Posts Tagged ‘Nicolas Maduro’

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.

Venezuela: Nothing to dance about

Saturday, September 27th, 2014

Nicolas Maduro was in NYC for the climate change summit and the UN General Assembly – ignoring protesters, but he also took the Mrs. dancing in the South Bronx, where he indulged on the congas,

Over in Venezuela, while the cat was away the mice had nothing to dance about:

The opposition are beginning to collect signatures to force a constitutional assembly and remove Maduro before the 2019 presidential elections.

Unions Confront Venezuelan Leader
Workers are increasingly striking to protest President Maduro’s Labor policies; ‘the state is the new big boss,’ complains one union leader.

The discontent has spread to unions representing hundreds of thousands of state workers. The National Federation of Public Sector Workers, which represents administrative workers and teachers, this month publicly criticized the government for delaying contract renewals. Some of them expired as long as 10 years ago, leaving workers with devalued salaries.

Venezuela’s Bolívar Currency Hits Record Low on Black Market
The plummeting Venezuelan currency breached a new, symbolic low of 100 bolívares per dollar on the black market Friday.

The central bank’s international reserves meanwhile are down 29% to $21 billion since the start of 2013.

Francisco Toro writes about The Routinization of Barbarism:

Secret public spending is fundamentally unacceptable. Public spending not approved by a legislature is by its nature unconstitutional. The routinization of secret public spending is an outrage no minimally law govern country would yield an inch to, even by implication.

Small wonder that The Economist refers to Venezuela as Probably the world’s worst-managed economy.


Venezuela: What do El Puma & Ricardo Hausmann have in common?

Tuesday, September 16th, 2014

What do a retired pop idol and a professor at Harvard’s Kennedy School of Government have in common?
Answer: Any criticism is met with public pillorying.

First instance: El Puma.

[Note: all the YouTubes are in Spanish]

Jaime Bayly interviewed last week singing star José Luís Rodríguez, best known as El Puma (link audio starts immediately) in his show last week. El Puma is Venezuelan and was very clear about Venezuela’s disastrous dictatorship,

It didn’t take long for Maduro to verbally pillory El Puma, saying that everybody will forget El Puma but all will remember Hugo Chavez,

Of course, Maduro may be correct, but for the wrong reasons.

Bayly talked about it last night, contrasting the joy El Puma brings his fans with the misery raining on Venezuela from chavismo,

Second instance: Ricardo Hausmann

Meet the Academic ‘Hitman’ Who Infuriates Venezuela’s President (emphasis added)

Ricardo Hausmann sounds like a scary guy. Last night, Venezuelan President Nicolás Maduro called him a “financial hitman” and “outlaw” who is part of a campaign “that has been initiated around the world against Venezuela.”

Who is this supposed international assassin? A bearded, 50-something professor at Harvard’s Kennedy School of Government who wrote a recent opinion piece saying Venezuela should default on its international debts. Traders in the bond market already consider this a possibility given the country’s financial straits, but Maduro seems to have taken it hard because Hausmann is himself Venezuelan and served as planning minister in 1992-93.

Maduro, like his late mentor and predecessor Hugo Chávez, presents himself as the champion of Venezuela’s poor. Hausmann attacked that image in his opinion piece by writing that many of the bonds on which Venezuela is paying interest “are held by well-connected wealthy Venezuelans,” while “severe shortages of life-saving drugs in Venezuela are the result of the government’s default on a $3.5 billion bill for pharmaceutical imports.” He said that the choice of Maduro’s government not to default “is a signal of its moral bankruptcy.”

That clearly did not go over well with Maduro, who instructed the attorney general and public prosecutor to take unspecified “actions” against Hausmann.

Here’s Maduro in his TV cadena, calling Hausmann a financial hit man,

Chavismo has turned Venezuela into a country where whores (not just the streetwalkers) cash in as currency traders. Hausmann’s assertions shouldn’t come as a surprise.

UPDATE:
You wouldn’t know it from looking at Maduro, but there’s a shortage of boobs in Venezuela.

Aruba: El Pollo flew the coop

Monday, July 28th, 2014

Well, that didn’t take long!

Hugo Carvajal, a.k.a. “El Pollo” (the chicken), the Venezuelan consul candidate accused of providing weapons to the FARC, working with Iranian intelligence, and who’s under investigation for his role on the attacks to the Colombian consulate and the Jewish center in Caracas, was released by Aruban authorities, after Holland decided he did qualify for diplomatic immunity but declared him person non-grata.

This is yet another instance where America is perceived as weak, since

The arrest was based on a formal request from the United States. [Aruba’s chief prosecutor Peter] Blanken said Aruba was “obliged to cooperate” because of a treaty with the United States.

Carvajal immediately flew back to Caracas, in time to attend the PSUV congress and walk into Nicolas Maduro’s arms:

Daniel Duquenal:

The thing is that the swift, I repeat the word, retrieval of Carvajal means that not only the army has acted but also the drug traffickers, and all the thugs that could be affected

Raúl Stolk, in a post titled Chicken Run,

This, of course, raises a bunch of questions:

  • Has the US anything to say? What about the request for extradition?
  • Jose Ignacio Hernandez explained at Prodavinci that immunity alone would not suffice to protect Carvajal if the reason for his detention was not related to his functions as head of the Venezuelan Consulate in Aruba. Then, why would the Dutch just go with Venezuela’s lame arguments to release the man?
  • Does everybody fear Diosdado? (Damn!)
  • Is dealing drugs ok now?

Miguel Octavio has a lot more questions:

-Why did Maduro want to name Carvajal as Consul to Aruba specifically? Is it related to the island being an offshore financial center?

-Why would a legal resident of the US, lend or lease his US company’s jet to someone in the US drug kingpin list in the Patriot’s Act era?

Juan Cristobal Nagel asks, Is there a link between Petrocaribe and Carvajal?

The Caribbean economies are mighty fragile. The last thing the US, the Netherlands, and other colonial powers need … is for Maduro’s instability to spill over into the islands.

Interesting question, but I think Nagel may overestimate U.S. influence on this issue.

UPDATE:
More from Venezuela-Europa:

So: the man in charge of the foreign relations for the  Kingdom of the Netherlands took the decision to liberate a man who

  1. came in with a false passport,
  2. had over $20000 with him and had not declared that money
  3. had not received the placet to become a consul,
  4. was accused by the US of having tortured and murdered two Colombian officials, of having helped a terrorist organisation and being responsible for cocaine trafficking.

Why?

To keep the caged bird from singing?

Smart diplomacy!:

A senior U.S. official said the U.S. had been blindsided by the Dutch

Venezuela: US to sanction chavistas

Thursday, May 29th, 2014

U.S. House Passes Bill To Penalize Venezuela
Move Ratchets Up Pressure on President Nicolás Maduro’s Beleaguered Government.

The U.S. House of Representatives overwhelmingly passed a bill Wednesday to penalize Venezuelan government officials found to violate human rights in that country’s crackdown on a protest movement, ratcheting up pressure on President Nicolás Maduro’s beleaguered government.

The bill calls for President Barack Obama to draw up a list of Venezuelan officials who are alleged to have violated human rights, freeze any assets they might have in the U.S., and bar them from entering the country by either withdrawing or denying visas.

A similar bill has been approved by a Senate committee, and is headed for a vote on the Senate floor in coming days.

Passage of the bill also raises pressure on the Obama administration, which has been wary of passing any kind of sanctions for fear it could create a backlash by allowing Mr. Maduro to mobilize supporters against the U.S. and distract from Venezuela’s growing homemade troubles. The administration also fears that the sanctions could jeopardize attempts at reaching a negotiated solution between the government and the opposition.

What negotiated solution? The o-called “negotiations” fell apart already.

14 Dems opposed the sanctions:The

Democrats led by Michigan Rep. John Conyers wrote a letter to President Barack Obama on Tuesday backing his administration. They also urged an exchange of ambassadors with Venezuela after a four-year hiatus.

Does this sound like a government willing to exchange ambassadors?

Venezuela alleged on Wednesday that the U.S. ambassador to Colombia has plotted to destabilize President Nicolas Maduro’s rule, adding to tensions between the two countries as the U.S. House approved a measure calling for sanctions on officials in the South American nation over human rights abuses.

A couple of days earlier, Mind your own business, Venezuela foreign minister tells Kerry.

In Caracas, Venezuelan President Nicolas Maduro welcomed the Democratic lawmakers’ initiative, saying he hopes “there is a bit of wisdom” in Washington. This wisdom from the guy who talks to a bird he thinks is Hugo CHavez.

Never mind, the Russian Foreign Minister says all problems should be solved on the constitutional basis, without threats of sanctions. In theory, they should; in reality . . .

Yleem D.S. Poblete posits that, in addition to the human rights violations,

For the sake of U.S. national security interests, the United States needs to act swiftly and resolutely to hold the Chavez-Maduro apparatus accountable.

The bill is now headed for a vote on the Senate floor.

Silvio Canto and I talked about this and other LatAm topics in last night’s podcast:
Elections in Colombia PLUS other US-Latin America stories of the week

Venezuela: Leopoldo Lopez’s jail birthday

Thursday, May 1st, 2014

Opposition leader Leopoldo López turned 43 years old on Tuesday. He’s still in solitary confinement without a trial and his wife was told that he is not allowed visitors for the next 15 days at Ramo Verde military prison. His attorney considers him a political prisoner.

Emiliana Duarte describes,

His cell, where he spends 22 hours a day, is a minuscule 9 square meter space containing a bed and a sink. Ever since he was jailed, López has been kept in a maximum security area known to prison wardens as “the annex, ” on the second floor of the building. When he was first interned in his cell, “the annex” seemed to have suffered a small fire: the walls were covered in soot, the lamps were melted, and there was very little light. His legal team says some maintenance has been performed since then to improve at least that aspect.

When Leopoldo was sent to the annex, the authorities at Ramo Verde immediately set about increasing security there. A series of fences were added between each stairwell, as well as several additional cells, since assigned to mayors Enzo Scarano and Daniel Ceballos, as well as San Diego municipal police chief Salvatore Lucchese.

Leopoldo remains in solitary confinement with no end in sight. He can only receive visits from close family members and his lawyers. Access has been denied to his priest for confession, and he has not been allowed to attend mass. It’s worth noting that the Committee Against Torture, the European Court of Human Rights, and the Inter-American Court of Human Rights have made it clear that solitary confinement should be an exceptional measure of limited duration that is subject to strict judicial review when applied and prolonged.

Leopoldo’s legal team has had repeated problems with correspondence, since he is forbidden from sending written messages to the outside. All letters sent to him are extensively scrutinized and in several instances, have been retained altogether.

His legal team has also had problems with legal documents, which are also subject to extensive review by the prison guard, an issue which violates client-attorney privilege and professional standards of privacy. These revisions have been carried out to such an extent that sometimes legal council has been strip searched on their way out of meetings with their client, in order to make sure that no information is being leaked.

The prison authorities restrict access to any material deemed “politically sensitive.” He may not receive books, flyers and other documents that may be considered forms of political proselytism [sic].

Journalist Ludmila Vinogradoff for Spanish newspaper ABC reports that she and a photographer, along with Lopez’s were detained for three hours and López is now denied visitors for two weeks as punishment for the journalists’ visit.

So, has Leopoldo Lopez self sacrifice been worth something?

Of course the regime want Lopez, and many other, to rot forever in jail, or dead if they could get away with it. The main reason for that hatred with Lopez is that represents all that they are not, educated individuals, rational, sensible, not seeking revenge for real or imaginary hurts, even good looking. That in addition he made it clear to the world that the regime is a dictatorship managed by thugs is, of course, unforgivable.

What is more troubling is that some in the opposition are not running over each other to make a grand stand and demand Lopez freedom or else. This, in a way, is harder to forgive. But the reason is also simple to understand: the revolt that Lopez represents is the one from a group of Venezuelans who think that they have no future, nothing to lose anymore. But inside the MUD there are people that have something to lose, little perhaps, but something nevertheless. As such people like Ramos Allup, leader of the fading AD old party, are ready to do anything to lower social tensions. Not because it is good to lower social tensions, something we can almost all of of us agree on, but because social tensions are bad for him since he will never lead them.

The opposition is dealing with Venezuela’s Security Forces: A Killer Elite Beyond the Law
As violent protests return, the death toll is down, but families are struggling hopelessly to find justice for their loved ones killed in demonstrations earlier this year.

At the height of the protests an engineer was beaten to death by National Guard troops on the road to a hospital. A crazy firefight started by a bodyguard of the “peace” minister ended with a bullet in a student’s head. A 20-year-old cook was detained for threatening national security, but no proofs whatsoever were presented in court. Four guys were tortured with electricity applied to their testicles. In one jail where people were detained illegally the wakeup call was made with teargas bombs.

The human rights abuses in the increasingly despotic dictatorship continue as Protesters Point to Their Scars.

In CNN interview, Bolivarian National Guard Captain calls on Cuba-backed dictatorship to step down

Maduro’s trying to lock up internet access but a New online project seeks to leverage social media in coverage of Venezuelan crisis

Venezuela Decoded gathers information found on Twitter, groups it by source (either from government or opposition sources) and separates them by language (Spanish and English). It also features a timeline created with the online tool Timeline JS that shows the most important events of each day.

You can find the timeline here.

Elsewhere in the country, the agricultural industry’s dying: Chavez’s Farming Utopia Withers as Pet Projects Abandoned, which is hardly surprising, considering their origin,

Chavez’s plans for agricultural communes began with a visit to Belarus in 2007, when his counterpart Aleksandr Lukashenko took him on a tour of projects dating from the Soviet Union’s 1930s collectivization, said Perez, who now advises the president of Venezuela’s state agriculture fund.

Capital flight in Venezuela 103% of GDP as Venezuelans have syphoned $405.8 billion away from the country.

Maduro’s latest populist ploy for fixing systemic economic woes: Raising the minimum wage.

In the past few weeks particularly the regime has been trying to tamp down on the unrest, and last week, the country’s Supreme Court imposed new regulations limiting citizens’ right to protest with some trumped-up permitting process

Critics say that while the new minimum salary amounts to $675 at the government-set exchange rate, it adds up to little over $67 at the black market rate.

Related: El plan detrás del caos en Venezuela


Venezuela: Inspired by Marx!

Thursday, April 17th, 2014

Marxist Nicolas Maduro’s making a fashion statement inspired by Marx.

Groucho Marx, that is:

Nicolás Maduro introduced the new symbol of the revolution: The mustache cap.
The Venezuelan president surprised all during at event by showing the new icon of chavismo, by which all his followers can have his mustache.

Nicolás Maduro presentó el nuevo símbolo de la revolución: la “gorra del bigote”
El presidente venezolano sorprendió en un acto al mostrar un nuevo dispositivo del chavismo, gracias al cual sus seguidores pueden tener su bigote

The cap has a detachable mustache you can place under your nose.

I’m not making this up,

Maduro wore a blue one, but it’s also available in red or green.

Just in time for Mother’s Day!

Linked to by Babalu. Thank you!

Venezuela: No amnesty for jailed opposition

Wednesday, April 16th, 2014

Certainly not a khaki scout.

Venezuela rejects amnesty for jailed protest leaders

The Venezuelan government has dismissed calls by the opposition for an amnesty for jailed protest leaders.

Government and opposition representatives met for a second time on Tuesday to try to put an end to two months of anti-government protests.

Following the meeting, Ramon Aveledo of the opposition MUD coalition said his proposal for an amnesty law had been rejected.

It’s all par for the course: Having put the Cubans in charge of Venezuela’s public notaries and civil registries, and of the computer systems of the presidency, ministries, social programs, police and security services as well as the national oil company,

Chávez’s successor, Nicolás Maduro, has deepened Caracas’s dependency on Havana even further. As students have taken to the streets in protest against an increasingly authoritarian regime the government has responded with a brutal repression that relies on many of the tools and tactics perfected by the police state that has run Cuba for too long.

Among those who would be denied amnesty are 30 military officials arrested for conspiracy to topple Cuba-controlled dictatorship

Among those arrested are the brothers Riviera Lago, one a colonel and the other a lieutenant colonel. Also two members of the National Guard, two from the navy, and one from the army. These are added to the generals arrested three weeks earlier, Oswaldo Hernandez Sanchez, Jose Machillanda Diaz, and Carlos Millan Yaguaracuto. The generals are all from the air force, like the majority of those involved in the alleged conspiracy.

Up to now, there have been very few military showing support for the protesters.

Other Venezuela items:
[T]he supply of currency in the economy [has] dried up almost completely.

Venezuela’s delusional leader

Media Ignore How Maduro’s Death Squads Operate with Impunity Thanks to Gun Control