Sunday, August 21, 2005

Recent Venezuelan factoids --GDP in Venezuela was up 11.2% in the second quarter of 2005 thanks to heavy spending by the Government, However, oil GDP was barely up 1.5% in the quarter, despite the fact that it is measured versus the same quarter a year ago, when the average price of oil averaged just below $40 a barrel. --The number of Deputies to be elected to the National Assembly in December is determined on the basis of projections of population by the National Institute ofr Statistics, rather than actual census numbers. Curiously, Miranda and Carabobo states both lost a Deputy. Theses two states are among the top three in which the opposition has strength (The other one is Zulia). This is teh first time in decades that either state grows slower than the country, execpt the other times it was a census, these time it is projections. --Since 1998, when Chavez became President or later, infant mortality is up 16%, death by malnutrition is up 40%, malaria is up 50%. --The "popular car" that will cost around US$ 6,000-8.000 will be exempt from the Value Added Tax (VAT). Another subsidy by the poor, who could never afford one of these. Gas, by the way, is still US$ 0.19 per gallon. --Imports in the second quarter were up 52.2% making everyone wonder whatever happened to the "endogenous" development. By the way, the Government's food program Mercal, imports 70% of its products. Go figure! 8:17:12 PM    comment []

Onwards the pretty robolution You have to love the pretty robolution and how fast it brings people out of poverty. Certain people. Such is the case of former Lieutenant Arne Chacon. Chacon, who participated in the attempted coup of 1992 and happens to be brother of the Minister of the Interior and Justice Jesse Chacon is now President of Baninvest, an investment bank that he recently purchased with a group of friends and of which he is an investor. The new owners are asking that the bank be turned into a universal bank. Up to the early 90's in Venezuela, regulators did not allow banks to act as financial agents in all fields. Thus, a commercial bank could not give out mortgages and banks could not invest in projects themselves. For these activities, you had to get an additional license and have that license act as a savings and loans for mortgages and an investment bank for investments. With time, the Supeintendent of Banks, began allowing banks to become "Universal" and perform all activities. After the financial crisis of 1994, the Superintendency decided that it would not issue new banking licenses, but there were many around either as mortgage banks or investment banks, which have been sold by its owners to others that wanted to turn them into commercial or universal banks. The last price I heard for one of these licenses was US$ 15 million, with the premium coming from their scarcity. So you have to wonder where the money came from to buy this one in particular. Additionally the law states that you have to have banking experience in order to be on the Board of Directors of a bank. Does Chacon have it? Asked about thiis the Superintendent of Banks "guaranteed" that they would check where the funds came from to buy the bank and the whole transaction would be examined "in depth". Yeah, sure. 2:20:34 PM    comment []