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.
---Minister
of Finance Ali Rodriguez announced today that the Government would reduce the
dollar quota for Venezuelan travelers, indicating the Government has given up
on the middle class voting for Chávez. It would have been more clever
politically to not give airlines CADIVI dollars, reducing dramatically the
people that can travel abroad and thus instantly reducing the money given out
for this purpose. Nobody asked.
---And
speaking of CADIVI outflows, in November the Central Bank gave out US$ 133
million per day, a 32% drop compared to October. BTW, there is no data for the
last three weeks!!!
---And the
National Assembly approved Bs. 9 million or US$ 1.8 million (US$ 4.18
million at the official rate to value Banco de Venezuela, the Banco Santander
affiliate Chavez wants to nationalize. Funny, I have yet to find a single
person that knows the company hired to do the job Theorema Asesores 055. Nice
work if you can get it.
---And the
Venezuelan Oil Basket was up this week to close at US$ 32.14. Funny, WTI was
lower than last week, but our basket is higher!
---And El
Nacional says Manuel Rosales had a budget of US$ 358 million for the Maracaibo subway,
when the Central government took the project away from him and executed for US$
960 million, including Siemens' commissions. Deputy Mario Isea tried to accuse Rosales of pocketing these
commissions, but clearly he has no clue about the complaint by the SEC, which
does not cite a mayor, nor the fact that Mayor Rosales had the project taken
away from him by the Central Government. The complaint is clear, it says the
commissions were paid to:
-A high ranking member of
the Central Government
-A former Venezuelan
Minister of Defense and diplomat.
-Two prominent Venezuelan
Attorneys
-A relative of a
politician
---And
Fitch Ratings downgraded Venezuela's and PDVSA's debt to BB+ from BB-
citing concerns that the Government will make no adjustments until after the
reelection referendum. PDVSA's bonds now trade at a yield of 17-20%, compared
to the 7% yield they had when they were sold to the public in April 2007.
