Archive for July 9th, 2003

And more corruption: The Big rip-off as told by the Financial Times.

July 9, 2003

 


Liked this article by Andy Webb in the Financial Times on the questionable swaps by the Ministry of Finance (The BIG rip-off). Since it is by susbcription after two days, here is the whole thing, should speak for itself:


 


Venezuela‘s finance minister is under pressure from bankers and political opponents to explain a series of unusual debt deals that critics say could jeopardise a forthcoming bond swap offer to foreign investors.


Facing an economy that is forecast to shrink by about 15 per cent this year and a growing fiscal deficit, Tobias Nóbrega, the minister, wants to complete the swap in order to reduce looming payments obligations on the country’s $22bn (?19bn, Ł13bn) foreign debt.


At the centre of the controversy are two debt exchanges carried out in March and April, between the ministry, two privately owned brokers, and a state development bank formerly called the Venezuelan Investment Fund (FIV).


According to documents obtained by the FT, Mr Nóbrega and Nelson Merentes, head of Bandes, co-ordinated the sale of a basket of dollar-denominated Venezuelan sovereign bonds owned by the bank and worth a total of $411m.


The bonds were sold directly to Global Partners Group, a New York-based asset manager, and to Multiplicas, a brokerage owned by Venezuelan bank Banesco. In return, the ministry issued dollar promissory notes to Bandes, and received cash.


Bankers want to know why two small brokers were chosen, who is behind the deal, and what role was played by Alejandro Dopazo, the director of public credit and Mr Nóbrega’s closest aide.


Global Partners, which bought $308m worth of the bonds, was formerly Westfalia Investments, a Caracas-based brokerage that local brokers say had once employed Mr Dopazo as a trader. Neither Mr Dopazo nor Global Partners returned calls. Multiplicas, which acquired the other $103m worth of bonds from Bandes, handles the deposits of the Venezuelan military. The bonds were deposited into accounts at Lehman Brothers and JP Morgan Chase.


“The process lacks transparency and there are a lot of unanswered questions,” said Seth Antiles, director of Latin America fixed income strategy at Citibank.


“It is curious that they used very obscure brokerage houses. And it is very strange why a brokerage was needed at all to be involved in a swap between two public-sector entities.”


Mr Nóbrega said in a statement that third parties were used to avoid news of the debt sale “depressing prices” and that a “debt buy-back” legally required a third party. However, the bonds have not been retired.


“Market conditions prohibited the issue of new debt at a favourable coupon, and the swap avoided losses that otherwise would have been incurred,” Mr Nóbrega added. Concern about the transactions is understood to have prompted Diego Castellanos, the central bank governor, to write to President Hugo Chávez.


Opposition deputies have asked Mr Nóbrega to appear before the legislature’s finance commission on July 23 to answer accusations that the ministry is decapitalising Bandes.


Analysts say that, even though some of the bonds were originally bought by FIV at a discount, the transaction has weakened Bandes’s capital base because the promissory notes would be likely to be accorded a heavy discount if ever traded.


“Unless the minister of finance is able satisfactorily to explain these transactions, which so far he has not done, in any modern democracy this type of scandal would merit his resignation,” said Francisco Rodríguez, chief economic adviser to the legislature.


Investors are also concerned over whether either of the two brokerages, or their clients, might have been aware of details of a market-based swap and a new bond issue that Mr Nóbrega is preparing. Bankers say the bonds most likely to be swapped are those types – called DCBs and Flirbs – which were released by Bandes.


“You can’t give preferential treatment to only some of the bonds,” said José Barrionuevo, director of strategy at Barclays Capital. “Swaps have to be offered to the entire market.”

Report to Fidel part II

July 9, 2003

 


Another good article in El Universal by Elides J. Rojas. Part I is here.


 


Another report, Fidel by Elides J. Rojas


 


Dear commander. From Caracas and more concerned than before I am sending you this second report.


The disguise of alphabetization is going well. Some noise, but they are buying it. We already spoke to Chacon, the coupster that fired a lot of people in Channel 8 (The Government channel). Now he is the Minister of Information. He will make another training video. They have laughed a lot about that. People say it looks like the Chavo neighbor (a TV character) and say the instructor looks just like a women called Reina del Campo, down to the flowers in the skirt and everything. There are some possible candidates from the classroom, quite rural, but they play their role well in the National Assembly. The best part is, they still believe the tale of the revolution. We will not get involved with that.


The guys from the party do need urgent attention. They only think about something they identify as the “stew” . (Guiso in Spanish). I thought it was food. It is not that. It is just like in Cuba, but with a different name. The problem is that in the third contract they are already riding in a Mercedes, like yours, going around Barinas state. It can’t work like this. I explained to the tactical command of the revolution that there are two types of thieves: the corrupt ones that we fight against in our speeches and the revolutionary thief, ours, the one that has to administer himself with the best dumb face that it can find. We insisted with Lucas but nothing happened. He has assumed the compromise to speak more in public to promote respect for the Robinson Mission (The name of the alphabetization campaign).


 


On the other stuff, what we came for, there is no progress. The doctors are not doing well. The other day they left a ripped sock in the stomach of a lady. And Peter, the cardiologist, has set up a stand to sell herbs. He even has a phone line 800-SPELL. I am trying to catch him. They tell me he even has a Credit card now. Joaquin, the orthopedist, fixed the legs of a soccer player, but placed the calfs in the front. Romulito the psychiatrist was not doing well since Angola. Here he has collapsed. Otaiza found him a job to supplement his income. I went to see him. He does a spectacular Tongolele (female dancer) in a night club in Guarenas. I think this will be his last mission.


 


With the educators, a little better, but we have to pressure a little in the firing squad and advanced torture classes. In spying I and II they are doing well, but not so much media sabotage. Jacinta, the teacher from Santiago, the one that taught the explosive experts from Liberia to read, is acting very strange. She has reached the extreme of bathing everyday, combs her hair and wears perfume. I saw her, my God! With a spectacular mini skirt and a handkerchief, brother, a handkerchief around her neck. But don’t worry, I threatened her with taking her kid away and sending him to take a Kamikaze course with Osama. In PDVSA, we have placed some Managers and we are driving some ships. They all have id papers. The takeover is going very well.


 


Your son, the guy from the plains is still worrying me. He is a born capitalist. I discovered that he has 18 billion dollars under lock and an Airbus that not even comrade Saddam has. He is confused. A while back, in a parade he dared to tell some military guy that he was their commander in Chief. To some civilians in a theater, that he was the President of Venezuela. How abusive! You have to talk to him.


 


Well, boss, I hope to have better news next time. Say hello to Tiro Fijo, I have not seen him since we exploded the pipeline last year.

Report to Fidel part II

July 9, 2003

 


Another good article in El Universal by Elides J. Rojas. Part I is here.


 


Another report, Fidel by Elides J. Rojas


 


Dear commander. From Caracas and more concerned than before I am sending you this second report.


The disguise of alphabetization is going well. Some noise, but they are buying it. We already spoke to Chacon, the coupster that fired a lot of people in Channel 8 (The Government channel). Now he is the Minister of Information. He will make another training video. They have laughed a lot about that. People say it looks like the Chavo neighbor (a TV character) and say the instructor looks just like a women called Reina del Campo, down to the flowers in the skirt and everything. There are some possible candidates from the classroom, quite rural, but they play their role well in the National Assembly. The best part is, they still believe the tale of the revolution. We will not get involved with that.


The guys from the party do need urgent attention. They only think about something they identify as the “stew” . (Guiso in Spanish). I thought it was food. It is not that. It is just like in Cuba, but with a different name. The problem is that in the third contract they are already riding in a Mercedes, like yours, going around Barinas state. It can’t work like this. I explained to the tactical command of the revolution that there are two types of thieves: the corrupt ones that we fight against in our speeches and the revolutionary thief, ours, the one that has to administer himself with the best dumb face that it can find. We insisted with Lucas but nothing happened. He has assumed the compromise to speak more in public to promote respect for the Robinson Mission (The name of the alphabetization campaign).


 


On the other stuff, what we came for, there is no progress. The doctors are not doing well. The other day they left a ripped sock in the stomach of a lady. And Peter, the cardiologist, has set up a stand to sell herbs. He even has a phone line 800-SPELL. I am trying to catch him. They tell me he even has a Credit card now. Joaquin, the orthopedist, fixed the legs of a soccer player, but placed the calfs in the front. Romulito the psychiatrist was not doing well since Angola. Here he has collapsed. Otaiza found him a job to supplement his income. I went to see him. He does a spectacular Tongolele (female dancer) in a night club in Guarenas. I think this will be his last mission.


 


With the educators, a little better, but we have to pressure a little in the firing squad and advanced torture classes. In spying I and II they are doing well, but not so much media sabotage. Jacinta, the teacher from Santiago, the one that taught the explosive experts from Liberia to read, is acting very strange. She has reached the extreme of bathing everyday, combs her hair and wears perfume. I saw her, my God! With a spectacular mini skirt and a handkerchief, brother, a handkerchief around her neck. But don’t worry, I threatened her with taking her kid away and sending him to take a Kamikaze course with Osama. In PDVSA, we have placed some Managers and we are driving some ships. They all have id papers. The takeover is going very well.


 


Your son, the guy from the plains is still worrying me. He is a born capitalist. I discovered that he has 18 billion dollars under lock and an Airbus that not even comrade Saddam has. He is confused. A while back, in a parade he dared to tell some military guy that he was their commander in Chief. To some civilians in a theater, that he was the President of Venezuela. How abusive! You have to talk to him.


 


Well, boss, I hope to have better news next time. Say hello to Tiro Fijo, I have not seen him since we exploded the pipeline last year.

Brazil to name new Ambassador

July 9, 2003

 


The Government of Brazil will remove Ambassador Ruy Nogueira. Nogueira had become controversial after the infamous “Petarazo” when he came out in Manus, Brazil and said that the rally had been a provocation of the opposition and that they were simply looking for violence. While the Brazilians deny that this was the reason for Nogueira’s removal, the truth is that given the fact that Brazil is part of the “Group of Friends” his positions have been at least quite embarrassing to Lula. Curiously, Nogueira had also announced a visit by Brazilian President Lula to Venezuela which has now been postponed despite its proximity.

The rip-off revolution

July 9, 2003

 


Last month, a local bank which is the third or fourth largest in the country decided to hold an advertising campaign  by which if people either brought new funds to the bank or spent in their credit card, they could win  a car. Well, today as many as three different reporters in the local media, Rodolfo Schmidt, Marianella Salazar and Juan Carlos Zapata report that one of the lucky winners is none other than MVR Deputy Juan Barreto. The former reporter was reportedly sixth in the contest by depositing s much as 600 million “new” Bolivars into his account (close to US$ 400,000 at the official exchanga rate), winning a Toyota Yaris in the process. Such a pretty rip-off of a revolution!

The rip-off revolution

July 9, 2003

 


Last month, a local bank which is the third or fourth largest in the country decided to hold an advertising campaign  by which if people either brought new funds to the bank or spent in their credit card, they could win  a car. Well, today as many as three different reporters in the local media, Rodolfo Schmidt, Marianella Salazar and Juan Carlos Zapata report that one of the lucky winners is none other than MVR Deputy Juan Barreto. The former reporter was reportedly sixth in the contest by depositing s much as 600 million “new” Bolivars into his account (close to US$ 400,000 at the official exchanga rate), winning a Toyota Yaris in the process. Such a pretty rip-off of a revolution!

Politics and poppy seeds dont mix

July 9, 2003

 


The owner of the only bakery (Danubio) in Caracas that shutdown during the strike in December was jailed for having poppy seeds in his bakery. This is not a joke.

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