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:
3/1/2009; 10:58:27 PM

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Saturday, February 14, 2009

Venezuelans are spending a non-alcoholic Valentine’s day (as required by the electoral law) prior to tomorrows wholly illegal referendum to amend the Venezuelan Constitution, so that Chavez can run for President again in 2012. (And again and again!)

Illegal for too many reasons. From the fact that this was already voted on (Is he a democrat when he does not abide by the voter’s desires?), that a referendum can not take place until after two years after the last one (which was on Dec. 2nd. 2007), or because the question is worded in such a fashion that it deceives voters and finally, because the whole State and its money has been manipulated to promote Chavez’ SI vote.

But Chavez’ revolution is showing increasing signs that it has by now lost all of its scruples, as it lies, intimidates and even twist facts to fit Chavez’ views and needs.

The Government has carried out an overwhelming campaign on all fronts, outspending the opposition by a factor of 7 to 8 (even on the Internet!), using all of the Government’s resources and yes, intimidating and lying to the people about the meaning of the outcome tomorrow.

To me, the most significant impact of this vote may be that for the last two months, the Venezuelan Government has ignored the crisis that is about to hit us in the face, devoting itself completely to the promotion of the Si vote to perpetuate Chavez in power. Because not only have no decisions been made, but the last two months have been spent insuring that the voters don’t feel any sign of the crisis.

But in the end tomorrow’s outcome may not be that relevant anyway. If oil prices continue at current levels and Chavez continues managing the economy with amateurs, his popularity may drop to such low levels that 2012 may seem far away even to the autocrat himself when things get really bad and much higher inflation and shortages hit the people. And  no matter which side wins, Chavez’ international reputation, or what was left of it, has been further damaged by his obsessive abuse of power and his undemocratic ways. Today’s New York Times Editorial is a clear sign that Chavez can no longer fool people into thinking he is a democrat or is even trying to do the best for the people. How times change! And how Daniel says, I certainly feel bloggers have contributed to changing international minds and beating Chavez’ huge resources on international lobbying just with our time and dedication.

And we are now here, ready to vote and sober, and I am sure you all want me to say what I think may happen.

Polls have been rather confusing in the last two months. As Chavez proposed the referendum, all major and reliable pollsters indicated the NO was way ahead. However, withing four weeks and without anything major happening, the SI had recovered significantly, closing the gap in most polls. This has been due mostly the the intense pro-SI campaign by the Government and its focus on the undecided, painting the race between Chavez and a faceless opposition that is about to take everything away from them.

At that point, after the gap narrowed, pollsters that have been rather consistent in prior elections, began to diverge. As of today, of what I consider to be the reliable pollsters, there are differences of as much as 12 percentage points in their final predictions.

Pollsters themselves indicate that there are some strange things in the data. All of them register levels of commitment by the voters that have never been seen in any Venezuelan election and least of all on a referendum, which typically turn off the voters on both sides. Running at 15% on average, abstention may be the key into understanding the final result.

Because in the end, it was Chavista abstention that gave the opposition its victory in the 2007 Constitutional referendum, as three million voters that had cast their ballot for the President in 2006, decided to stay home. The intense campaign of the last two months and the organization of tomorrow’s vote is all focused in guaranteeing that this may not happen again.

Opposition optimists want to interpret the differences in the polls on fear, but pollsters think that this fear may be reflected in who is going to vote rather than how they will vote.

And the Government has loaded the dice to insure abstention is as low as possible. Despite the fact that the law says that voting should end at 4 PM if nobody is in line, the CNE unilaterally decided to bypass it, changing it to 6 PM. This guarantees that if exit polls indicate the pro-Si vote is on the low side of things, the Chavista machinery can go and get the voters at their homes and bring them in.

Up to about ten days ago, I was thinking that the No would win, believing that the violence and intimidation would work against Chavez in the last few days. But after seeing the internal numbers of some of the polls, I have changed my mind. In 2007, Chavez approval rating was down, it is up between 8 to 10 points from that level among voters, even if they say they will vote No tomorrow. That number, combined with the resources of the Government and my belief that there is no major  “hidden” or “fear” vote lead me to conclude that the Si is going to win. Only huge abstention levels or Chavismo blowing the drive to get voters out (like it blew the Si march on Thursday) could turn the tide against Chavez.

Sorry to rain on your parade, that’s the way I see it, even if my “feelings” tell me otherwise.

I will, of course, be reporting during the day, will make my usual spin through the city as soon as I finish voting. I will visit the same centers I did in 2006, 2007 and 2008 which will give us some sense of abstention levels to see if I blew my prediction (Hope I did!). I do hope that lines will be smaller than in the regional elections when it took me all day to take my mother to vote and return for my own. I will update both blogs, but the new version (wordpress) appears much faster than the old version (Radio Userland or Salon.com).

But in the end, this all may be a waste of time even for Chavez. If running the country absorbed his time and effort like elections and referenda do, maybe he will actually have some more accomplishments to show in the last ten years and would not even have to waste so much money and effort on promoting his indefinite reelection.


11:55:32 PM    comment []

We have seen weeks of abuse of power as Chavez and his Government have overwhelmed the media and the country with advertising in favor of the SI vote on Sunday’s referendum. This is not new, we have seen it before but never of the magnitude of the last six weeks.

But what is particularly bothersome (and irksome) is how intolerance against the actions of the opposition have become outright discrimination and the slightest excuse is used to create obstacles in not only and unfair way, but clearly undemocratic and in violation of people’s rights:

  • This week, the municipal Government of the Libertador District denied the opposition students permits for two marches in favor of the No vote on the referendum. Marches that favor the Government’s side are never banned or their path corrected, only the opposition’s. But what is worse is the conflict of interest whereby the mayor of the Liberatodor Municipality happens to be Chavez’ Head of campaign in favor of the SI vote Jorge Rodriguez. Rodrigues was Head of the Electoral Board before becoming Vice-Presdient of the country in that nothing-is-a-conflict-of-interest attitude that Chavismo has. Rodriguez was elected Mayor in Novemeber but ahs devoted all of his time since then to his current resposibility of making the SI win tomorrow.
  • A concert by singer Soledad Bravo, “A chant for love” which was supposed to take place today (Valentine’s Day) at Central University was canceled at the request of the union of that University which argued that given that it was an “opposition” concert, this created the possibility that there could be riots (for love?). Of course, if the union says no, that’s it as the workers will not show up.
  • And then of course, Spanish Deputy Luis Herrero was kidnapped and put on an airplane for saying that whiel he was not promoting a Yes or No vote, people were being threatened and you can only vote in freedom. He then said, and this irked the Government: ” Never vote led by the fear that in a premeditated way a dictator is trying to translate into the spirit of the people”. Of course, when Evo Morales, Daniel Ortega and Rafael Correa come and support Chavzea nd particiapte in an election rally, it is fine, but when a Deputy that can see clearly that Venezuela is no longer a democracy speaks, he is “insulting the dignity of the country”. The President of the EuropeanHans-Gert Pottering Parliament called the expulsion “unacceptable” and a disdain towards democratic institutions.
  • And then of course, the members of the Electoral Board (CNE) continue acting as Government agents in overt fashion, it was actually the Head of the CNE that ordered the deportation of the Spanish Deputy and another member of the CNE “challenged” the opposition to give an opinion about what the Deputy said. As if the opposition did not recognize Chavez’ dictatorial tendencies. Of course, Chavez came out and citicized the Deputy insulting him in his customary fashion.
  • And then, of course, Lech Walesa never came to Venezuela despite denials by the Government that it was not stopping him from coming, but it is now twice that the Polish leader has been unable to come due to the intimiadtion of the Veneuzelan Government.

10:46:22 PM    comment []

It’s over. Regulatory bodies have caught on. WSJ just announced that the FBI is investigating. “Duck Tales” is in the hands of dozens of analysts who “get it”, including many with ties to the MSMs (that’s Mainstream Media for you, Toby LOL). The press is flowing more freely. The MSMs have sent guys to Antigua. It’s big. They “get” it. THE EMPEROR HAS NO CLOTHES. Stanford has no answer. “Sir Allen” has been silent since over three days ago, as that spokesman who was beginning to look a lot like Jim Carrey at the beginning of “Fun with Dick and Jane”.

Hope he gets even like Carrey did.

The Antiguan regulators are on it. They made a complete “about face” on Friday, going from “not probing Stanford” to “to quiz Stanford” and “its not a Friday afternoon cocktail anymore”. It’s obvious that someone told them to “wake up and smell the guavaberry”.

They are still in denial, however. A Mr. King says “I know Allen Stanford personally put close to half a billion dollars of his own money to beef up the capital structure of the bank.” Did you see the check, Mr. King?

NO ONE and I mean NO ONE has disputed the facts in my article. The central issue of Show me the money! has not been addressed by Stanford or anyone else. Some MSMs have asked me how I got to my figures and I’ve sent them my dinky little spreadsheet. No questions. Maybe I should pretty it up a bit.

Now comes the ugly part. The Antiguan regulators with perhaps some special “help” are going to go see about those assets. I hope for the best, but I’m afraid for the worst. There may not be much there. If there’s a broker statement showing $2-3 billion in T-bills somewhere, you can be sure it’s false. Better confirm that with the brokerage company, guys. My best guess is that those assets are going to be stuff like eLandia, which Stanford poured like $100 million into, only to lose it. HSSO, which was trying to become “something” by buying EMAG, Transwitch (TXCC), which some guy named “Peabody” on the BW blog turned up. Seems that Stanford, grasping for cash, sold $15 million of short-term notes back to the company for $9.5 million back in December. Talk about “liquidity crunch” (it works to about a very high yield, for those mathematically challenged). I guess then there are the movies, the restaurant in Memphis and other “market-beating” investments. I can imagine the ledger now…one coffee pot: $50,000.00, one helicopter: $500,000,000…one corrupt politician: priceless! The human part is going to hit home really quick. I already had a taste, and my blood is boiling. I’m MAD and I’m SAD. Yesterday, I get a call on my home phone from a lady in Venezuela. She was desperate. She tells me her 99-year-old aunt’s money, the income from which she uses for her medical needs, is in a Stanford CD. “Can you help me, Mr. Dalmady?” What do you say? “Should I redeem, Mr. Dalmady” Yes, “redeem” I said…broke my heart.

It’s becoming painfully obvious that this was in a death spiral anyway and the story was going to blow really soon. Matt Goldstein had plenty of research he was ready to go forward with, as was Allison Fitzgerald at Bloomberg. They were googling for Stanford regularly when my stuff came up. More stuff will come forward anyway. I’d say if not for “Duck Tales” this had maybe a week or two more to go, before it blew itself up (ran out of money) or the press blew it up.

That’s really bad if you think about it. Ponzi schemes live off liquidity. If these guys are strapped for cash, after pulling in $2 billion in fresh money in 2008 and “injecting fresh capital” in December…well. It’s obvious that this isn’t just a product of the 2008 market crash, stuff has been going on for a while. If I had to guess, I’d say this might have been legit until 2000 or at least a “viable model”, since the markets were doing well, but somewhere back it took a bad turn and a little hole grew into a crater. They were filling it in and perhaps trying to build up a business on the side (Stanford Group?). But its just speculation here and we won’t know unless an insider talks.

So…there it is. It’s my 15 minutes. Thanks for lending me your blogs (I really should get my own).

*A simultaneous blogcast exclusive of the Devil and Inca Kola News


12:30:58 PM    comment []



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