Posts Tagged ‘Nicolas Maduro’

Venezuela: News from Poyais

Thursday, April 16th, 2015

Miguel Octavio tells us the story of Gregor MacGregor, creator of the country of Poyais, in From Poyais To Andorra: A Tradition Of Venezuelan Fraud

Good thing Lord Crawley wasn’t born yet.

In other Venezuelan news,
Venezuela to announce “political and economic” measures against Spain
Diplomatic spat grows over Spanish lawmakers’ call to release Caracas opposition leaders

The tit-for-tat dispute ignited after the Spanish Congress passed a non-binding resolution calling for the immediate release of jailed Venezuelan opposition leaders, including Leopoldo López and Caracas Mayor Antonio Ledezma, who are being held in a military prison outside the capital.

“The [Spanish parliament] should go and voice their opinions about their own mothers, but they should not be giving opinions about Venezuela,” Maduro said in response on Tuesday night. He also accused Rajoy of maneuvering with others to oust his government.

Stay classy, Maduro.

Venezuela: Get ready for $10 oil?

Thursday, February 19th, 2015

Gary Shilling at Bloomberg is saying, Get ready for $10 oil It has to do with the marginal cost of production,

or the additional costs after the wells are drilled and the pipes are laid. Another way to think of it: It’s the price at which cash flow for an additional barrel falls to zero.

Last month, Wood Mackenzie, an energy research organization, found that of 2,222 oil fields surveyed worldwide, only 1.6 percent would have negative cash flow at $40 a barrel. That suggests there won’t be a lot of chickening out at $40. Keep in mind that the marginal cost for efficient U.S. shale-oil producers is about $10 to $20 a barrel in the Permian Basin in Texas and about the same for oil produced in the Persian Gulf.

Also consider the conundrum financially troubled countries such as Russia and Venezuela find themselves in: They desperately need the revenue from oil exports to service foreign debts and fund imports. Yet, the lower the price, the more oil they need to produce and export to earn the same number of dollars, the currency used to price and trade oil.

With the drop in prices,

Among the hardest hit are those nations that rely on oil for much of their government revenue and were in financial trouble before prices plunged. Venezuela along with its state-run oil company issued more debt than any developing country between 2007 and 2011. Venezuela has been downgraded to the bottom of the junk pile — CCC by Fitch — and credit-default swaps on Venezuelan debt recently indicated a 61 percent chance of default in the next year and 90 percent in the next five years. The nosedive in oil prices also is devastating African exporters Ghana, Angola and Nigeria, where oil finances 70 percent of the government’s budget.

How Bad Is Venezuela’s Economic Chaos? Bad enough that

Maduro has yet to fully account for how his government will meet its $10.3 billion debt obligations in 2015. A March 16 payment totally $1.1 billion is fast approaching and Venezuela’s economy is languishing.

I am not optimistic at all; even if Maduro goes, the country can remain under a dictatorship, just as Cuba has, for decades to follow.

And, by the way, even when the minimum monthly wage of 5,600 bolivars ($32 on a new exchange market created last week) is close to useless, the late dictator Hugo Chavez managed to sock away US$12 billion in his HSBC account.

So, all of you who preach that “Chavez immensely decreased inequality” in Venezuela can take that, spread it, and eat it on a cracker.

Venezuela: Turned away at the prison gates

Tuesday, January 27th, 2015

The Venezuelan government has turned down a request by former presidents of Chile and Colombia to visit opposition leader Leopoldo Lopez in jail (h/t HACER). Mexico’s former president Felipe Calderón would also been turned away, creating An impossible to avert PR mess for Maduro

Piñera and Pastrana have now a first hand account, a direct witness position on repression in Venezuela. They saw the Nazional Guards everywhere, they were both somewhat threatened by diverse hecklers and possibly by “security”, they experienced personally the harshness and autism of the regime, etc, etc.

@AndresPastrana_ and @sebastianpinera enter Ramo Verde to meet with @leopoldolopez

Maduro then doubled down and accused Piñera and Pastrana of enriching themselves from drug money (as if Piñera needed the money). This is particularly offensive to Pastrana, who was held prisoner by Pablo Escobar 27 years ago.

Pastrana, on his part, scored a dig or two on Maduro, referring to him as “my fellow countryman”, since Maduro may have been born in Colombia – which would disqualify Maduro from being president of Venezuela (video in Spanish),

Pastrana points out that he and Piñera went to the Ramo Verde jail on the regular visiting day, when no permits are required to see the inmates.

Just another day in the Communist Bolivarian Revolution.



Venezuela: Qatar gives a band-aid

Wednesday, January 14th, 2015

No specifics, though:
Qatar Helps Venezuela Weather Oil Crisis
Venezuela Will Receive ‘Several Billion Dollars’ in Financing From Qatari banks, President Nicolás Maduro said, as Opposition Members Criticized the Leader’s Economic Stewardship.

“They’re giving us enough oxygen to cover the fall in crude prices,” he said in remarks carried on Venezuelan state television.

An untold amount, in an untold date, by unnamed banks.

Sounds like a deal!

Meanwhile, Venezuelan authorities are doing what they do best:
Over 1.5 Million Diapers Seized from Venezuela Warehouse

A government raid on a warehouse in western Venezuela has resulted in the confiscation of more than 1.5 million diapers along with over 360 tons of detergent and thousands of pounds of food which were being illegally hoarded.

Venezuelan Vice President Jorge Arreaza said on state television Monday that during the raid, 1,523,776 diapers, 360 tons of detergent powder, as well as conditioners, razors and towels, were found.

In the warehouse, situated in Zulia province, there were also 15,000 units with thousands of liters (gallons) of infant milk substitute, 17,076 kilograms (37,646 pounds) of beans, 11,176 liters (2,952 gallons) of milk, 40,250 kilograms (88,736 pounds) of maize flour and 30,000 kilograms (66,139 pounds) of rice, Arreaza said.

They also found sanitary napkins, shampoos of different brands, soap powder, toothpastes, batteries, napkins, food supplements, milk powder, salsas and pet food.

No band-aids there.

And people who photograph the long lines and empty shelves are sent to jail.

Juan Cristobal Nagel posted videos of folks Overcoming capitalist savagery at Farmatodo Bella Vista:

Venezuela: Maduro does/doesn’t get $20billion UPDATED

Thursday, January 8th, 2015

After Russia, Venezuelan dictator Nicolas Maduro headed to China in his search for funds. He wore a suit:

He didn’t get what he was after:

When Nicolas mentioned US$ 20 billion, the Chinese smiled. An unscrutable [sic] smile at that. US$ 20 billion, they said, we would not pay that for all of Mongolia, said one of the Chinese. Nicolas argued back saying Sidor alone was worth US$ 10 billion, to what Ling Pin answered: “Chavez paid US$ 1.97 billion for it when it was functioning and eporting [sic]”. As we went out Maduro asked me what that was about and I said: “I did not know that”

Devil’s Excrement has the unofficial Road Trip or The Fantastic Voyage tale.

Bloomberg has the serious take:
Maduro Says Venezuela Gets $20 Billion New China Investment.

Let that heading sink in: Maduro says.

Moving right along (emphasis added),

The impact of the announcement will depend on how much of the $20 billion will be a cash transfer instead of long-term contracts for Chinese goods and labor, Eurasia Group analyst Risa Grais-Targow said in an e-mailed report.

“The funds do not necessarily represent freely available cash that the government can use for imports or to make debt payments,” Grais-Targow said.

Venezuela owes China over $45 billion in loans over the past decade, mostly in return for oil supplies, including a $4 billion loan in July. [Note: In Wednesday’s podcast, I said that Venezuela owes China over $50 billion, not including the July 2014 $4b. I stand corrected.]

Things are bad enough that

Foreign companies working to develop some of Venezuela’s most prized oilfields are asking to be compensated with crude as a way to recover hundreds of millions of dollars in unpaid cash owed to them

which, by the way, also avoids the foreign currency control mess.

But wait!

Maduro’s not the only guy looking to China for a handout:
Correa Heads to China for Financial Lifeline
Ecuadorian President Secures US$7.5 Billion Loans to Plug Oil Shortfall

Correa has already netted loans worth US$7.5 billion and signed nine bilateral cooperation agreements with his Chinese counterpart, Xi Jinping.

China Boosts Support for Latin Leftists
China Pledged Billions of Dollars of Financing to Venezuela and Ecuador, Two South American Energy Exporters Battered by Falling Oil Prices

Experts said it was unclear without further details what kind of impact the new financing would have on the Venezuelan and Ecuadorian economies.

Next thing you know, Nic & Rafa may have to start building canals.

UPDATE:
The planned investment is weird stuff

Venezuela: Maduro wants a Puerto Rican out jail

Tuesday, January 6th, 2015

. . . who didn’t want to be pardoned.

Taking a cue from the U.S.-Cuba sweet deal (sweet for Cuba, that is), Venezuelan dictator Nicolás Maduro wants to make a deal:
Venezuela’s Maduro would free Lopez if U.S. freed Puerto Rican

Venezuelan President Nicolas Maduro said on Sunday he would only seek the release of jailed opposition leader Leopoldo Lopez if the United States agreed to release a Puerto Rican nationalist currently held in a U.S. prison.

The man in question, Oscar Lopez Rivera, is serving

70 years for seditious conspiracy and a variety of weapons charges as well as the second thwarted escape attempt (which included plans for the use of violence)

in Leavenworth, and,

he is a dangerous terrorist as well as a sociopath, and has never been known to express any regret or remorse. He was a co-founder of a deadly terrorist group, who constructed bombs (their weapon of choice) and trained others in both how to build them and how to use them. He twice attempted to escape from prison, and the latter attempt included plans of violence and murder.

Lopez-Rivera was offered clemency by Bill Clinton in August of 1999 (in a move that was engineered by then Deputy Attorney General Eric Holder) but refused to show remorse.

So, not only is Maduro meddling into Puerto Rican politics again – where he clearly is not wanted, he’s offering to exchange Leopoldo Lopez, an innocent man, for a sociopath terrorist:

“The only way I would use (presidential) powers would be to put (Leopoldo Lopez) on a plane, so he can go to the United States and stay there, and they would give me Oscar Lopez Rivera – man for man,” Maduro said during a televised broadcast.

After his offer, Maduro headed overseas – in a Cuban jet – in search of money, since at home the shelves are empty and oil hit $50/barrel as of the writing of this post.

He bundled up for the occasion:

First Russia, where Putin couldn’t fit him in his schedule. After that, China, where he has a date with

Chinese President Xi Jinping during his visit and take part in a meeting between China and the Community of Latin American and Caribbean States Jan. 8-9 in Beijing.

Busy, busy.

UPDATE:
Regarding China, read today’s post by David Goldman.

China will be more active in Latin America.



Venezuela: Biden asks for release of political prisoners

Saturday, January 3rd, 2015

Joe Biden was attending Dilma’s inauguration, and he made sure to run into Maduro?
Biden urged Venezuelan to free political prisoners, U.S. says

No, it was Maduro’s people who wanted to approach Joe:

One of Maduro’s aides initiated the contact, approaching the U.S. delegation during the reception that followed the swearing-in of President Dilma Rousseff for a second term.

Maduro told Biden that Venezuela wants “a better relationship with the United States” and the vice president assured him President Barack Obama’s administration was also interested in improving ties.

Biden told Maduro that the most important thing Venezuela needs to do to lay the basis for better relations is to release political prisoners, the U.S. official said.

Of course, by now Maduro knows all he needs to do in these days of smart diplomacy is to take an American hostage, hold him/her for a few years, have the Vatican intervene, and things will go his way no matter what.



Venezuela: Default by September 2015?

Thursday, December 11th, 2014

Casey Breznick posts,

A CNBC report on the prospect of a Venezuelan default cited a Capital Economics report stating that a default could be expected by next September or October when $5 billion in debt payments come due. Only an upswing of oil prices to somewhere around $121/barrel would allow Venezuela to balance its budget, according to some estimates. But with OPEC recently slashing its 2015 production levels to a 12-year low in response to decreasing estimated global oil demand and increasing supply via U.S. shale production, a significant oil price increase in the short-term seems highly unlikely. Bloomberg reports that the implied probability of default—derived from complex financial formulas—in the next five years stands at 93%, the highest in the world.

The Devil’s Excrement looks at Maduro’s New Script,

You may laugh all you want at what he says, but I don’t. He is making a very specific narrative out of all this and I am not sure where it is heading. It may be that he just wants to blame  the US for the intensification of the crisis in the next few months or simply, that he is preparing the ground in case there is no money to pay international investors. There is a one billion Euro payment in March, which looks doable, but there are much larger maturities in October 2015. But investors have so far believed that Venezuela had a “willingness” to pay, and the action in the markets today indicated some people were losing faith.

It did not help that Bloomberg reported today on a meeting with investors at a New York law firm, which actually took place like ten days ago. This meeting actually ended in a somewhat positive note, as many suggested that Venezuela and PDVSA could not get away with a restructuring below current prices for most bonds, as the oil cash flow would not justify it.

Francisco Toro:

It’s not the gobs of debt monetization, the billions of make-believe-bolivars the Central Bank loans PDVSA leading to an uncontrolled monetary expansion and the collapse of demand for real money balances.

It’s not the opacity in public accounts, the drop in reserves, the commercial default, the implosion in the goods markets, or the fact that you need your kid’s birth certificate to buy her diapers.

It’s not the fiscal deficit at 17% of GDP, or oil at $58 per barrel, or the tapped-out Fonden “sovereign wealth fund,” or the fact that the Finance Minister gives every possible public sign that he’s an idiot.

It’s not that the one regime official who announced a semi-reasonable reform that might have stanched the flow got shifted sideways to a non-economic job.

It’s not the Central Bank’s scandalous subservience to the Executive branch, or the fact that it won’t even dare publish basic inflation statistics.

It’s not that PDVSA has missed every production increase target it’s set for itself since 2003, it’s not that its refineries are badly maintained and barely functional, much less profitable.

It’s not that labour laws make it insane for a worker to waste his time working, and unreasonable as well as that is time he needs to spend queueing for basic consumption goods.

It’s not that the investment climate has been so shitty for so long, and the profit repatriation picture so bleak, no one sane even considers putting money into Venezuela.

Nope. It’s none of that. According to Maduro, it’s all a conspiracy, led by some flunkie sitting at a cubicle at Moody’s, someone who for some weird reason has decided to mess with his revolution. That’s why it’s expensive for Venezuela to borrow.

PDVSA 2022 bond in the last three months. It was losing 14% of its value today, with a yield to maturity of 31.4%:



Venezuela: New deal with China

Tuesday, November 25th, 2014

High hopes, we’ve got high hopes . . .

The Chinese pull the chestnuts (temporarily) off the fire:
China Loosens Debt Terms for Venezuela
With Default Threatening the Economy as Oil Prices Tumble, Caracas Gets a Lifeline From Its Biggest Creditor

Not only for Venezuela, but also for Argentina (emphasis added),

Last week the president [Maduro] used a $4 billion Chinese credit, traditionally earmarked by the Chinese government for infrastructure projects and held in off-budget funds, to increase reserves to $23.2 billion. China also recently lent $1.3 billion to help Argentina buoy falling reserves, giving President Cristina Kirchner , a close ally of Mr. Maduro, a cushion to help alleviate that country’s cash crunch.

Beijing’s largess may appear irrational given economic policies in Venezuela and Argentina that do not appear sustainable, said Barbara Kotschwar, a scholar who tracks Chinese investment in Latin America at the Peterson Institute for International Economics in Washington.

“On the other hand,” Ms. Kotschwar said, “they are so invested in Venezuela’s oil industry that they may have calculated that a political crisis would have a negative impact on their return on investment or on Venezuela’s repayment of loans.”

That’s putting it mildly; according to Maduro himself,

Venezuela’s oil revenues, which account for 96% of the country’s dollar income, are down by 35% in the past month

China has risked millions of dollars in Latin America to secure their supply lines, and as analyst Russ Dallen, managing partner at brokerage Caracas Capital Markets, put it, “for the short term, they’re secure.” However, considering that

China last month scrapped the requirement that Venezuela ship at least 330,000 barrels of oil a day as payment for its existing loans

the meaning of “secure” may be more fluid than we believe – and not only for the short term.



Venezuela: $15 smugglers jailed, $3.08 billion a year smugglers go free

Tuesday, November 4th, 2014


Los miserables

Colombians Jailed in Venezuela for $15 Grocery Run

A $15 grocery run has cost two single mothers from Colombia 48 days in jail, along with the threat of a 14-year prison sentence, as a result of a crackdown on smuggling in Venezuela that is ratcheting up tensions and highlighting growing economic distortions between the neighbors.

Jenifer Rojas and Belsy Alvarez were arrested in early September by Venezuela’s national guard walking out of a supermarket in the western city of San Cristobal with bags of rice, pasta, mayonnaise and other staples whose prices are capped in Venezuela and whose sale is restricted to the country’s residents.

Right now they’re out on parole, along with the cashier, who also was arrested.

Back in September crossing the border with foodstuffs may have been profitable, but now, goods are bad,

My first shock was the grocery store when I went to refurbish my refrigerator. The prices went noticeably up in one month for the stuff I buy. There was no imported goods. Of course, among the goods available there is all sorts of imported stuff re-processed in Venezuela. After all we are importing now at the very least 60% of our food (estimates vary, I am giving you the bottom line). What I mean is that you could still find an occasional treat, like some average Italian pasta, or an overpriced jar of raspberry jam. This is now all gone. And it has not been replaced, even by sub-par Venezuelan production.

The real dough is in oil smuggling,

Caracas-based economist Asdrubal Oliveros recently estimated 130,000 barrels of gasoline are now smuggled across the border to Colombia each and every day.

That’s a big number. How big?

Well, assuming our men in uniform are bad at business and only make $65 per barrel sold (they’re wholesalers, after all), that would work out $8.5 million dollarsevery day, $253.5 million dollars a month, $3.08 billion a year.

You could make three thousand milicos millionaires for that kind of money, and still have spare change to cut another 843 of them $100,000 gifts. (Note: the government believes the amount is about $2.2 billion per year)

In some ways, the headline figure is actually quite small. It’s only a fifth of the $14-15 billion a year in foregone sales from subsidizing gasoline in the first place, andmuch less than the $25 billion a year we would be earning from extra oil produced in the Orinoco Belt if Chávez hadn’t muscled out our foreign partners in 2005-2006 and production had risen according to what was then the schedule, but hasn’t cuz, y’know, he did.

Don’t wonder, then, why there is no military coup in Venezuela. All that money is going somewhere.

Meanwhile, Maduro raised the minimum wage by 15%, i.e., the $776 lie

Nicolás Maduro raised the minimum wage by 15% last night, starting December 1st.

Quickly, government news agencies began spewing the lie – there really is no other way to characterize it – that this was the highest minimum wage in Latin America, equivalent to US$ 776. The rub lies in the fact that this conversion is calculated using the official-yet-impossible-to-find exchange rate of BsF 6.3 per dollar – if you were to use the market exchange rate of BsF 102 per dollar, you get a minimum (and I mean really minimum) wage of US$ 48 per month.

He’s also aligning himself with the hardcore Marxists

That’s going to work as all Marxism has so far.

Report on 100% food inflation in Venezuela,

Parting question,
Could Low Oil Prices End Venezuela’s Revolution? The answer to that question may depend on the outcome of Saudi Arabia’s Oil Minister Ali al-Naimi trip this week to Venezuela.