Archive for July 11th, 2006

The “bi-national” bond: Another nutty and perverse creation of the revolution

July 11, 2006


In another act of
financial irresponsibility and stupidity, the Venezuelan Minister of Finance announced
that Venezuela will issue a
bond with Argentina.
The two countries will issue a “b-national” bond with Argentina, which was confirmed today by
President Kirchner.

While all details are unknown,
the idea would be to issue a joint bond so that Argentina
can benefit of Venezuela’s
better financial strength to pay less. Some deal, no? These are the same guys
that scream sovereignty anytime the word Venezuela is said with an accent,
but then could care less about using the country’s funds to benefit others or
crime rising 200% since Chavez took over. Some sovereignty!.

The whole thing is in
the end a tremendous rip-off for Venezuelans. Argentina
will piggy back on Venezuela’s
better credit rating to pay less, which means Venezuela will pay more. Moreover,
at least part of the operation is likely to contain bonds sold in Venezuela
in Bolivars. The way this would work, would be for the Venezuelan Government to
place the bond locally in Bolivars, say US$ 1 billion, turn around buy US$ 1
billion from the Central Bank at the official rate of exchange and send it over
to Argentina for their financing needs. In this process, Venezuela has fewer reserves and will be
partially responsible for the bond if Argentina ever stops paying.

There have been rumors
that Venezuela
would offer some for of collateral or guarantee, but today the Minister denies
this will be the case and it will be a mixture of the two risks. The country
can not offer any collateral because that would violate clauses of other issues
outstanding that would have to receive the same treatment.

The Minister said
again
that Venezuela
had made a profit buying Argentinean’s Boden during the last year. Such profits
only exist because the Government has access to the official arte of exchange
as I explained on Sunday. Meanwhile, Merentes also announced that
the country had bought US$ 25 million in Ecuadorian bonds and the Head of
Bandes said
they would buy US$ 100 million in Itaipu Falls
bonds. The same bonds that Lula said could not be sold to Venezuela by Paraguay.

What makes all of
these operations even more mysterious is the fact that Argentina needs no more financing
to fulfill all of its obligations during 2006, according to most research from
international brokerage firms. So, what is the rush for Venezuela to subsidize Argentina instead of issuing its
own new debt at lower costs? Why do something that goes so clearly against the
national interest and the country’s finances?

A we say in Spanish:
“Think badly and you will be right!”

Mexican scientists fast at work on analizing electoral results

July 11, 2006


Hats off to Mexican
scientists that in just a week
are producing data and short papers and posts on the analysis of the elections
in Mexico.
If Venezuelan scientists had responded with similar speed and flexibility maybe
some part of history may have been changed with the 2004 RR. Maybe the precedent
helped!

The paper
on Benford’s law by Mansilla
finds some discrepancies with the 8th.
and 9th. digit, which may be statistically significant, but nothing like those
found in the No vote for the RR, it will be interesting to see in the future
further detailed statistical analysis like what was done in Venezuela and what it may
tell us.

There is also a long
analysis and discussion by Mochan on the
evolution of the reported vote on the night of the election and the recount. Lots
of data and comments, but I have not digested it sufficiently to understand
even the graphs he is showing, but it looks quite interesting.

I guess those Governments that
want to cheat in future elections in LA are going to have to hire scientists so
that whatever they do to change the outcome matches all of these tests for the adequacy of their
fudged results.

Maybe one day UNEFA will honor them?

I find the whole thing very cool!

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