Fausta's Blog

ARGENTINA
The Argentine president and her empire in the south
Argentine President Cristina Kirchner has been quick to accuse Britain of ‘imperialism’. But, as Ian Mount and Philip Sherwell write, she has been creating a rather impressive empire of her own.

Argentina in UK ‘nuclear’ claim
Argentina accuses the UK of sending a nuclear-armed submarine to the South Atlantic, and makes an official complaint to the UN over the Falklands.

Barack Obama’s shameless Falklands betrayal will overshadow David Cameron’s Washington visit

Repsol Says Argentine Shale-Oil Formation Requires $250 Billion Investment

BRAZIL
Concerns with the Brazil Narrative

Privatising Brazil’s airports
Fasten your seat belts
Sky-high prices raise the prospect of more sell-offs

Drippy No More
Once viewed as filler for mass-market brands, Brazilian coffee is hot. A look at its sweet and nutty charms

The Wall Street Journal has a Brazil Special: Have It Your Way
There’s a lot to see in a country with 4,600 miles of coastline and nearly half the landmass of South America. But whether you’re into art, urbanity or the outdoors, you’ll find something to love in this destination trifecta

CHILE
Chile drops brush fire charges against Israeli

COLOMBIA
Colombia seizes Farc rebels’ explosives cache
The Colombian security forces have seized three tonnes of explosives and arms belonging to the country’s biggest left-wing rebel group, the Farc.

CUBA
How Kennedy bought 1,200 hand rolled Cuban cigars just hours before he ordered blockade of communist state 50 years ago

Will The Pope Absolve Fidel Castro?

Hey Fidel, Abuse of the Sacrament of Confession is a Mortal Sin

DOMINICAN REPUBLIC
Dominicans in deadly migrant boat accident say they pleaded to return

GUATEMALA
U.N. Investigative Body to Stay in Guatemala

IMMIGRATION
California’s Demographic Revolution
If the upward mobility of the impending Hispanic majority doesn’t improve, the state’s economic future is in peril

The problem some Texans have with border fence

LATIN AMERICA
The Obama Effect in Latin America
Placating enemies instead of strengthening partnerships with friends.

President BO’s “not much of a policy” toward Latin America

Self-deportation works

MEXICO
Cynthia Vanier’s Background and Activities in Libya
Ms. Vanier, who traveled to Libya in 2011 as a consultant to a large Canadian construction company and is now jailed in Mexico, is accused of trying to help smuggle Saadi Qaddafi, the son of the former Libyan dictator, into the country

Mexico mob kills three suspected kidnappers
Security officials in Mexico say three men have been killed by a mob for allegedly trying to kidnap a group of youths.

Candidacy tests Mexico’s culture of machismo

Mexico’s Presidential Election and the Cartel War

PANAMA
Potrerillos Neighborhood Watch & Public Safety Report: 2/9/2012

PERU
Sendero Luminoso, fragilidad institucional y socialismo del Siglo XXI en el Peru, PDF file.

PUERTO RICO
Puerto Rico Referendum Could Revitalize D.C. Status Debate

VENEZUELA
On Obama’s Watch

Venezuela’s presidential campaign
Mano a mano
The opposition has got its act together at last. Will that be enough to topple a convalescent and vulnerable Hugo Chávez?

Threats against Venezuelan state employees may suppress turnout for Sunday’s primary election

The week’s posts:
Ecuador: More persecution of journalists
Drugs, guns, and bundlers UPDATED

I was writing about this nearly three years ago, and it’s not stopping.

Argentina’s Capital Flight
The government clamps down as the economy deteriorates and capital attempts to flee the country.

As kichnerismo enters its ninth year, the populist economic model is beginning to fray. Price controls and contract abrogation have damaged foreign investment flows. Government expenditures increased last year by 40% while revenues were up by only 30%, according to Universidad Torcuato Di Tella economist Pablo Guidotti. “If the economy slows it will aggravate this fiscal weakness,” he told me in a telephone interview last week.

Normally deficits can be financed in the international capital markets. But Argentina has been cut off since 2001 because it is in default to the Paris Club governments and to private creditors. Mr. Guidotti says the central bank has been “printing” money to close the gap. Inflation estimates by other private-sector economists of over 21% in 2011 support his claim.

The central bank insists that annual inflation is only 10%, and it has used capital controls and market intervention to limit peso devaluation to a similar level. Markets know better. The truth is showing up in the drag on Argentine competitiveness in export markets, i.e., Argentine products are too expensive. It is clear that the peso will eventually face a much larger devaluation and Argentines therefore prefer to hold dollars. But experience tells them that holding dollars inside Argentina isn’t real protection, and tighter capital controls have increased fears of confiscation. This is why Mrs. Kirchner has employed sniffer dogs.

On the fiscal side trouble is also looming. Even with generous central bank accommodation, Mr. Guidotti says, fiscal accounts are “deteriorating.” The government has recognized this and announced that it will reduce subsidies in gas, electricity and water and will stop subsidizing the Buenos Aires subway. While the administration claims the utility cutbacks will only hit the wealthy, Mr. Guidotti says “it will affect almost everybody except the very poor,” who will have to apply for an exemption. Last week ticket prices on the subway in the capital went up by more than 100%. But by all accounts the belt tightening has only just begun.

Era of Argentine Subsidies Ending
President Kirchner Starts to Pare Back State’s Largess Amid Strained Finances, a Slowing Economy; the dogs are out, let the strange season begin.

Who let the dogs out?

Investors are excited about a new shale oil find, reportedly six times higher than previously estimated:
Repsol’s Argentine Oil Find Is Company’s Biggest

Repsol YPF SA (REP), Spain’s largest oil company, rose the most in six-weeks in Madrid trading after its Argentine YPF SA (YPF) unit made its biggest ever find at a shale oil field in Patagonia.
YPF, in which Madrid-based Repsol owns a 57 percent stake, said yesterday well tests showed the Loma La Lata field holds about 927 million barrels In May, it had said the find was about 150 million barrels.
…
The field will roughly double YPF reserves and helps cement Argentina’s ranking as having the world’s third-largest probable reserves of shale oil, behind the U.S. and China, based on U.S. Energy Information Administration data.

Of course, the US’s reserves are, from a pragmatic point of view, meaningless for as long as the US government continues to forbid the development and exploitation of our own natural resources.

But I digress.

At present, YPF has total oil reserves of about 531 million barrels. The find announced yesterday is located at the Vaca Muerta formation at Loma La Lata.

Vaca Muerta means dead cow.

The Dead Cow finding in Argentina will be expensive to develop and process

Shooting water and chemicals deep underground to blast open oil- and gas-bearing rocks can be a much more intensive, and expensive, process than traditional onshore drilling. And rising concerns in the U.S. and elsewhere that the process could contaminate aquifers could put a brake on its development in Argentina, said Jim Flanagan, an analyst who focuses on Latin America with energy consultant IHS CERA.

Years down the line, the country may become a petrostate of sorts. Dependence on foreign oil and Hugo Chavez will decrease — if the government doesn’t blow it,

Yet, Argentina has had trouble developing both shale and conventional reserves because of heavy intervention in the energy sector by the leftist government. After enduring an economic collapse in 2001, Argentina imposed price controls on energy to protect consumers. But the controls, along with the populist tenor of the Argentine governments of Cristina Kirchner and her late husband and predecessor Nestor, have discouraged new investment despite fast growth in Argentina.

The combination of low investment and rising energy consumption, along with higher prices, is increasingly putting Argentina in a bind. Argentina’s overall energy trade balance, including electricity, will swing this year to a deficit of about $3.5 billion from a surplus of about $1 billion in 2010, according to Daniel Montamat, a former energy secretary who also once served as YPF’s president when it was a state-controlled company.

For now, however, the clock is ticking (h/t Instapundit):

One hopes they are wrong, but it looks increasingly as if Argentina is now embarked on the next phase of its recurring bipolar economic disorder. The manic phase has peaked and the long and painful fall has now begun. The next step of the cycle is marked by increasingly desperate and wild struggles of a government to cope with increasingly intractable and pressing problems. During this cycle, seasoned Argentines often begin moving their money out of the country and anticipating one of the recurring bouts of inflation that periodically reduce the nation’s money to worthlessness.

A ten year cycle? If so, the next one’s about to strike.

I mentioned this last week in my post about how capital is abandoning Argentina; The government is persecuting economists who dare question the official rate of inflation.

Today Instapundit links to Juan Forero’s report, Fight over Argentina’s inflation rate pits government against private economists.

The difference between the official rate and the actual rate is abysmal:

FInes and criminal complaints will not obscure that fact.

While default waits in the wings, the electorate voted for Cristina Fernandez de Kirchner by a 53% majority.

At The Atlantic, The Price of Argentina’s Default

In the news,
Argentine President Secures Second Term

President Cristina Kirchner had a commanding lead and looked certain to win a second term on Sunday, and her Peronist party faction appeared close to retaking Congress, in the most lopsided election in the almost three decades since Argentina returned to democracy.

With 90% of polling places reporting, Mrs. Kirchner had 53.74% of the vote, far ahead of the nearest of six competitors, the socialist governor of Santa Fe province, Hermes Binner, who had 17.01%.

Translation from the video, “Make no mistake, I’m not talking about him [Ernesto Kirchner] as a husband, I’m talking about him as a political framework, perhaps one of the best political frameworks our country has produced”, which is probably damning with faint praise.

She certainly benefited from two factors:
a. China’s demand for raw materials
b. Ernesto’s death a year ago,

The win would mark a dramatic comeback for Mrs. Kirchner, who has been embroiled in conflict almost since taking office in December 2007. Days after her inauguration, U.S. prosecutors in Miami alleged that a suitcase holding $800,000 seized by Argentine customs authorities earlier in 2007 was a contribution to Mrs. Kirchner’s campaign from Venezuelan President Hugo Chávez. Mrs. Kirchner decried a “garbage operation” in the U.S., the first of several conflicts with Washington.

Subsequently, she was caught up in a bitter and debilitating dispute with Argentine farmers over an increase in the grain export tax. Her faction of the Peronist party lost control of Congress in midterm elections in 2009, and some political observers wrote her off.

Mrs. Kirchner came back, however. The economy recovered strongly from the global economic crisis of 2009-2009, as brisk demand from China buoyed farm commodity prices. The Kirchners proved adept at dividing and conquering the opposition, which was less adroit at advancing its agenda. Finally, the death of Nestor Kirchner of a heart attack at the age of 60 in October of 2010 created a wave of sympathy for Mrs. Kirchner.

Pollster Federico Aurelio said that in the wake of her husband’s death, Mrs. Kirchner’s approval rating, already on the ascent, shot up another 10 points or so. He says 70% of Argentines now approve of her.

It probably didn’t hurt to wear nice shoes.

Cristina Fernandez, president of Argentina, believes President Obama is inspired by Argentina’s example. He may well be,

Less than one month into Barack Obama’s presidency, Argentine president and hardcore Peronist Cristina Kirchner gave this assessment of his government: “I don’t know if Obama has read Perón, but let me tell you, it sure seems like it.”

Mrs. Kirchner was speaking to union members of the newly nationalized Aerolineas Argentinas, and she confessed she felt “contenta.” All around the world governments were intervening in their economies as if to “copy” the model that Argentina had been using since 2003, when her husband Néstor first became president. Her reasons for linking Mr. Obama with one of the most notorious corporatists of the 20th century went like this: “The other day I heard the president of the most powerful country on earth say that, in technical and financial terms, the unions are not part of the problem, but rather, part of the solution, and that he wants large prosperous unions together with large, prosperous businesses.”

I have in the past warned of the similarities between Obama’s current populist politics and those of Argentina’s, past and present.

Some readers of this blog would assume the current disastrous economic conditions in the US preclude the re-election of the current president. In Argentina, however, Cristina’s re-election is nearly a sure thing,

Argentines will re-elect her and not without reason. Labor has always been the stronghold of Peronism and that loyalty continues. Local producers may dream of ridding themselves of “voluntary” price controls imposed by the government, but the depreciating currency has kept them competitive abroad, and they like their government subsidies. Farmers have been riding a boom in dollar-priced exports. Even the famous “piqueteros,” bands of left-wing activists who block roadways and paralyze cities to demand social justice, have a symbiotic relationship with this government: Satisfying their “moral outrage” requires greater government intervention, so they are a useful tool for Mrs. Kirchner. Think about that the next time someone tells you that Occupy Wall Street is a liability for Mr. Obama.

Protectionism, inflation, and unemployment won’t prevent anyone’s re-election. Just keep that in mind.

Michelle Obama borrowed three very nice bracelets for Monday’s DNC fundraiser in New York (h/t Silvio),

If you’ve been saving your nickels and dimes, the cuffs are available locally at Judith Ann Jewels. The First Lady wore Katie’s Lotus cuff priced at $15,000 with 2.9 carats of diamonds, her Gothic cuff at $15,350 with 2.17 carats in diamonds and the Quatrefoil bracelet at $11,800 with 1.73 carats in diamonds.

The news is making a stir, considering the recent rumblings of class warfare; even NYC’s own mayor Bloomberg was saying there’ll be rioting on the streets. However the First Lady chose bracelets designed by Houston-based Texas A&M graduate Katie Decker, who will probably be able to hire more people, as Texas leads the nation on job creation:

The Lone Star State added 84,900 jobs in the field of professional and business services between the midpoints of 2006 and 2011.

That’s the kind of stimulus I favor.

DIfferent stimulus in fashion news comes from Paris, where Argentina’s President Cristina Fernández was strongly supporting the hotel and shoe industries:

Cristina Fernández and her daughter stayed at the luxurious “George V Hotel” ($1,500-$12,500 a night) in Paris during an official visit to France ahead of flying to New York for the United Nations General Assembly today.

Those of us who follow these stories may recall that terrorist Yasser Arafat’s widow lived at the 5-star Georges V for many years.

But I digress.

Before her meetings with French president Nicolas Sarkozy and other French officials, Cristina had the “George V Hotel’s Personal Shoppers” bring her several purses and pairs of shoes which she tried on in the comfort of her suite.

In addition to Louis Vuitton bags, Hermès Birkin and Kelly bag purses, the Argentine president purchased 20 pairs of Christian Louboutin shoes, at approximately $5,500 a pair.

You must be in Paris to get those. Here in the USA us plebes have to settle for the cheap Louboutins at Saks’s shoe department, all with the sought-after red sole,

The pair above retails for US$895, and certainly would be most appropriate for UN conclaves, even when you ought to miss the Durban III part where Ahmadinejad and Mugabe beat up on Israel.

For the budget-minded, I must admit that I own a pair of red-soled shoes,

Sharp-looking, but didn’t cost anywhere near Louboutin’s.

Ironically, they were made in Argentina.

Linked by The Other McCain. Thanks!

Brazil is the fourth largest sovereign creditor of the US, holding more than $200 billion in Treasuries, which is good news for Brazil, since its economy has been growing enough that the country can do so:

Brazil, the region’s economic powerhouse, which just a decade ago had to come to Washington to ask the International Monetary Fund for a bailout, is now the United States’ fourth-biggest sovereign creditor — holding about $211 billion in U.S. Treasury securities, according to U.S. data from May.

As you may recall, a little over two years ago, Lula, then-president of Brazil, was lecturing President Obama about the dangers of protectionism and the benefits of free trade. Unfortunately Obama didn’t listen, and

These days, Latin America’s economy as a whole is expected to expand about 4.7 percent in 2011 — almost twice the expected rate in the United States — thanks to strong demand for the region’s commodities and a decade of mostly prudent fiscal management, itself the product of many hard-learned lessons of the past.

Hence, we have a chorus of clowns mocking the US economy,

“When did the American dream become a nightmare?” gloated Argentina’s President Cristina Fernandez, whose own country defaulted on about $100 billion in debt a decade ago.

In a speech at the Buenos Aires Stock Exchange on Monday, she contended that Argentina had prospered since then by focusing on exports and controlling financial speculation — a lesson that Washington has yet to learn, she said.

Cristinita forgot to mention that she raided private pensions a few years ago (2008) to avoid default.

Cristina’s soul mates Evo and Hugo are using the US debt for propaganda purposes,

Washington’s biggest critics in the region, such as Venezuela’s Hugo Chavez and Bolivia’s Evo Morales, have also portrayed the crisis as an inevitable outcome for a country that failed to follow its own financial advice and overextended itself militarily — in Latin America, and elsewhere.

whether – in spite of large oil reserves – the well runs dry in Venezuela,

yesterday, the Washington Post reported that Bolivian president Evo Morales had announced that a local program called “Bolivia changes, Evo delivers,” which “is under his control and has little legislative or administrative oversight,” would no longer depend on Venezuelan largess, but would be funded by the Bolivian government.

Here in the USA, Congressman Connie Mack, Chairman of the Western Hemisphere Subcommittee Connie Mack, has proposed legislation which would

cease aid to those countries which harm America’s freedom and security.

Mack’s five amendments would:

• Eliminate foreign aid funds for Argentina, Venezuela, Nicaragua, Ecuador, and Boliviia
• Cease U.S. contributions to the Organization of American States.
• Eliminate U.S. funding for Global Climate Change Initiative Activities.
• Establish a Congressional recorded vote which states “The delay in the authorization of the Presidential Permit is threatening the economic and national security benefits of the Keystone XL Pipeline.”
• Name Venezuela as a state sponsor of terrorism due to its continued material and financial support of the Revolutionary ArmedForces of Colombia (FARC), Hezbollah, the National Liberation Army (ELN), and the Iranian Revolutionary Guard Corps (IRGC).

Meanwhile, out-of-control government spending, onerous regulations on businesses, and uncertainty regarding the currently hostile environment on private enterprise does not bode well for the US economy – and that has the Hemisphere’s economies worried.

Cross-posted at Real Clear World

Welcome to the Carnival of Latin America and the Caribbean. This week’s top story: The ATF’s Fast and Furious disastrous scheme. Mary O’Grady writes,
A Drug-War Plan Goes Awry
Frustrated ATF agents testify that their bureau’s ‘Operation Fast and Furious’ let weapons get into the hands of Mexican drug cartels.

One of the frightening things about the U.S. government’s war on drugs is that it is being waged by federal bureaucracies. The legend of Elliot Ness notwithstanding, this implies that it is not only fraught with ineptitude but that before it is all over, there are going to be a lot of avoidable deaths.

Witness “Operation Fast and Furious,” a Bureau of Alcohol, Tobacco and Firearms plan that allegedly facilitated the flow of high-powered weapons into Mexico in the hope that it might lead to the take-down of a major cartel. It did not. But it may have fueled a spike in the murder rate and led to the death of U.S. Border Patrol agent Brian Terry.

Go read every word. More on this under the Mexico heading below.

ARGENTINA
Cristina Kirchner’s pathetic rant against Britain: Argentina’s president needs to back off over the Falklands

Corruption in Argentina
The mother of all scandals?
A once-revered human-rights group runs into a controversy

BOLIVIA
Bolivian soldiers expelled from Chile on Sunday after being arrested for illegally entering country

CHILE
Chile’s politics
How the mighty have fallen

CUBA
Castro dictatorship at war with husband-wife freedom fighters

Wife of “Antúnez” being denied medical care

Winds of Change in Cuba

ECUADOR
¿De qué nos preocupamos?

GUYANA
Security Fail… Illegal Immigrant With Stolen ID Discovered Working As Flight Attendant

HONDURAS
Free electricity

Secret cable shows Honduran president plans to take country on the path to Chavez-style socialism

Honduran Leader’s Secret Pact with Hugo Chávez

Zelaya’s Return to Honduras Darkens Honduran Democracy

MEXICO
Mapping the Dead from Mexico’s Drug War

ATF gunrunning update

WSJ: ATF Chief Likely To Be Ousted Over Gunwalker

Don’t make Melson a Fast and Furious scapegoat

PERU
Peru’s Humala turns to the right

PUERTO RICO
Llega con promesas, se va con los bolsillos llenos (fotos)

Obama’s Trip to Puerto Rico Has Its Risks

VENEZUELA

The National Guard at El Rodeo Prison

Venezuelan politics
Troubles on two fronts
The president will need to overcome his own health problems and a vigorous opposition to win re-election

Cuban agents working for Chavez regime illegally intercepting emails of Venezuelan exiles, diplomats, human rights groups

The week’s posts
Good luck with that, Italy
Fidel’s daughter favors “Dutch-style sex ed”
Rangel sells house in Dominican Republic; did he make the restitution?
Gunwalker: Will the Justice Department be held to account for arming lethal Mexican cartels?
Live feed to Obama’s PR visit

At Real Clear World,
Hugo Chavez Still in Cuba

At Pajamas Media,
Obama in Puerto Rico: How Will His ‘PR’ Stunt Play Out?
Expect a raucous welcome, but knowledgeable Puerto Rican voters in the U.S. know the island’s Republican governor has their economy recovering via his austerity measures.

I guess those suitcases full of money are worth it – Reuters/HuffPo has the story,
Hugo Chavez Wins Journalism Award In Argentina

Venezuelan President Hugo Chavez, who critics accuse of stifling press freedom, was given a prize by an Argentine journalism school on Tuesday for his contribution to “popular communication.”

Cristina Fernandez is actively working against Clarin, (related post and podcast here); Chavez’s attacks against Globovision are well documented. ABC News:

Chavez’s government forced the opposition RCTV channel off airwaves in 2007 by refusing to renew its broadcast license. The telecommunications agency then ordered cable companies to drop RCTV International last year for refusing to carry Chavez’s speeches and other mandatory programming. The government also cited licensing issues in forcing 32 radio stations and two small TV stations off the air.

The majority owner of Globovision, Venezuela’s only remaining anti-Chavez TV channel, fled the country rather than be jailed pending a conspiracy trial for keeping two-dozen new vehicles at one of his homes. Guillermo Zuloaga, who also owns several car dealerships, said Chavez ordered bogus charges.

Venezuela still has independent newspapers and web sites, including the newspaper El Nacional, which on Tuesday editorialized against the award.

“That a South American university doesn’t know about this grave situation and dares to honor this military leader with the Rodolfo Walsh Prize says much about the destruction of values that the Kirchners have imposed on the Argentine nation. Walsh was a victim of military repression and his example is now stained absurdly,” the paper wrote.

Hugo was given the award at La Plata University, where

He told a supportive crown of hundreds of students that Venezuela is promoting “a new dynamic of communication and popular information free from the media dictatorship of the bourgeois, and of the empire.”

Just like Pradva in the olden days.

UPDATE
Cristina praises Hugo for his support (in Spanish), saying Argentina wouldn’t be where it is now without his help. I kid you not.