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Friday, August 29, 2008 |
The Empire of Mediocrity by Elcides Rojas in
El UniversalFor XXIst. Century Socialism, the worse things are, the
better. And it has only been ten years… It is no only Latin America that will change its name,
according to one of the celestial inspiration of the leader of the
intercontinental revolution. It is, no more nor less, the same trick applied
during the last ten years in that titanic fight that occupies so much time of
the justice seeking military and neoliberal socialists. For the revolution, as it is well known, it is much easier
to rebaptize than to build from scratch. The endless rant, the sack of insults,
the show, the pose, the colics and the eternal wars against the empire
certainly do not allow the invincible team to settle down and start up the
mission, promised so many times, of converting Venezuelan into a world
superpower. It is very difficult for a leader of this pleasure seeking
communism to carry out the tidying up of Argentina’s finances, the reduction of
poverty in Haiti, the total literacy of Bolivia, the reduction of infant mortality
in Ecuador, the construction of thousands of housing units in Paraguay, the
improvement of the quality of life in Nicaragua, providing access to cheap fuel
to the poor in the US, and all of that without stopping that God giving task of
attacking with the success which with they do it, the mountain of problems that
drown local socialists. Parque del Este is now Francisco De Miranda, Ince is now
called Inces, the old ministries of Gomez and Perez Jimenez are now the Popular
Power for whatever. The barrios squashed by garbage are now communal councils. The
small buses and vans are popular transportation units, companies are socialist
production units, and the outpatient units are called Barrio Adentro. The
corrupt are national heroes defamed by the right wing. The old bodegas or local
stores are Pdval or Mercal. The devalued Bolivar, isolated from the world, is
called the strong Bolivar. The military are the soldiers of communism or death.
The high schools built by Betancourt or Leoni are now Bolivarian. The companies
created by Carlos Andres Perez are now socialist enterprises. The buy and sell deals
done by the Government are called nationalizations. The sportsmen went from athletes
in high-level competitions to being moving billboards of revolutionary improvisation. In Barinas,
nobody likes Bolivars or dollars they die for the oriental Turimiquires or the
Yaracuy Lionzas. The haciendas are now socialist endogenous developments and
they don’t produce mosquitoes, even if they are full of Cuban technicians. The
vans are now large vans, reporters are traitors to the motherland, and
opposition members are lackeys of the Empire. The banks, just imagine, are socialist
banks. The Colombian guerrillas went from allies to old-fashioned terrorists.
The poor are poorer, but organized in cells and communes for the poor. And, of course, socialist mediocrity is treated as excellence.
The more the failures, the better the awards.
10:03:32 PM 
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Thursday, August 28, 2008 |
We will follow the events in Miami where the trial of Antonini’s
associates is starting (This will be the first of a series)As part of the trial in Miami, the Prosecutor has introduced
this document, detailing the
corruption history of Carlos Kauffmann and Franklin Duran, as part of the
evidence to be introduced against Duran. Since Kauffmann has been granted
immunity, it is clear that the information comes from him. The document details how Duran and Kaufmann joined up in
1998 and began conducting business with the Government as a partnership. The
document mentions the Klin Fund in which Duran and Kauffmann each had a 50%
share and which included a 12 year CD at the American Express Bank for US$ 40
million. Additionally, they purchased Industrias Venoco from its
founders, paying cash for it (US$ 60 million?) and began working tightly with
the post-strike PDVSA. Curiously, Pedro Carmona, “Carmona the Brief “was the person
which was self appointed President briefly in 2002, when Chavez left office for
three days under what is now called “the coup” and he worked at Industrias
Venoco his whole life. He left the company to become President of Fedecamaras,
the association of Chambers of Commerce in Venezuela. These are the specific accusations contained in the
document, which involve million dollar corruption schemes in Venezuela with
Government officials and the private sector: 1.- National Guard officials received kickbacks and
channeled the funds with Kaufmann and Duran. Kauffmann and Duran charge a 10%
fee apparently for fronting for these officials. 2. -Duran and Kauffmann paid kickbacks to these same
officials on contracts for supplies sold by them to the National Guard. 3. - Duran and Kauffmann paid kickbacks to officials in the
National Guard in relation to bonds issued by the Ministry of Finance to the
National Guard to pay old salary and benefit debts with them. 4. -Duran and Kauffmann paid Cojedes Government officials
for placing deposits of funds belonging to that State at particular private
commercial banks.(A racket I described long
ago here) They received a 10% yearly fee for this, of which 30% was kicked
back to Cojedes State Government officials. Duran and Kauffmann managed the
kickbacks for these high Government officials. My comment: Recall that the Governor of Cojedes is Jhony
Yanes Rangel, who when the case blew up, defended Antonini
bringing in the suitcase into Argentina. Yanes said at the time that this
was just terror by the US Government. Recall also that at the time, a local
reporter showed that Kauffmann
had paid for Yanes Rangel staying at the luxurious Llao Llao Hotel in
Bariloche , Argentina. Yanes Rangel also showed up at a protest in front of the
US Embassy, to defend his “friends”, who he said were entrepreneurs. Some of
these friends are now providing evidence to the US Government. 5. -Duran and Kauffmann also gave Cojedes Government
officials kickbacks on construction projects awarded to them by the Cojedes
Government. 6. -Duran and Kauffmann were involved in a kickback scheme
with high-level Vargas State Government officials. They gave US$ 250,000 to
this high level official and also “helped him” with his State’s deposits. In
fact, the State placed its budget at a single private commercial bank, for
which they received a finder’s fee. A percentage of that fee was kicked back to
these same Vargas officials. My comment: No names are mentioned, but the Governor of
Vargas State for the period mentioned was Antonio Rodriguez, from Chavez’ MVR
party. It is extremely unlikely that all of the budget of the State would be
placed in a single bank without his knowledge. Recall Vargas was the State that
was destroyed in late 2000 by floods and has yet to recover despite Chavez’
promises. 7. -Also in Vargas State, Duran and Kauffmann provided
medical insurance coverage for the states employees. According to the document
“ millions of dollars were routed to an insurance company”. Duran and Kauffmann
received a 20% fee on the premiums as a finder’s fee and they in turn paid half
a percent to high Government officials. 8. -Duran and Kauffmann received US$ 30 million from Vargas State
and kickback ten percent to “two” high level Government officials. 9. -Duran and Kauffmann purchase a building in Caracas. The
Venezuelan Ministry of Finance paid them US$ 9.5 million for it. Duran and
Kauffmann paid four high level Ministry of Finance officials US$ 4.5 million in
kickbacks. My comment: This is the infamous Citibank building case (you
can read about it here
or here),
whereby Duran and Kauffmann bought it one week and turned around and sold it to
the Ministry of Finance a couple of weeks later. I should clarify that former
Minister of Finance, under Hugo Chavez, Tobias Nobrega was indicted for this.
However he has not been jailed or tried. (And as far as I know not been banned
from running for office by the Comptroller.) 10. -Duran and Kauffmann colluded with the Ministry of
Finance to restructure debt and gained in excess of US$ 100 million in the
process and paid US$ 23.8 million in kickbacks. My comment: Well, Andy
Webb reported on these funny details of the Venezuelan debt buyback in
2003, from which those that had advanced knowledge made a lot of money. I
also reported this in detail, noting that not only did they know about it,
but also a Venezuelan Government Bank, Bandes, sold these debt instruments to
those in the know ahead of the buyback. Thus, there was twice the corruption in
this case. 11. -Duran and Kauffmann were involved with a kickback
scheme at the Ministry of Education and arranged for part of the budget of that
Ministry to be kept at a certain bank. They received a 5-6% fee for this of
which 50% was kicked back to the officials. They did the same thing with the
FDIC Venezuelan equivalent, FOGADE. My comment: Well, the Minister of Education for the larger
part of this period was none other than Aristobulo Isturiz, Chavez’ candidate
to become Mayor of the Metropolitan are of Caracas. Did he know about it? I
don’t now, but I doubt he didn’t. What this clearly shows is that corruption
reaches all the way to the top, as Chavez has to know about this. BTW the Head of Fogade was
found guilty of corruption by the National Assembly, he was never jailed or
charged. 12. and 13. Vague unspecified charges of kickbacks in PDVSA
and the Judiciary. The important point here is that thanks to the fortuitous
search of a suitcase arriving in an official PDVSA plane in Argentina, a
suitcase full of cash was discovered. Through this case, a whole pot of
corruption in the hundreds of millions of dollars has been uncovered, involving
just two guys. How many more suitcases have flown around the world? How
many Durans and Kauffamns are there, that we just simply do not know about? How many billions have been stolen under the very eyes of
Hugo Chavez and his “robolutionaries”. Can all this be happening without the
Supreme Being knowing about it? I can proudly say, that you have read about a lot of this
before in these pages. I was already talking about some of this more than two two
or three years ago. Petkoff in Tal Cual also began talking about it. The rest
of the media, even today, appears to avoid the subject out of fear. Free press?
Sure. We now know even more details, confirming that the Chavez
administration has become the biggest cesspool of corruption not only in
Venezuela’s history, but maybe probably in the planet’s history.
11:00:10 PM
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 Had to post this one: Ten years taking the gold....
the black one...
8:35:15 PM
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Wednesday, August 27, 2008 |
Surprise, surprise, Kauffman and buddies have revealed
to US Prosecutors that they funneled payoffs and kickbacks to
Venezuelan officials in all sorts of deals. From payoffs to PDVSA to
commissions on Argentinean bonds and structured notes, all the way to
paying commissions Kauffman has detailed what you read in this blog
long time ago. Kauffman was a well known intermediary both for
banking deposits and securities sold to friendly banks which paid
commissions, he obviously was paying off Government officials but this
is the first testimony by anyone involved confirming what we all knew
had to be happening. After all, how could Kauffman and Duran get so
rich, so fast to be able to buy Venoco in cash or have a $40 million
dollar, twelve year CD at the American Express Bank? Because
Kauffman and three other were well known for their shenanigans in the
Venezuelan financial world in what is one of the biggest corruption
rackets ever. I first wrote about structured notes in November 2005, about Argentinean bonds later that month, when Petkoff in Tal Cual detailed the same corruption racket I had written about. The
last paragraph of the Bloomberg note also describes how Kauffman and
buddies also participated in the corruption racket with the banking
system which I wrote about here,
but PSF’s even dare suggest that is how banking systems operate
everywhere. Of course, they did not take the trouble to even begin to
understand what I was writing about. Well, soon we will know
even more details, as the trial in Miami begins and some of the biggest
financial corruption scandals in the history of the planet are revealed
in exquisite detail, while Chavez and his Minister claim its is the
Empire making it all up. But we all know it’s true, everyone in
Caracas knows the names and the multi million dollar corruption rackets. The international press has reported it, now
it will be told under sworn testimony by people who can’t possible
justify the wealth they have, revealing how naked the autocrat is and
how corruption is everywhere. That is why it is called the robolution.
8:04:19 PM
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Tuesday, August 26, 2008 |
Act One: Tal
Cual reports on August 19th. that the Government will submit a
new Telecommunications Law to the National Assembly. The draft cited by Tal Cual gives Hugo Chavez the power to
suspend all “telecommunications transmissions”, whenever the stability of the
Nation is at risk. This is contained in Article 11, of the “Final Dispositions”
of the draft.Act Two: Deputy Manuel Villalba of Chavez’ PSUV party and to
top it all off, President of the Media committee of the Venezuelan National
Assembly, appears in
Globovision and denies not only the content, but even the existence of such
a draft. Using the Chavista
language that we have grown accustomed to he says that those that promote such
news items like El Universal, El Nacional and Tal Cual “are trying to destabilize
the country, playing with fear and are disrespecting the intelligence of the
Venezuelan people” But then there is the last and conclusive act: Act Three: Minister of Telecommunications Socorro Hernandez
on the TV channel used to promote only Chavez paid by the taxpayers VTV, comes on and says that
the Bill does indeed exist and it will be submitted to the National assembly,
but “the versions that have circulated around (in the press) are drafts, but
are not the definitive version…” Thus, Minister Hernandez is admitting that the drafts of the
Bill have contained articles allowing the President to cut off all information
to the Venezuelan population whenever he feels like it, i.e. allowing total
censorship. And here comes the hilarious part, the Minister says: “ the
law will be submitted to public consultation and I don’t think there are reasons for people to be anxious” I guess the poor Minister must have been on vacation or at
the Olympics and missed the 26 Bills approved by her almighty boss, without consultation
and allowing unconstitutional actions as well as laws that contain articles rejected by the Venezuelan people in a
democratic referendum in December 2007. But it is sufficient to see how the matter has been handled
with the 26 Bills, the secrecy with which it has been handled, the President of
the relevant committee of the National Assembly did not know about it, to be
not anxious, but extremely anxious about the future of Venezuela’s
telecommunications as well as its democracy democracy. Because when Governments lie, hide information and use all
forms of deceit it is because they are trying something that you know is either
illegal or violates international treaties. In the case of the Chavez Government
we have seen this over and over again. These people should realize that one day, they will have to
pay for their crimes. Or steal a lot of money to live in exile. And that my friends, will be Act Four.
10:09:41 PM
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Wow! It
was only last Friday that Minister of Finance Ali Rodriguez said, with that
voice of his which is moderate and low, far from being strident or radical:
“The government doesn't have any plans to nationalize more companies”.
If you believed it, you
probably just forgot that this is a revolution with random thoughts and no
coordination.
Because it only took like
24 hours before the Venezuelan National Assembly showed that one hand of the
Government has no clue as to what the other is doing, when they announced the
passing of a Bill in the next few days to nationalize the distribution of
gasoline in the country. The Bill calls for the nationalization of the
wholesale distribution and transportation of gasoline and the transfer of all
gas stations under concession to communal councils. Thus, it seems as if both
wholesale and retail will be nationalized.
The law establishes a
period of sixty days for those affected to negotiate with the Government. You
know what that means, you have sixty days to accept what the Government offers
you or else. Because most of those 60 day terms have been used by the
Venezuelan Government to confiscate private property from its position of
strength. You can fight, but in the absence of an independent legal system, you
have little recourse but to accept the offer and leave.
And it will be interesting
to see what use these untested communal councils give to both the gas stations
and the proceeds from its sale. If it is anything like the confiscation of rice
last week from a private supermarket, then we know that a new and imaginative
source of corruption for the robolution has just been invented.
What else is new?
Or maybe the right
question is: Who will be next?
6:27:53 PM
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Monday, August 25, 2008 |
Rayma strike a chord with me in this cartoon. The guy on top says: "They are saying that they are stealing the country from us". Then you can see his reaction or non-action in the bottom. This cartoon shows my feeling given the indifference of people to most of the Government's actions
2:06:25 PM
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Sunday, August 24, 2008 |
Venezuelan has been filled with billboards like the ones
above for weeks saying “Gold for the sporting revolution", trying to associate
the medals with politics, certainly a no-no in sporting circles. Cynics say
that I am wrong; someone just found a way to make money out of the Olympics,
the person or persons that sold the billboards to the robolution. Clearly, someone convinced the autocrat that there would be
a few medals, more than the country had ever obtained in its Olympic history. But it
was not to be, as Venezuela obtained a single bronze medal in Taekwondo, one
medal less than in Athens, despite twice as many athletes. Sports authorities had convinced Chavez that Venezuela would
obtain at least five medals and he made quite a show of it, meeting with the
Olympic athletes twice before their departure and talking about it in his
Sunday variety show Alo Presidente. Today, Chavez is calling those that claim Venezuela failed in Beijing,
pro-Yankees and is suggesting the athletes had a brilliant Olympic Games. Meanwhile, the President of the
Venezuelan Olympic Committee is saying that Venezuela did not meet its goals
because refereeing went against the country. The only success, besides the medal,
according to this person was that we sent 109 athletes to the games, more than
twice the number Venezuela had ever sent to the Games.This is a silly way to look at it as the IOC has been trying to relax requirements so that more countries participate and Venezuela had 39 delegates in team sports like volleyball and softball.
The truth is that Venezuela should have done better if only
because in exchange for oil, Cuba has been sending trainers to this country for
eight years. Given the success of the Cuban in international sports, this
should have had some minimal impact, which should have been visible in Beijing. I suspect that the bureaucratic nature of Venezuelan sports
is what hinders its development. In fact, one of the delegates to the Olympics told Chavez today that
sports had too many managers. This is nothing new, it was happening before
Chavez came to power. What is new, is that Chavez’ profound dislike for the
public universities, has distanced the sporting structure of the country from
its most natural place to harvest good athletes. Not only that, but these same
universities have been strapped for money ever since Chavez came to power. Perhaps sports officials in Venezuela should look critically
at where Venezuela excels and ask why. They may not like the answer, but it is
the truth: Success these days comes wherever the private sector lends a strong
hand, but I am sure Chavez will not like that answer. Venezuela’s success in
baseball, soccer, tennis and Taekwondo all originates in the private sector. Taekwondo is a very interesting case; the country has won
two medals in the last two Olympics and two in the Barcelona Olympics when it
was an exhibition sport. Taekwondo began as a martial arts practice, taught at
private academies around the country and when the sport became Olympic one,
Venezuelan women had world quality status in it (I have yet to find an
explanation why it was the woman who took to the sport) As simple as that. The mystery is why the revolution ahs not been successful at
sports. They have plowed some extra money and lots of new trainers to it. Why
hasn’t it worked? You may argue inefficiency, mismanagement and the like, but
there should have been an improvement even if only qualitative. But it is not
there. In the end it may be like Chavez’ housing program, where despite the announcements,
money and projects, the Chavez Government has been unable to coordinate
building more housing. In fact, you would think that the whole patriotic, socialist
speech should have generated more enthusiasm for sports. But maybe the money is
just being spent in the wrong places. A revolution that does not want anyone to
excel may be the wrong drive for Olympic success. So, we get more revolutionary propaganda, than revolutionary
gold. That seems to be the hallmark of the revolution.
7:56:56 PM
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Saturday, August 23, 2008 |
The plot above shows how dismal is the ability of the Chavez Government to predict what inflation will be by the end of the year. In January, Minister of Planning El Trudi predicted that inflation would be 12% for the year, a value he reiterated in February, after the high number for the "new" CPI in January. By June, the 12% was a joke, since inflation had already topped it and Minister El Trudi came out with a new, and surprisingly precise, number of 19.5%. Well, with inflation at 17%, Minister of Finance Ali Rodriguez came up with a new number yesterday, saying that inflation for the year will be 27%.
Well, doing a fit with all three numbers and extrapolating to December, it looks like inflation will be 35% for the year, unless the "upturn" is real and it will accelerate and top 40%. In neither case is the end result very good for anyone, what is clear is that the Government has no clue as to what to do about inflation. Cooling the economy off and lowering the swap rate in the first half did nothing to slow down inflation. The Government has given up on the first strategy because of the upcoming elections and the second one is running into technical problems. This reminds me of the period during the Caldera administration, end of 1995, when with exchange controls in place, inflation accelerated and nothing the Government would do would slow it down. When inflation topped 120%, Caldera gave up and removed controls.
As with crime, Chavez simply ignores this problem never mentioning it. The latest strategy with crime seems to be that it has been blown out of proportion. Will they try to do the same with inflation?
9:26:29 PM
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Wednesday, August 20, 2008 |
The other day, I presented a back of the
envelope calculation showing at what price of oil does the country start
having problems in its balance of payments. I am still reviewing those numbers,
my main small mistake was only that imports are higher than I assumed. Today, I paid attention to
this Central Bank press release on the same subject. The first thing it
says is that the balance of payments was positive to the tune of US$ 2.93
billion in the second quarter of 2008. That sounds ok at first sight. However, the report says that oil exports in the quarter, in
which the average price of the Venezuelan oil basket was US$ 109.9, was US$ 28
billion. Of course, such a number only makes sense if Venezuela exported 2.7
million barrels of oil a day. This does not even fit with official numbers! The problem is that all of this data is simply fudged. They
talk about exports, but don’t mention imports of oil. Venezuela consumes at
least 800,000 barrels of gasoline a day, but Venezuela does not produce such a
large amount. Thus, the reality is that Venezuela may be “exporting” 2.7
million barrels of oil, but Venezuela is not getting paid for that many and in
the end it has to also import to satisfy the local market. In fact, that the numbers are fudged, can be seen in the
next paragraph on the “financial account”. After telling us the country exports
US$ 28 billion, the Central Bank tells us that there was a full US$ 11.1 billion
in a financial deficit, a full 39% of the “income” from imports, which
corresponds to “the increase in the oil credits given to foreign clients which
are not related to PDVSA” What than means in plain language is that PDVSA is not
charging for a full 39% of its exports or 1.05 million barrels of oil a day.
Which I don’t believe either, it is simply too large a number. The fudging is
simply getting too absurd. We don’t give away so much. As simple as that. But let’s look at this from a different point of view: The Government claims Venezuela produces 3.3 million barrels
a day The country consumes 800,000 barrels a day. That only leaves 2.5 barrels a day for import, so the 2.7
million number given in the BCV report and calculated on the basis of the average
price of the Venezuelan oil basket in the second quarter has to be fake. And so has to be the 11 billion in credits, we just don’t
give away so much oil. It is just creative accounting. I am sure that these “credits”
hide the value of a lot of the gasoline imports of the country. But we can “redo” my calculation using the final fudged numbers
given out by the Central Bank. The final numbers should be fine, they are harder to fake: The Central Bank says that the surplus in the current
account was US$ 2.9 billion The total for oil imports was US$ 28 billion. Thus, the “net”
surplus, including everything is only 10% of the amount from oil imports. Since
the average price for the quarter was US$ 109.9, then ten percent of this is
US$ 11, which says that if the price of oil dropped to US$ 98.9 per barrel, the
balance of payments will be negative! Think about it, my very approximate number was too low!
11:45:02 PM
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This may be one of the most relevant videos of an Hugo Chavez tirade.
First he has his world fight and claims the revolution starts here in
Latin America.
But, oops, here is the leader of a supposedly XXist. Century
Revolution, after calling Marx and Engels the leaders of “scientific
socialism”, Then he calls Simon Bolivar a socialist. He also talks
(minute 1:20 or so) about the “pages” and the “windows” and the
“Internet” clearly showing he has no clue about the difference between
a computer and the Internet
Then he just says what he always wanted to say, after calling a local
newspaper a pro-US paper, people with no country, because the laws he
issued allowed him to confiscate 1600 Kilos of rice, he threatens that
freedoms for some sectors will be finished and that people will have
fewer freedoms. Of course, it will be the oligarchs whose freedoms will
be restricted. Can it be clearer than that?
Some leader! He then praises the same guy I criticized last week for
saying that price increases will not lead to inflation. Another
“scientific” hero of the revolution I guess. Has anybody asked what
happened to the money he got from selling the rice at the subway
station? Is Mr. Saman depositing it in his personal account?
Such are the ways of the stupid revolution!
11:24:34 PM
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Just a reminder in the face of the wave of nationalizations
and confiscations:Art 115.
of the Venezuelan Constitution: Artículo 115. Se garantiza el derecho de propiedad. Toda
persona tiene derecho al uso, goce, disfrute y disposición de sus bienes. La
propiedad estará sometida a las condiciones, restricciones y obligaciones que
establezca la ley con fines de utilidad pública o de interés general. Sólo por
causa de utilidad pública o interés social, mediante sentencia firme y pago
oportuno de justa indemnización, podrá ser declarada la expropiación de
cualquier clase de bienes. Art. 115. The right to property is guaranteed. All person have the
right to the use, possession, enjoyment and disposition of its goods. Property
will only be the subject to the conditions of restriction and obligations that
the law establishes with the public good or general interest as its end . Only
die to the public good or social interest, via a firm sentence and opportune payment
of just indemnization, can the expropriation of any type of good be declared. Can it be any clearer than that? Each and everyone of the
steps in the nationalization and expropriation of Sidor, Cemex, Fabrica
Nacional de Cementos and Cementos Caribe are simply illegal. Apparently, many people don’t want to defend their rights.
10:50:15 PM
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Tuesday, August 19, 2008 |
It was one of those days. Where do I live? Some bizarre
alternate world or simply the silly and amateurish Bolivarian revolution? And it did look
silly today, really silly and amateur. It is all smoke and mirrors; reality has nothing to
do with it. The people have nothing to do with it. It is just some warped mind
planning and thinking what in his deranged mind thinks is “good” without any
evaluation of criticism. And the people sucking up to the autocrat! My God! Where was
the opposition? Where was the “private sector”? Is everyone just trying to milk
the revolution to the last penny and leave? That seems to be the plan as a
strident silence permeated Caracas today, as things got more and more bizarre
and there seems no stopping to it: ---There was the Cemex show of course. Red shirts and empty-headed
radicals waving flags celebrating the expropriation of the cement company.
Funny, if the Venezuelan private sector could not run Cemex (then called Vencemos)
efficiently, is there any hope for the incompetent, inefficient and corrupt
Chavez administration? Of course not. It will just be a matter of time. Meanwhile,
the Minister of Finance tries to argue that the company is
only worth US$ 400 million, because that is what it is worth in the Caracas
Stock Market. Thus, you clobber the market, violate its rules, drive away
foreign investors from it and then you try to apply “free market” rules to the
pricing, proving what a farce the whole thing is. Because Holcin,
was paid more than the US$ 400 million the Minister of Finance is quoting,
despite being a much smaller company, with a much smaller production of cement.
---Then there is the Comisión Nacional de Valores, the
defender of the small investor and supposed to defend the law they swore to
represent. They have said nothing ever since Chavez announced the expropriation
of all of the cement companies and surprise, surprise! Today they ordered
the halting of trading of the shares of Cemex “in order to achieve the transparency
of the markets”. Hello! Did you learn about the Government’s intentions
today? Or were you on vacation, because the news has been around and the “halt”
in trading came so late, that some shares actually traded today before the news and halt came out. I guess the Comisión
Nacional de Valores was in Miami or Margarita this weekend because apparently
robolutionaries work less than five days a week. Of course, this “transparency” did not include respecting the
country’s laws. How many times has the securities regulator stopped deals,
mergers and buyouts until the price was justified, but in this case allows the
Government to trample the law, investors and their own markets. What fools! ---And then, for those that thought the recent passing of 26
Bills is somewhat irrelevant, the “new”, “new” consumer protection agency confiscated
exactly 1,670 kilos of rice from the Excelsior Gama supermarket in Santa
Eduvigis in the East of Caracas and proceeded to sell it at the subway station
nearby. The charge? That the presentation of the rice had not been approved buy
the Government and as established by the Head of the “new”, “new” consumer protection agency, “rice
sold outside regulation will be sold directly to the public“. These guys rally believe their BS, in fact, the Head of the
newly named agency stood at the subway station selling himself the regulated
rice to the public. Imagine his face when a very polite lady, bought a bag,
opened it and just threw it all over his face. You just don’t fool around with
my food provider seemed to be saying the lady. ---And just when I thought the day was over, I get a press
release which confirms that this is all part of Chavez’ gigantic folly. Electricidad
de Caracas, nationalized (legally!) a year ago presented its financial results
for the first six months of 2008, after the company has been in the hands of the
Government for twelve months. In his short period of time, the robolution has been able to
turn the company form a Bs. 130 million profit, to a Bs. 13 million loss. This
came accompanied with a drop in 40% of the cash flow of the company and margins
shrank by 20%. Now, think about it, this is a monopoly, you provide electricity,
you bill, you get paid. No payment you get the juice shut off. Simple business,
no? Well in barely twelve months we Venezuelans are already losing money.
Imagine running Cemex’ plans, or Cemex’s commercialization of cement, or very
simply, running Banco de Venezuela, in what is a very competitive business in
Venezuela. But I do hope that now that the Ministry of Finance says
that Cemex is only worth US$ 400 million, a reporter or someone asks him why
did the Chavez Government pay close to US$ 1 billion for Electricidad de
Caracas a year ago, after all, it is only worth 319 million in the local stock market
today. Why did they overpay? Is that illegal? Doesn’t the law punish this? Shouldn’t
we send someone to jail for this? Of course, robolutionaries go to heaven or to the Swiss bank,
while everyone else is banned or sent to jail. Get used to it! Ask yourself now: Who is next? One day it will be you...
11:48:29 PM
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Ironic that as I write this waiting for Chavista hoodlums to
take over Cemex pants, I also read that none other than Hugo Chavez complained
tonight to his Minister of land and perennial Cabinet member Elias Jaua to
please start pressing on with his Land Bill because in the autocrats words
“Elias I want to see results because I have yet to see a single one”Which coincides with what we have not seen, except that the
Land Bill was not passed as part of the package of Bills two and half weeks
ago, but was actually approved seven years ago and in the words of the man who
created it and sold it as the best thing since warm water was invented. But
like most things in his failed revolution, seven years later not even the
autocrat can see a single result from that Bill. In fact, if he was a little bit critical he would realize
that the Bill has been a negative for Venezuela, destroying productive lands
and leaving in shambles formerly productive farms. But tonight, the National Guard and a bunch of Chavez' red
guards await outside a perfectly run cement plan to take it over so that
another folly by the quasi-Dictator can be executed. And soon it will become
another failure, but maybe seven years from now, he will ask whatever happened
to the cement companies we took over, there is no cement. And Chavez’ own personal biased could be seen today as his
Government reached agreements with Lafarge and Holderbank but not with Cemex,
as the Government made goof offers to the first two, but a pitiful one to
Cemex, his final revenge against the Mexicans he hates so much. Maybe he tried
to join the mariachis when he was young but was rejected. That seems to be the
hallmark of his life. And thus today we have an expropriation and a blatant
violation of the Capital Markets Law, but we have not heard anything from the
President of the Stock Market, or the President of the Comisión Nacional de
Valores or from any politicians, they are probably doing more important things,
as property rights and freedom are dramatically subverted by Hugo Chavez. Thus, another tragic event in the destruction of Venezuela took
place today. Who is next you may wonder? Will it be the food division of Polar?
Will it be another Spanish Bank? Just think, after all of those giants are
taken over, Chavez may go after your property. What will you say then?
12:56:19 AM
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Monday, August 18, 2008 |
 This sign from Tal Cual is so oxymoronic that I am not even sure how to translate it, Gym for Gymnastics does not quite do it, even if that is what it says.
Maybe now sports belongs to all of us, but Mision Robinson is still an unfinished job. Creativity in sign writing is not their forte.
10:45:45 PM
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