just sitting there, letting the Government abuse them, take advantage of them and intimidate them. The Venezuelan press is saying little, being extremely careful of not violating the media law or the new penal code. The truth is not getting out. We are losing my friends. That is the stark reality. Reporters are fired for fear of losing Government advertising. Events are not reported by the press for fear of violating one of the innumerate new articles of these two new bills.

Which comes to the point of this article. I am no hero. I don’t pretend or want to be one. But I will simply not back down. I will continue to call murderers, murderers. Idiots, idiots. Thieves, thieves. Thugs, thugs. This is my country and my life we are talking about, not some abstract concept of freedom and democracy. This is my freedom, this is the democracy I have lived in and fought for most of my life. All Venezuelans that are against this autocratic regime should fight everyday in everyway they can. We can not be intimidated by militaristic and Stalinist practices of this Government.

If allow them to push us back, we lose. I will not step back. As simple as that.



8:51:13 PM    comment []




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