Archive for the ‘politics’ Category

Venezuela: “Underperformance” doesn’t begin to describe it

Tuesday, October 14th, 2014

Even when the Venezuelan government has not allowed its own numbers to be verified for almost a decade, and stopped reporting various standard economoic indicators several years ago (practices which all started during Chavez’s administration), the numbers that it does report confirm The Economist’s appraisal of the country as Probably the world’s worst-managed economy.

Right now the government,

facing deteriorating economic conditions at home, is quietly slashing imports to cover foreign debt payments amid a severe hard-currency crunch.

Carmen Reinhart and Kenneth Rogoff write on Venezuela’s Spectacular Underperformance 

Maduro, of course, rules over a major oil-exporting economy that is so badly mismanaged that real (inflation-adjusted) per capita GDP today is 2% lower than it was in 1970, despite a ten-fold increase in oil prices.

The relevant reality now is the long-term plight and dwindling standard of living of the average Venezuelan citizen. Over the past 45 years, as Venezuela’s real per capita GDP fell, US per capita GDP roughly doubled and Chile’s per capita GDP nearly tripled. And neutral observers project that 2014 will be even worse for Venezuela – not surprising, given the chaos of the country’s policy fundamentals.

Venezuela repeatedly has defaulted on the moneys it owes on pharmaceutical imports, food, airlines, oil suppliers and joint-venture partners; Reinhart and Rogoff ask

historically there have been many external defaults without domestic defaults, the converse is not true: nearly all domestic defaults are “twin defaults” that also involve external creditors. Will the Venezuelan case be different?

In other words, the two things go hand in hand, and it’s only a matter of time before Wall Street bond-holders are treated like foreign airlines.

However, Francisco Toro points out that

in the technical sense that’s relevant in market terms, Venezuela is not in domestic default.
. . .
This is the crux of the Great Venezuela Macro Debate of 2013-2014: to what extent can the government’s patent inability to meet its obligations be ascribed to a basic inability to pay, and to what extent is it just the Nth insane distortion you get when the government makes it illegal to pay a penny more than 77 cents for a $10 bill?

So, while we split hairs on exchange rate misalignments and the like, Venezuela undoubtely becomes a land of political killings and gang turf wars.

Related: Venezuela: The Left vs. reality



En español: Últimas noticias del idiota iberoamericano

Tuesday, September 30th, 2014

Argentina: Carlos Alberto Montaner & Alvaro Vargas Llosa: “Argentina ha instalado un sistema económico perverso” – Infobae

Carlos Alberto Montaner y Álvaro Vargas Llosa, autores del libro “Últimas noticias del nuevo idiota Iberoamericano”, analizaron en InfobaeTV el rumbo del Gobierno y advirtieron que “camina hacia una catástrofe“. Las trampas del populismo y la “responsabilidad” de la oposición.

En la Argentina se instaló un sistema populista, de gran concentración de poder político; de erosión sistemática de los contrapesos y del control del poder; un sistema económico muy perverso, que consiste básicamente en extorsionar al campo para subvencionar a la ciudad, a través de eso crear un voto cautivo para permitirle al sistema una continuidad”, sentenció el peruano.

Luego advirtió por las dificultades crecientes que enfrentará la economía por la desaceleración que sufrirá como consecuencia de los cambios en las condiciones internacionales. “Hoy tiene un gasto público descomunal y una tendencia a gastarse todas sus reservas, que está provocando una situación de mucha urgencia, muy dramática”. Incluso consideró que una devaluación como la de enero puede no ser suficiente para hacer frente a la brecha entre el dólar oficial y el libre: “A los pocos meses el mercado te demuestra que tus políticas están cayendo en las mismas consecuencias”.

Montaner no fue menos optimista. “Argentina está en un ciclo muy negativo, camina hacia la catástrofe“.

El cubano reconoció que, pese a ese agotamiento que denuncian, el Gobierno goza de un considerable apoyo. “Si la oposición no consigue juntarse, va a ser muy difícil el remplazo y el sostenimiento del remplazo”.

Y explicó que “en el grupo clientelista, los clientes van a mantenerse unidos porque tienen un interés particular, que no es el del Estado, pero la oposición tiene una responsabilidad de sacar al país de esta terrible situación”.

Entrevista:

Back to English, in other Argentina news:

Argentina in Contempt of Court in Bonds Case, U.S. Judge Rules
Nation Has Tried to Circumvent Rulings on Repaying Creditors Holding Defaulted Bonds, Court Says

The contempt decision comes after the country has made several attempts to get around Judge Griesa’s series of rulings that say the country can’t pay its restructured bondholders until it pays the approximate $1.6 billion it owes to its holdout creditors.

Argentina recently passed legislation to switch the jurisdiction of its bonds governed by U.S. law to Argentina, which Judge Griesa repeatedly has said is illegal and can’t be carried out. The country also is trying to remove Bank of New York Mellon Corp. BK -0.85% as the trustee bank that processes payments and replace it with a local Argentine bank, another move that triggered the contempt citation.

“[Argentina] has been and is now taking steps in an attempt to evade critical parts of” U.S. court order, Judge Griesa said on Monday at the federal courthouse in Manhattan. “There’s a very concrete proposal that would clearly violate the injunction.”

Judge Griesa has jurisdiction in this case because Argentina in the 1990s borrowed money from foreign investors under the agreement that any disputes would be litigated in U.S. courts. Argentina defaulted in 2001, and has for years battled hedge funds that refused to accept debt exchanges in 2005 and 2010.

The hedge funds that sued Argentina in the U.S. agreed to support a request by Citigroup (C), which sought to pay $5 million interest, tied to Argentine bonds, due to today.

Venezuela: What hemorrhagic fever? UPDATED

Friday, September 19th, 2014

The Venezuelan government continues to deny it,VENEZUELAN GOVERNMENT DISMISSES EXISTENCE OF DEADLY ILLNESS

An apparent viral disease causing fever and skin rashes has taken the lives of ten in Venezuela, according to hospital officials. While doctors have ruled out both Ebola and Chikungunya fever, they remain stumped as to what is causing the illness.

According to El Universal, the nation’s largest newspaper, the virus has hit hardest in the northern state of Aragua, where eight people died last week. Maracay’s Central Hospital in the region declared a “state of alarm,” noting that the disease could be either viral or bacterial, but tests have not confirmed its identity. Of the initial eight victims, half were children, all who died less than 72 hours after being admitted to the hospital. One of the ten victims died not in Aragua, but in the capital, Caracas.

As Venezuela and others follow the disastrous Cuban model, the open border presents new challenges.

Monica Showalter’s editorial at IBD:
As Obama Leads Anti-Ebola Charge To Save Africa, Little Done About New Diseases Coming Up From Border

Venezuela has confirmed 398 cases of chikungunya fever, 55,970 cases of malaria and 45,745 cases of dengue fever — all diseases that were either unknown or else had had been eradicated from the country two decades ago. There’s also 9 deaths from a strange new, unnamed hemorrhagic fever in Aragua state.
Meanwhile, in Honduras, El Salvador and Costa Rica, a monster dengue epidemic is raging through the region right now, with 120,000 cases, and 60 deaths, and public health emergencies declared in those countries.

Indeed,

The reality is, an unguarded border, a welcome-mat approach to illegals, well developed smuggling networks, and zero medical screening are virtually a guarantee of the spread of new diseases — and demand the political will to investigate it.

But the president’s focus is on Africa right now, and on the frightening disease that has caught the media’s attention and which may get his poll numbers up.

Yet the millions of malaria, tuberculosis and AIDS cases far more rampant in those African countries are getting no attention. Nor are the illnesses that could easily come up here from the south.

It points to crass politics — a wag-the-dog bid to divert public attention from the president’s other political problems, and a pander for the Latino vote.

Add to that the rumors of terrorism, while the administration ignores the Danger at the Southern Border,

since Political imperative trumps national security.

UPDATE
Deadly Outbreak in Venezuela Deemed ‘Terrorism’
President Nicolás Maduro said he ordered the prosecution of doctors who had alerted the public to the recent deaths of nine people in a public hospital from an unidentified but possibly infectious disease.

Is Populism beatable?

Wednesday, August 20th, 2014

Today is question day: Is Populism beatable?

Populism has been the driving force behind both our political landscape and our economic misfortunes. This trait has marked the misguided economic policies of several administrations, with Chavismo just exacerbating the problem. Because, in essence chavismo repeats a well’worn recipe: continue to fuel the spending binge, among other insane policies, with an unprecedented oil boom backing this profligate party.

Indeed,

Populism thrives in societies where the rule of law is undermined or non-existent, with sky-high economic inequalities, a weak institutional framework, and polarization among other contributing factors.

Carlos Rangel’s post offers a start, but my question is, can totalitarian Communism be ousted from Venezuela at this point?

Mexico: The dancing ‘dipu-tables’

Monday, August 18th, 2014

Puerto Vallarta PAN legislative-strategy meeting:

Video Rocks Mexican Opposition Party
Online Publication Shows Lawmakers From Conservative PAN at Party With Scantily Clad Women

The four-minute video was published this week by Reporte Indigo, a muckraking online publication known for taking on public corruption and politicians of all stripes. The publication’s publisher, Ramón Alberto Garza, said in an interview that the video’s newsworthiness rests in the question of whether the party was paid for with public funds. The PAN officials in the video, none of whom dispute its authenticity, say it wasn’t.

Mr. Garza didn’t reveal where his publication obtained the video, in which a chuckling man can be heard shouting, “The Viagra is going to run out.”

Here’s Garza’s interview, in Spanish,

Garza points out that one of the men caught hot-handed is the man in charge of managing the money allotted to the PAN funds from public funds.

It’s not the first time PAN members were caught copping a grope:

Brazilian police in late June arrested two PAN officials and two other Mexican men for allegedly groping a woman on a street corner after Mexico’s World Cup loss to Holland, then beating her husband when he tried to intervene. The men have been fired from their jobs with a Mexico City district government and remain jailed in Fortaleza, Brazil, charged with assault.

Paco Almaraz did a burnt-out unit skit on them,

Post re-edited for clarity.

Note to The Economist: Mujica is no Jefferson

Friday, August 15th, 2014

My latest article, The Economist lowers the bar on low expectations, is up at Da Tech Guy Blog.

Brazil: Socialist Party candidate dies in plane crash

Thursday, August 14th, 2014

We talked about this in last night’s podcast:

Brazilian Candidate Dies in Crash
Eduardo Campos, the Brazilian Socialist Party candidate for president, was killed in the crash of a private jet, upending the October election.

A leftist who was also friendly to business and tough on crime. Mr. Campos had hoped to appeal to both progressives and fiscal conservatives, but his campaign had trouble gaining traction. A recent poll had shown him with about 8% of the likely vote—a distant third behind Ms. Rousseff and her main rival, Aécio Neves of the Brazilian Social Democracy Party.

Campos was in third place behind Dilma and Aécio, but the accident may affect the SP’s standing,

Those standings could change, however, if Mr. Campos is succeeded at the top of the ticket by his popular running mate, Marina Silva, who ran for president herself in 2010 and won about 19% of the vote.

Ms. Silva had been exploring another presidential run again this year, but when her own party, Rede Sustentabilidade, was unable to meet the requirements to get her onto the ballot, she joined Mr. Campos’s ticket as vice president.

A deeply religious, environmental activist, Ms. Silva could attract votes from both the left and right in a way that Mr. Campos couldn’t, said João Augusto de Castro Neves, Latin America director at the Eurasia Group think tank in Washington.

“She will threaten both Dilma and Aécio,” he said.

It was a horrible crash: the plane’s fall damaged seven houses:

O Globo reports that firemen have found the plane’s cabin and Campos’s wallet (link in Portuguese).

In addition to the seven killed who were aboard the plane, there were six residents injured.


The Pontifical Council denounces ISIS

Wednesday, August 13th, 2014

My latest at Da Tech Guy Blog, The Pontifical Council denounces ISIS, is up.

Don’t miss also tonight’s podcast at 8PM Eastern, when I’m Silvio Canto’s guest.

Brazil: Opposition now has Arminio Fraga

Tuesday, August 12th, 2014

Arminio Fraga, president of Brazil’s central bank from 1999 to 2002 under the Fernando Henrique Cardoso administration, is now back in the game:
Brazil Ex-Insider Returns to Help Oust President
With slow growth and high inflation hurting Brazilian President Dilma Rousseff’s chances of winning a second term, former central banker Arminio Fraga joins the opposition to persuade voters that Brazil needs a new economic steward.

Mr. Fraga appears to be positioning himself as something of an inflation whisperer. As president of Brazil’s central bank from 1999 to 2002 under the administration of President Fernando Henrique Cardoso, he helped stabilize the currency and rein in consumer prices. Mr. Fraga supports restrained public spending, tough inflation targeting and a floating exchange rate, policies that became known in Brazil as the “economic tripod.”

He is highly critical of the Rousseff administration’s decision slow inflation by capping gasoline prices and electricity rates, moves he dismissed as “gimmicks.” He’s also alarmed that Brazil’s central bank has been intervening regularly in the currency markets to prop up Brazil’s real against the dollar, a strategy he ridicules a “populist move.”

Mr. Fraga said these are stopgap measures that already are proving unworkable and that Brazil needs to focus on long-term fundamentals like increasing private investment and balancing its books.

The fact that earlier this year Standard & Poor downgraded Brazil´s long term bonds credit rating to one notch above junk doesn’t help Dilma – but you have to remember that, even when Dilma’s the candidate, Lula is the man to beat.

Today’s illegal invasion headlines

Friday, August 8th, 2014

From Drudge:

Rwandan man accused of war crimes arrested crossing into USA…

Immigration Official Arrested for Bringing Man from Ghana…

Border Patrol: Feds Releasing Murderers Into USA…

Email Tirade…

Mother of slain agent: ‘I will not rest’…

WIRE: Americans worry illegals threaten way of life, economy…

UNIVISION POLL: Immigration Low Priority for Latino Voters…

DREAMers vow confrontations…

REPORT: New migrants entering public school system to cost Texas taxpayers $45M…

Feds Bend CDC Rules, Allow Sick Illegals to Stay…

Embattled Dem: I voted with John McCain…

Americans Renouncing Citizenship Hits New Record…

Neoneocon answers Dana Milbank:

Dana Milbank wants all you old white men to know that he understands your concerns, although he doesn’t share them. Big of him, isn’t it?

Actually, he doesn’t even understand them, as his essay proves. He thinks the concerns of those other white men have to do with race itself, and that they’re upset because, increasingly, “Whiteness has less and less to do with being American.”

No, Dana dear, they’re upset because traditional and historical Americanvalues increasingly have less and less to do with being American. You’re the one obsessed with race and ethnicity. For most people opposing increased illegal (or greatly increased legal) immigration, the problems are the following ones, and they have nothing to do with the color of the new arrivals:

(1) Letting people come here who break the law means that you’re bringing in a lot of people with no respect for law. That bodes ill for their future as law-abiding citizens.

(2) Way too many of the new arrivals are economically dependent on the welfare state, and in fact by their own admission that’s one of the main reasons they come here. That was never true in the past (especially back when there was no welfare state) and will constitute a drain on our already-stressed economy no matter whether such arrivals are white, black, green, or purple.

(3) Years ago we stopped stressing assimilation in all its important manifestations. American values have suffered as a result. Assimilation was (and still is) the key to this country’s encouraging immigration and yet continuing to be America, with its American exceptionalism intact. It’s not the race of the new arrivals that’s the problem, the problem is that their failure to assimilate is making this country more like the places from whence they came, and that’s not a good thing.

I don’t see white Dana spending years living in China, Latin America, or any other such places.

The Squeegee men and broken windows are back in NYC