The Devil’s Excrement

(Este post se encuentra en Español aqui)

Typically a politician begins his career within a party or a political organization or office and climbs up. But seldom does a politician rise, least of all in Venezuela, then drop and then manage to rise even higher than he had ever managed to get before. This is the curious case of Antonio Ledezma. As times has gone by, not only did he manage to strike a tremendous and disciplined victory and campaign versus Chavez’ machinery  and simpatico pro-Chavez candidate Aristobulo Isturiz, but his public image continues to rise, not only above where he has ever been, but even more surprisingly above any leader of the current Venezuelan opposition.

Ever since his election last November as Mayor of the Metropolitan area of Caracas, Ledezma has become the most consistent and persistent political leader of the heterogenous opposition. He has obviously been helped by the way Hugo Chavez stripped him of most of his duties, responsabilities and funding. This whole affair has been so outrageous and undemocratic, that everyone can see that the votes of the people of Caracas were stolen by Chávez after the fact.

But even more important, Ledezma has compensated his lack of charisma with his energetic approach. Last Christmas it seemed as if only Chavez and Ledezma did not go away for the holidays and Ledezma has fought since then the immoral war against him with dignity and remarkable poise.

What Ledezma has done is to go back to the style that helped him rise as a student leader of Accion Democratica, tiredlessly working day after day. An attitude he brought to his campaign that led him to be Mayor of the Libertador District, a position for which he was reelected to in 1998, but his term was shortened by the Constitutional reform of 2000. And maybe, just maybe, it is only a personal perception that Ledezma lacks charisma, he has beaten Aristobulo Isturiz twice and last November, he managed to beat an Isturiz backed by the overwhelming Chavista machinery and funding. That’s more than most opposition politicians past and present can claim to have achieved.

And taking a move out of Chavez’ playbook, it is now Ledezma that walks around carrying the little blue book containing the 2000 Bolivarian Constitution as in the picture above, a symbol and gesture that Chavez seems to have forgotten or realizes would be a little bit of a farse since he tramples his once ” best Constitution of the world” almost daily.

And in the middle of the Honduran crisis, which is actually boring to most Venezuelans, Ledezma decides to go on a hunger strike at the OAS Headquarters in Caracas, demanding the attention of the OAS and asking its Secretary General Insulza, that he ask all countries to respect the OAS Democratic Charter and not apply selectively as has been done in the last few years.

And as the Government of Venezuela was trying to get the OAS to agree to have  Ledezma removed, Insulza, who seems to have lost what little credibility he had left as Secretary General of the OAS, had no other recourse to accept those of Ledezma’s demands he could act on, while the Venezuelan Government quickly paid the money due to Ledezma’s office the day before the strike.

And while Chavez barked and threatened on Honduras, but got little done so far, Ledezma grabbed the spotlight (in all but the Government’s media) with his hunger strike, supported by the workers from the Caracas City Hall and the constant stream (and crowd!) of visitors to the OAS. (Even if most opposition politicians failed to even show their face)

And he quit the hunger strike and left today stronger than any opposition politician. He was the center of attention and now he will be received at the OAS (Joined by all opposition Governors, a Ledezma proposal) to formally present the numerous violations of the Venezuelan Constitution and the Democratic charter by the Government of Hugo Chavez.

It is indeed a curious case, how Antonio Ledezma has reinvented himself by going back to his youth, managing to come out of nowhere to suddenly become the most relevant opposition politician. Whether this speaks badly of the opposition is not the point. The point is that Ledezma seems to have more political intuition and desire than those that claim to lead opposition parties, without ever having received the same approval of the voters that Ledezma actually has.

(Este post se encuentra en Español aqui)

(I condemn the boycott of Cuba…Hello, Honduras does not want to obey us? Let’s boycott Honduras!)

I have been trying to understand the ideological consistency of Chavista actions and policies.

Case 1: Chavismo rejects and despises the economic boycott against Cuba.

Chavez announces that it will cut off Petrocaribe’s oil supply to Honduras until Zelaya returns to power. (Chavez is even asking that Honduras now pay back aid given before Zelaya was removed from power)

Case 2: Chavez rejects the “coup” against Zelaya because coups are something that military gorillas  do and are anti-democratic

The graduates from the 2008 Air Force Academy choose as the name of their graduating class “November 27th. 1992″ in celebration of the coup attempt led by the Air Force (and fully supported by Hugo Chávez) on the date.

Case 3: Chávez and Venezuela reject the intervention of the US in any country in Latin America.

Chávez calls for Obama and the US to intervene in Honduras…

This all has the consistency of ideological tapioca…

(Este post se encuentra en Español aqui)

Hillary Clinton with the Ciudadano and Alberto FedericoRavell, just after Ravell twisted her right arm in order to have this picture taken and use it as protection with Hugo Chávez.

(Este post se encuentra en Español aqui)

Let’s recap: The Petrobono 2011 was supposed to be for US$ 2 billion, but expanded to US$ 3 billion. It was supposed to trade only in Venezuela, but then PDVSA offered to register it abroad. It was supposed to be institutional, but then it was opened to individuals. The schedule was changed three times and it was issued under local law.

It’s purpose? To raise funds for PDVSA and help drive down the parallel swap market that was Bs. 6.45 at the time.

Finally, it closed last week and after this series of comical and amateurish steps, it was supposed to be assigned today.

No more surprises you think?

WRONG!!!

Because today PDVSA announced the results and the cut off price was 175% at Bs. 2.15 per US$ purchased and in a surprising sleight of hand, PDVSA placed less than the US$ 2 billion originally planned or less than half of the “increased” amount of US$ 3 billion.

Essentially, given all of the uncertainties still remaining on the issue, investors decided to play it very safe and place bids that would give them a low price in local currency for their foreign currency. But in the end, PDVSA raised less than it wanted and investors went through a lot of grief for nothing. PDVSA says there were bids for US$ 7.9 billion, which we find suspect, unless the Government’s own banks placed last minute bids.

But in the end this has just been an operetta, a comical display of sheer incompetence that achieved less than half of one of the two main goals of the placement. Because in the end, today the swap rate ended up above what it was when the bond was first announced (Even if rumors of its existence did play a role in keeping the rate down)

And to add insult to injury, there is the new twist tonight that PDVSA says that it is studying issuing “soon” the remainder of the failed issue at a price even higher of 181%.

Jeez, so the lucky ones that actually got the bond will live until the remainder is issued under the shadow of the possible arrival in the market of almost US$ 1.6 billion in additional bonds, which will do little to prop up the price of the bond once it is registered in the international markets.

What will they say tomorrow? That they will wait to register it in the international markets for the new issue? Truly nothing surprises us anymore in this mindless and incompetent revolution, so why not this too?

A bunch of high school students would have probably done a better job than these revolutionary “professionals” of not so high finance in placing, now and then, the new Petrobono 2011.

(Este post se encuentra en Español aqui)

On Sunday, El Nacional (Ciudadanos page 13, by subscription) carried an article on the recent report by the United Nations on drug consumption and trafficking, which besides talking about the increase in consumption of opiates in Venezuela (page 89 of report),  it says Venezuela has become the largest transit country for cocaine in the world (page 72 of report), with an estimated 40% of all cocaine shipments going through the Bolivarian Republic of Venezuela.

The first thing you notice is the reaction of the Venezuelan Government, rather than being embarrased or surprised, or simply announce a new war on drugs, they somehow reach the conclusion that this was a victory for the country, finding it positive, as the UN found “Venezuela among the top countries in seizures of cocaine shipments”.

Well, it turns out that seizures in Venezuela are actually down, not up, while the percentage of cocaine trafficking that goes through the country is actually up significantly , but apparently the Colonel has little acquaintance with basic mathematical concepts.

But the most bothersome thing about this is the implications. Who watches the border for drug trafficking? Well, our illustrious military, which has been able to lobby for and purchase billions of dollars in defensive and offensive weapons, tanks, helicopters and jet fighters, but the country only has a single airplane dedicated to fighting drug trafficking and a meager seven frigates for over 1,000 Kms. of coast.

And the reason for this you may wonder? Well, I will not insult your intelligence on this, but it is quite obvious: corruption. The military looks the other way for the same reason that the Government looks the other way in the dozens of corrupt financial/business schemes that the robolution has invented in the last few years under the watch (??) of Hugo Chávez.

Thus, another victory for the Chávez revolution, joining those of terrifying crime statistics, kidnappings and corruption. Unfortunately, while these last three can be reverted in the future, the nefastous corrupting effects of drug trafficking and use, have proven to be almsot impossible to reverse once they are ingrained into the culture of a country.

While Insulza is trying to defend murky democracy in Honduras, in Venezuela the “One  Government, one voice” program continues successfully. Every day, democracy is diminished in Venezuela and Insulza seems to have a Mad Magazine, “What? Me worry attitude”. Let’s see:

—In Tachira State, the democratically elected Governor of the State will be unable to celebrate Independence Day, because the pro-Chavez General in charge of the region will not allow him to go into Plaza Bolivar, because “He is the military Governor” and has decided to militarize the State. Take that Insulza!

—And as part of the “One Govennment, one Voice” peculiar Chavista democracy, Cedice’s ads in favor of private property (They were not against anything, just pro-private property”, were suspended by the man the “people” ousted from the Governorship of Miranda State and resurfaced as all powerful Chavista Minister of Infrastructure and in charge of the media and telecom regulator Diosdado Cabellos. He will also shut down 200-plus radio stations, just because…he can!!! Are you listening Insulza?

—And n Carabobo State, the illustrious but barely illustrated Mayor of Valencia Edgardo Parra led a mob in he attack of the headquarters of newspaper El Carabobeño, in which the facilities were vandalized. Thus, the guy in charge of local security leads a mob, which damages private property and establishes a clear threat against freedom of expression. Insulza: Please defend democracy, but don’t meddle with Hugo!!!

It’s the new Latin American democracy: One Government, One Voice!!!

For two months the Government was “thinking” about issuing a bond for PDVSA. Last week it finally announced it, but:

1) It was too large an issue

2) It was only aimed at corporations

3) It was not registered abroad

4) It was forbidden to be traded in US$

5) The scheduled seemed to ignore i) Monday was a banking holiday, Friday was a stock market holiday in Wall St.

then

i) First the Government decided to let individuals participate

ii) Then it changed the schedule

iii) Then it allowed it to be traded in US$

iv) Finally, yesterday it said it would register in the international markets.

but…

–It is issued under Venezuelan Law, not under international regulations (PDVSA bonds were issued in 2007 under Reg S), international investors will not be as interested.

–Friday is still a holiday in the US and Thursday is half a holiday for fixed income markets.

–It is still too large at US$3 billion.

Thus, the bond remains a strange animal and will yield more than already existing PDVSA bonds. I will create indigestion in international markets as Venezuelans sell it abroad.

My suggestion:

Ask your broker to give you a price such that:

1) The bond yields more than 22%

2) You are buying dollars at or below Bs. 6 per US$

Better yet, do nothing, but next Monday or Tuesday buy the bond in US$ in the international markets as it gives you a yield (Yield to Maturity) of over 22% per yea for the next two years.

Issuing these bonds should be simple, the people managing it are simply brainless, so we go from Petrobono to Petrobrainless.

That is what the robolutionary PDVSA is all about.

The WSJ, makes it all about Chavismo. Sad, when politics in our countries are reduced to the whims of an autocratic Dictator who cares only about perpetuating himself in power and tried to have Zelaya do the same.

The Wages of Chavismo

The Honduran coup is a reaction to Chávez’s rule by the mob.

As military “coups” go, the one this weekend in Honduras was strangely, well, democratic. The military didn’t oust President Manuel Zelaya on its own but instead followed an order of the Supreme Court. It also quickly turned power over to the president of the Honduran Congress, a man from the same party as Mr. Zelaya. The legislature and legal authorities all remain intact.

We mention these not so small details because they are being overlooked as the world, including the U.S. President, denounces tiny Honduras in a way that it never has, say, Iran. President Obama is joining the U.N., Fidel Castro, Hugo Chávez and other model democrats in demanding that Mr. Zelaya be allowed to return from exile and restored to power. Maybe it’s time to sort the real from the phony Latin American democrats. [Review & Outlook] Associated Press People against the return of ousted Honduras President Manuel Zelaya participate in a rally at the central park in Tegucigalpa, Tuesday, June 30, 2009.

The situation is messy, and we think the Hondurans would have been smarter — and better off — not sending Mr. Zelaya into exile at dawn. Mr. Zelaya was pressing ahead with a nonbinding referendum to demand a constitutional rewrite to let him seek a second four-year term. The attorney general and Honduran courts declared the vote illegal and warned he’d be prosecuted if he followed through. Mr. Zelaya persisted, even leading a violent mob last week to seize and distribute ballots imported from Venezuela. However, the proper constitutional route was to impeach Mr. Zelaya and then arrest him for violating the law.

Yet the events in Honduras also need to be understood in the context of Latin America’s decade of chavismo. Venezuela’s Hugo Chávez was democratically elected in 1998, but he has since used every lever of power, legal and extralegal, to subvert democracy. He first ordered a rewrite of the constitution that allowed his simple majority in the national assembly grant him the power to rule by decree for one year and to control the judiciary.

In 2004 he packed the Supreme Court with 32 justices from 20. Any judge who rules against his interests can be fired. He made the electoral tribunal that oversees elections his own political tool, denying opposition requests to inspect voter rolls and oversee vote counts. The once politically independent oil company now hires only Chávez allies, and independent television stations have had their licenses revoked.

Mr. Chávez has also exported this brand of one-man-one-vote-once democracy throughout the region. He’s succeeded to varying degrees in Ecuador, Bolivia, Argentina and Nicaragua, where his allies have stretched the law and tried to dominate the media and the courts. Mexico escaped in 2006 when Felipe Calderón linked his leftwing opponent to chavismo and barely won the presidency.

In Honduras Mr. Chávez funneled Veneuzelan oil money to help Mr. Zelaya win in 2005, and Mr. Zelaya has veered increasingly left in his four-year term. The Honduran constitution limits presidents to a single term, which is scheduled to end in January. Mr. Zelaya was using the extralegal referendum as an act of political intimidation to force the Congress to allow a rewrite of the constitution so he could retain power. The opposition had pledged to boycott the vote, which meant that Mr. Zelaya would have won by a landslide.

Such populist intimidation has worked elsewhere in the region, and Hondurans are understandably afraid that, backed by Chávez agents and money, it could lead to similar antidemocratic subversion there. In Tegucigalpa yesterday, thousands demonstrated against Mr. Zelaya, and new deputy foreign minister Marta Lorena Casco told the crowd that “Chávez consumed Venezuela, then Bolivia, after that Ecuador and Nicaragua, but in Honduras that didn’t happen.”

It’s no accident that Mr. Chávez is now leading the charge to have Mr. Zelaya reinstated, and on Monday the Honduran traveled to a leftwing summit in Managua in one of Mr. Chávez’s planes. The U.N. and Organization of American States are also threatening the tiny nation with ostracism and other punishment if it doesn’t readmit him. Meanwhile, the new Honduran government is saying it will arrest Mr. Zelaya if he returns. This may be the best legal outcome, but it also runs the risk of destabilizing the country. We recall when the Clinton Administration restored Bertrand Aristide to Haiti, only to have the country descend into anarchy.

As for the Obama Administration, it seems eager to “meddle” in Honduras in a way Mr. Obama claimed was counterproductive in Iran. Yet the stolen election in Iran was a far clearer subversion of democracy than the coup in Honduras. As a candidate, Mr. Obama often scored George W. Bush’s foreign policy by saying democracy requires more than an election — a free press, for example, civil society and the rule of law rather than rule by the mob. It’s a point worth recalling before Mr. Obama hands a political victory to the forces of chavismo in Latin America.