Archive for February 7th, 2004

Sitting on a financial time bomb?

February 7, 2004

 


Long article in today’s El Nacional (page A-17, by subscription only) by banking analyst Francisco Faraco. Faraco is best known for his ratings of the banking system. In this article he gives out numbers that are quite scary. The article is long, thus instead of translation I will condense it in my own words.


 


The Minister of Finance announced that he is preparing a resolution so that ”excess” public funds in the banking system are returned to the Ministry. The Central Bank (BCV) said such funds amount to 37% of the budget and 26% of all deposits in the banking system, which implies that half of the internal debt was unnecessary.


 


However, this issuing of internal debt increased liquidity by 61%, forcing the Central Bank to issue its own liabilities in the form of CD’s to drain liquidity. This forces interest rates up and is a drag on the economy.


 


At the end of 2003, the banking system had 83% of all of the internal debt, add to this the BCV’s CD’s and the system had 8.7 trillion Bs. which gave the banking system Bs. 1.9 trillion in profits. Add to that some Bs. 400 billions and the banking system earned Bs. 2.3 trillion or 80% of its profits from Government deposits and paper.


 


If the Ministry of Finance delivers on its threat, eleven banks (3 public, 4 private and regional and four private and nationwide) or 27% of the system will need financial assistance from the Central Bank and 19 banks would start losing money. Additionally, two public banks would have to be liquidated and eight private ones would need to be capitalized, if they don’t want to be liquidated.


 


According to Faraco, all of this was possible because the Minister of Finance covered up the details of the expenses of the country, the Superintendent of Banks ignored the balance sheets of the banks,  the auditors approved false financials, the bankers looked the other way so as not to see the treachery of their colleagues and that nothing that has been said about al of these problems caught the attention of any National Assembly member, the Comptroller, the Attorney General or the Peoples’ Ombudsman.


 


Scary isn’t it?

Quotes from the depths of the ugly revolution

February 7, 2004

 


Yesterday, Lina Ron, the pro-Chavez political activist held a rally to announce the creation of her political party Union Popular Venezolana. The rally was attended by numerous Chavista leaders and some Ministers. The rally was a tribute to the anti-democratic forces that support Chavez. Here are some quotes taken from today’s El Universal, El Nacional and Globovision


 


Lina Ron:


 


“There is a possibility that the CNE will allow the recall referendum, we can not accept it, I foresee that whether the answer is one or the other there is going to be a combat”


 


“My party is composed of the radicals, the tough ones, the violent ones”.


 


Minister of Infrastructure and former Vice-President Diosdado Cabello:


 


 “If two million signatures have to be eliminated, then they will be eliminated”


 


“I could care less about international opinion” (Said using a vulgar term)


 


“The opposition is preparing, with international backing, an institutional coup because we will not have a referendum because the signatures were not gathered”


 


This is the pretty and democratic revolution?

Quotes from the depths of the ugly revolution

February 7, 2004

 


Yesterday, Lina Ron, the pro-Chavez political activist held a rally to announce the creation of her political party Union Popular Venezolana. The rally was attended by numerous Chavista leaders and some Ministers. The rally was a tribute to the anti-democratic forces that support Chavez. Here are some quotes taken from today’s El Universal, El Nacional and Globovision


 


Lina Ron:


 


“There is a possibility that the CNE will allow the recall referendum, we can not accept it, I foresee that whether the answer is one or the other there is going to be a combat”


 


“My party is composed of the radicals, the tough ones, the violent ones”.


 


Minister of Infrastructure and former Vice-President Diosdado Cabello:


 


 “If two million signatures have to be eliminated, then they will be eliminated”


 


“I could care less about international opinion” (Said using a vulgar term)


 


“The opposition is preparing, with international backing, an institutional coup because we will not have a referendum because the signatures were not gathered”


 


This is the pretty and democratic revolution?

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