Archive for November, 2007

Hugo Chavez promises 43 more years of his rule as he turns his closing on the reform vote into a rally for a plebiscite

November 30, 2007
With promises of running Venezuela until 2050 if he lives that long, when he will be 95 years old, Hugo Chavez closed his rally
of the close of the campaign for referendum reform. And if some of his
supporters were having doubts about Chavez’ intentions, just daring to
say that revealed to a great extent he autocrat’s frame of mind.

And it was no longer
a matter of mine is bigger than yours. While I watched yesterday’s No
rally from the ground, I only saw this one from TV cameras, which
showed comparable rallies, which to me is quite a victory for an
opposition, which a month ago seemed destined to a huge defeat. Add to
this Chavez’ hundreds of buses, lots of money to buy attendance,
coercion and memos telling Government workers that it was mandatory to
attend and it was in fact surprising hat the NO rally seemed denser,
larger and more enthusiastic than today’s Si rally. In one radio
station a caller detailed how he went to work on Thursday at the notary
office somewhere in the East of Venezuela and found the office closed
and the bus waiting to take everyone to Caracas for the rally. He had
to go, but as he said he does not have to vote Si on Sunday after
leaving his sick son alone for a day and a half without recourse.

And throughout his speech Chávez kept bringing back the subject
to the only terrain where he can hope to win: A vote for No is a vote
against him, a vote for No is treason, a vote for No is a vote for Bush
and a vote for NO and a vote for NO was a vote to turn Venezuela into a
colony of the United States.

And there were
also threats of grabbing his rifle again if the opposition refused to
recognize his victory quoting polls that nobody has seen in which he
supposedly has a commanding 10-15 point lead.

There
was absolutely no content about the reform other than the pitiful
claims that somehow concentrating power on him gives more power to the
people. Chavez made one last attempt to turn the vote into a plebiscite on his rule, but he may have promised too many more years for people’s comfort. There was also the threat to cut off the US form oil supplies
if the opposition did not recognize the Si victory on Monday and he
claimed he would recognize the victory of the No if it happened,
apparently in reference to his former wife’s accusations that he would
have a difficult time accepting it.

And his
claim that he could be in power until 2050 illustrated better than
anything the autocrat’s frame of mind, why he wants the power, he needs
the reform and he deserves to be trusted. Nothing about the goals of
the reform and all about Chavez. Trust him, after nine years maybe he
has found the way, even if all he has for it is a name: XXIst. Century
Socialism.

In the end, the autocrat seemed to
be unraveling as he told his public how they are trying to assassinate
him, get rid of him, eh is the only hope, all international leaders
hate him because he is…Hugo Chavez.

All in all,
the speech seemed aimed at those already committed towards voting for
the Si and it is hard to believe it would convince any of the former
Chavistas who are having doubts about voting for the reform. But what
do I know, I never understood why they voted for him before…

A perverse, tragic and unending poker game in Latin America

November 30, 2007

I always found
the perverse ballet between Chavez and Uribe surrounding the hostage
negotiations to be fascinating. Here are two people who deal with each
other only because they have to but have very different goals,
accepting each other in order to achieve their own goals. The mystery
was why Uribe agreed to Chavez’ mediation. The third party, the FARC,
was tougher to figure out: What did the FARC want? It could be money;
it could be the ability to use Venezuelan territory at will, it could
be looking to even take advantge of the Bolivarian revolution to expand
its role in wealthier confines, the only question was why they did not
try  to help Chávez more along the way.
 
Chavez
was clearly looking for fame. What else is new? That is what he strives
for, the limelight, the spotlight, the center of attention. He was
either looking for some sort of big impact before the December
referendum or trying to get his name nominated for the Nobel Peace
Prize.
 
Uribe on the other hand was in my
opinion trying to see if the movements and logistics required by the
FARC to give Chávez evidence or more importantly, release the proof of
life, would force the FARC to commit an error and capture some of them.
Clearly, Uribe wished he would actually catch someone big in the
process.
 
The FARC on the other hand have proven
to have some sort of hidden agenda, proving what I always believed,
that while Chávez has few scruples or regards for human rights, he is
as we say in Spanish “a breast feeding baby” compared to the FARC
leaders. Simply look at the cruelty in the way they hold hostages, kill
people and make the lives of the hostages and their families miserable
for years. They are truly cruel and terrorists and would not hesitate
to overrun Chavez if they could.
 
But the
question remains: Why didn’t the FARC deliver the required poof of life
in time? If the videos and pictures date as far back as October 23d.
why wasn’t at least part of it delivered to Chavez’ hands in time for
his visit to France? Allow Chavez to have some success but keep him on
a leash. Was there something Chavez asked but did not deliver? Maybe
the FARC are simply too independent to be impressed by the leader of
the Bolivarian revolution, even if they like to live off his wealth.
 
In
the end we will never know. Chavez got desperate and tried to bypass
the rules. Uribe broke up with him and suddenly (or coincidentally, who
knows?) they capture some underlings of the FARC with the material
Chávez wanted. To Uribe and Sarcozy, Chavez mediation seems to be over,
he had his time, he had his opportunity, but did not deliver and it has
been proven the FARC was toying with him. Thus, now Uribe and Sarcozy
can move forward on their own and deal with each other directly.
 
While
it is clear to me Uribe was toying with Chavez and his naďve believe
that his own interests and those of the FARC were aligned, I am not yet
sure what hand the FARC was playing or even trying to play in all this.
 
In the end, it is the individuals and their
families that are hurt by all of this, from the politicking to the
games, a sad game of political poker in which human beings, from Ingrid
Betancourt on down, are simply incidental figures to the ideological
and geopolitical games that mean little to the average citizen of Latin
America and their daily lives. It is in some sense part of the tragic
magic realism that seems to dominate our lives in the region, in the
name of ideologies while our people go hungry and without rights.
 
It is a perverse, tragic and unending poker game.

Video by the Human Rights Foundation

November 30, 2007

Excellent video on human rights in Venezuela by the Human Rights Foundation. I do hope that one of the Caracas Nine becomes the tens of thousands of victims of homicide due to the negligence and indifference to the right to life of the Chavez Government.

More pictures from the NO closing rally

November 29, 2007

People filled all spaces on the side too, as shown on the left.(Impossible to translate the poster). On the right people dancing and singing in the middle of the crowd.

Pictures taken from the middle of Avenida Bolivar showing how crowded it was back (left) and front (right)

Lot’s of creativity on the posters side as usual. On the left a very good one: “Let’s vote, it’s the only way to shut Chavez up”

On the left “Bolivar already said NO and you?. On the right, just about any space was good enough to advertise the NO vote

Left: Two girls got up on the stone in a park to take a break. On the right, as I was leaving after two hours at the rally, crowds were still moving in.

Massive rally to close the NO campaign on the referendum for constitutional reform

November 29, 2007

It was a long and very tiring day, as I joined the march in favor of voting NO on Sunday’s Constitutional Reform referendum, which took place in Avenida Bolivar, Chavez’ favorite place to hold rallies, but which has been curiously banned for the opposition for exactly five years. This time around, the pressure from the student movement was too much for the Government, and as the students began calling to go to the Presidential Palace, the authorities yielded Avenida Bolivar to today’s rally.

There were five separate marches from various places in Caracas and attendance was simply massive. Above left you can see one of the five marches and the people were simply overflowing roads, parks and pathways in a massive rally which Chavez will have to try to match tomorrow, when he will hold his own rally at exactly the same place. As I went along I sent pictures via my cell phone to Daniel, allowing real time blogging of the day’s events, as Daniel accompanied my pictures with those taken from a webcam from which one could see Avenida Bolivar filling up. Above right, one of the many pictures that I have received showing an overview from a special vantage point from the front, showing how packed the place was. I will post more pictures here, comments will appear in a little while.

The students have made a clear difference in these rallies, they attended massively and easily made up over half of those in attendance, maintaining a level of cheerfulness and energy that made a huge difference in the atmosphere of the rally. For once, people stayed to listened to the speakers, mostly students who were cheered, but including some politicians which were booed. The students spoke well and more importantly sent a message of conciliation to the pro-Chavez forces. As expected, the Government’s TV station did not cover the rally, except for showing some images which were clearly taped when the rally was not in full force showing scant attendance at the NO rally. Somewhat comically, the Government’s main TV station showed four of five buses reportedly used by the students to bus people in, which turned out to be buses provided by the organizers of tonights’ rock concert by Venezuelan group Soda Stereo, since the place where it is being held has limited parking.

It was a strong close to a campaign that seems to have taken a turn that has surprised many, including me as the vote looks close and the outcome is now totally dependent on the level of abstention. But there is quite a bit of enthusiasm at this time to go and vote and today’s turn out proves it. Tomorrow we shall be able to compare the level of enthusiasm as Chavismo uses all of the Government’s resources, including buses to try to upstage the NO rally. Images will tell us if they succeeded.

In a strategic move, Chavez informally breaks relations with Colombia as the race heats up once again

November 28, 2007

Hugo Chavez broke relationships
at least informally today with Colombia, saying that a long as Alvaro
Uribe remains as President of that country; he will have no relations
with him. It was a somewhat dramatic end to the spat between Chavez and
Uribe, which began when Uribe decided to stop Chavez’ mediation into releasing some of the hostages in the hands of Colombia’s FARC.
 
While
Uribe used very strong words yesterday when he announced the end of the
mediation, Chavez got personal yesterday* in his response, calling the Colombian President a “sad pawn of the North American Empire”. Uribe was more indirect today, saying that
“Presidents have to respect their people rather than thinking about
vanities and anger”. But then, in what appears to be carefully
calculated words, Chavez made his new statement about relations between
the two countries.
 
Sp far, the statement has
not been formalized as policy as the whole reaction, like so many
delayed reactions in Chavez’ part, seems to be a carefully thought out
plan to gain votes on Sunday’s referendum. While the trends in polls
had been in favor of Chavez’ proposed reform being defeated on Sunday,
with the NO gaining ground with remarkable speed, this trend was broken
by the initial spat with Uribe last week. As I suggested in my previous
post, some pollsters had detected a reversal of the trend, which can
apparently be traced back to the incident between the two Presidents.
Remarkably, the popularity of both Presidents was actually boosted by
the bickering; as nationalistic sentiments were awaken by the conflict.  Thus, Chavez seemed to be looking for a quick fix to his weakling position in the polls.
 
While
the strategy has very negative consequences long term, Chavez’
immediate needs are more important. Colombia is Venezuela’s second most
important trading partner after the United States and provides many
basic foodstuffs at a time of widespread shortages with some basic
items.
 
At the same time one has to wonder
about whether the initial spike in popularity may be offset Chavez’s
stronger words now, particularly among the large voter population of
Colombian origin in Venezuela, but we are sure pollsters that are
advising the President have taken that into consideration.
 
And
as the date of the vote approached, activity picked up, with the last
opposition group siding with abstention, the “Comando de La
Resistencia” gave up its long standing stance against voting with a rigged system.
 
But
the largest “opposition” to Chavez seemed to be coming from Chavez’s
former supporters in Podemos, General Baduel and even his former wife,
who once again held a press conference, asking for forgiveness from the
people for the damage she may have caused by supporting her former
husband and calling the proposed reform treason and illegal.
 
But the most symbolic one may have been Baduel’s statement
in which Chavez’ former buddy and Minister of Defense not only charged
Chavez with changing the ideal of the Bolivarian revolution, but also
seemed to be talking directly to the military about their role not as
“arbiters” but to defend the Constitution jointly with the people.
Baduel called once again for people to vote No on Sunday and to go and
vote, trying to occupy in our minds the role as a possible figurehead
for “Chavismo without Chavez” in case the outcome on Sunday is not
respected, should the NO come out ahead. Clearly, the former Minister
of Defense had early knowledge of the surge in the NO and was trying to
position himself for the eventuality of a NO victory or the
interference by the Government with the results.
 
Thus,
with barely three days left for the vote, things continue to heat up
and strategies are being implemented with little time for preparation.
Tomorrow the “opposition” led by the student movement, closes its NO
campaign with a rally in Avenida Bolivar in downtown Caracas to be
followed on the same location the next day by Chavez and his SI
supporters. There will be no more polls that can be publicly released
and one can expect more violence, as well as more foolish decisions such as the Electoral Board opening an investigation on the church, while pro-Chavez campaign is outrageously biased in his favor in Government TV stations. 
 
By
now, whatever internal polls and trends may be saying, may be set in
stone in any case, as the most important factor, whether voters decide
or not to go to vote on Sunday, is what will likely tip the scales on
Sunday. Unfortunately, the Government has the resources, the tools and
the ability to coerce, which the opposition lacks, which may be enough
to tip the scales in its favor, even if the NO is ahead.

*While little noticed in the noise, Chavez “pawn” statement against Colombia’s President was made at an event celebrating the 15th. year anniversary nof the Nov. 1992 coup which Chavez supported, even if he was not able to participate as he was in jail at the time. This from the man who accuses everyone of plotting against democracy, while he celebrates such acts. Some democrat, no?

As things heat up, it looks like Hugo Chavez is trapped in a lose-lose situation

November 27, 2007


Things have certainly heated up in the last few days, almost as much as
the damaged power supply of the computer where my blog resides, certainly
sufficiently to justify an update and at least give you some perspective on how
I see things.

First of all, there is no doubt that Chavez has managed to irk some of
his former buddies, who while not outright supporters, at least had seemed to
achieve some form equilibrium with the volatile Venezuelan President. Both Spain and Colombia have
all of a sudden been frozen out by the autocrat, literally and diplomatically.
There is little I can add there, Chavez was clearly looking for some sort of
international success with the release of the hostages of the FARC, while Uribe
seemed to be allowing Chavez to fish for some quick fame as a way of having
some FARC leaders come out of hiding and capture them. In the end Chávez
got frustrated with the failure of his efforts and supposedly overstepped the
bounds of the established rules, causing the irkness of the Colombian President
who does not see the FARC, for historical reasons, as more than bloody
terrorists and enemies. Meanwhile Chávez is still asking for an apology from
the Spanish King for telling him to shut up, an apology that is certainly not
forthcoming in the King’s lifetime. There were also minor incidents with the
President of Chile, which suggest that Hugo Chávez is either on the edge or
getting ready to break up with the world or nervous about the upcoming
referendum.

And what once seemed, at least to me, like a sure thing, the approval of
the referendum on Constitutional reform, may be looking iffy at this point in
time. Both pro-Chavez pollsters and anti-Chávez pollsters are giving the NO
vote a lead, but the most startling aspect is without a doubt the speed with
which the numbers have changed. In less than three weeks, we have gone from a
YES lead, with large abstention, to a large NO lead in some cases, as voters
seem to be more interested in participating that they were a month ago. Quico has posted an excellent
summary of the polls here.

While the Government seems clearly nervous, as was shown by the strong attack
on the church today by the Vice-President accusing it of participating in
meetings to create disturbances, it is also mobilizing all of its resources and
blatantly violating all electoral rules. The TV balance present earlier in the
month is now non-existent and Chávez is trying to use the impasse with Colombia to his
advantage. Similarly, after opposition students announced their closing of the
campaign on Thursday, the Government said it already had the permits for that
day, but when the opposition said it would do it Friday, the Government
preempted them by saying they had the permits for Friday. Fortunately, the
students did not make a point of this saying they would move to Thursday as
originally planned.

In the end, the NO would need a huge lead to win, given the tricks up
the sleeve of the administration. To me, the SI still has the edge on the
ability of the Government to mobilize the vote. The No enjoys the advantage that
the turnaround in people’s sentiment has been quite dramatic and in polling
trends like that have to respected as they are quite difficult to reverse. However,
Datanalisis reportedly has a new poll from Nov. 24th. which showed
the trend reversing and the race now being close.

For Chávez the reversal has been quite dramatic and in some sense has
created a lose-lose situation for him, which has few political openings for him
to save the day. He needs a mandate to push his socialist revolution forward and
it certainly looks that he may barely get it. This will weaken him
significantly and he still has five years to go in his presidential term.
Losing would be devastating, as he would be left with no clear political
program going forward, at a time when discontent is growing fast.

Chávez can obviously withdraw his reform, which would make him look bad,
but may in the end be the best of all options. Other options such as suspending
the vote on legal grounds or arguing violence may be too contrived to work in his
favor.

In the end, the surge in the NO is something more than just the reform
proposal. The original Constitutional reform proposal by the President had
sufficient illegalities in it to make it questionable, but then the National Assembly
made it look even worse with the addition of 32 more articles and  a number of transient reform (which by the
way will not be voted on). Add to this the widespread shortages of basic
staples, inflation and the aggressive style by the Government and many people
are getting fed up with the unrealized promises of the revolution.

In the end the Government has forgotten the reform and turn the vote
into a plebiscite, it has become “YES with Chávez” as a way of trying to revert
the trend. He is an extremely good campaigner and will throw all of the power
of the Government behind the SI votes in the last few days. Unfortunately, the
same rush to vote that he thought would work to his advantage, may in the end
work against him as even a slim advantage will more likely be a defeat for the autocrat.

Forced to post lighlty

November 21, 2007

I continue to have system problems and will have to reinstall but need a code and they have yet to send it to me. Posting will be very light if at all during the Thanksgiving holidays, the pc is literally hanging by a threat to stay alive so I prefer to have it off so that it survives in the week leading up to the referendum. Things have been relatively quiet with Chavez abroad. There seems to be a war of polls with all saying the No is ahead, which I still don´t believe and the Government denying one poll, from its favorite pollster is true. We shall see…

Chavez, Ahmadinejah and pricing oil in dollars: Does it really matter?

November 18, 2007

We have all caught the controversy at the OPEC summit as to whether oil
should or not be priced in dollars. The controversy led by the
President of Venezuela and the President of Iran was left out of the
conclusion of the meeting, with Saudi Arabia refusing to consider the
issue.
 
I have actually wondered about this issue
quiet a bit and have read many opinions abut the subject to make sure I
understood it correctly and the answer seems to be that in reality it
matters very little whether oil is priced in one currency or the other
in the medium term, what matters is what currency oil exporting
countries are paid in and what currency they keep the proceeds in.
 
Whether
oil is traded on one currency or another is simply a matter of what has
been traditionally done in pricing the commodity. But the price of the commodity itself
has to do with the relative value of oil for the importers, supply and
demand, and its value is balanced by the movement of currencies. For
the US oil has gone up much more simply because in real terms, while
oil has gone up, Europeans for example, have seen it go up less due to
the appreciation of the euro with respect to the dollar. Traders
instantly go from one currency to another and determine how much a
barrel of oil is worth and that is what really matters.
 
What
really matters then, is what countries do with money received from
their oil exports. There are two very simple examples to this:
 
Case
1) Imagine the oil future markets announces today that all of oil will
begin trading in euros tomorrow. (A difficult proposition, OPEC could
set up an alternate market in euros, but let’s assume the extreme) In
reality, nothing will happen tomorrow, maybe a small psychological
downdraft on the dollar in the currency markets, but oil tomorrow will
begin trading at Friday’s close divided by whatever the euro rate of
exchange is at the opening.
 
Case 2) Imagine
that the oil exporting countries tomorrow announce that they will get
rid of all of their dollars and convert them to euros. In this case,
the dollar will suffer a huge drop tomorrow, which will have a strong
impact on the price of oil and that impact will be much larger than
changing what the futures markets do in Case 1).
 
Thus,
what really matters is what countries that hold the dollar reserves due
to oil exports do with their money. So the proposal the Iranian and
Venezuelan Presidents should have made, but couldn’t because it is none
of their business even if they understood the issue, is that OPEC
countries all decide to hold their international reserves in euros.
 
What
is interesting is that both Venezuelan and Iran seem to already have
done that, Chavez claiming it has switched most of Venezuela’s reserves
to euros and Iran reportedly having 85% of its reserves in currencies other than the dollar.
 
In
the end, countries should make of this a dynamic process, they should
not be making bets on whether the euro or the Yuan are going to
appreciate or not, that may be trading or close to gambling, but make a
rational evaluation of what the terms of trade for each country’s
economy is. That is, determine the various relationships each country
has in terms of trading partners and investments and then set your
reserves to a basket of currencies that best matches that. In this
manner, if currencies change there is no real economic impact on your
reserves.
 
The only real significance in having
oil trade in US dollars that is important to the dollar is that clearly
if you enter into an oil futures contract in dollars, during the life
of that contract, the amount of the contract is locked in to the US
currency. Thus, the amount traded in the oil futures market is in some
sense not available to be switched into euros and thus provides a
temporary stabilizing factor on the value of the US$. You could of
course, also hedge your currency buying a futures contract to preserve
the value of your future in the currency of your country.
 
Because
in the end, both President Chavez and Ahmadinejah are acting on their
political beliefs and the limited timing they have had as
“President-traders” in which the euro has done nothing but revalue
itself against the US currency since they have been Presidents. But
these things come in swings and the euro may be close to the end of its
run. Simply stated, it is the Asian economies that have become more
important in the world, not Europe. Europe has, in my opinion, economic
problems as important or significant as the US. Unemployment is worse
and its competitiveness vis a vis the US is diminished. Nevertheless,
the euro has revalued quite a bit, while Asian currencies have not
revalued as much because the Government’s of many Asian economies exert
some control on the exchange rate. But that is exactly the way Asian
economies have dealt with the increase in the price of oil: They have
revalued their currencies in order to reduce the impact on internal
inflation of oil imports.
 
There is additional
evidence that the euro has gone too far. Real State prices in Europe
are really getting out of whack. Apartments in downtown Stockholm go
for 14,000 euros a squared meter, in Madrid its 10,000-14,000 euros per
square meter and in Amsterdam, real state price recently hit its highest level ever adjusted for inflation,
reaching the equivalent value it had in 1736, destroying the myth that
real state always go up in real value and proving the wisdom that in
investments all we know that in the long term, we are all dead.
 
For
comparison, I just found in a website an apartment in Park Ave in
Manhattan that came to around US$ 6,000 per square meter, close to
Moscow prices (which are only slightly lower than New York) than to
those of large European cities.
 
This discrepancy
suggests that while the euro may be going up for little while, this has
little basis on fundamentals and the discrepancy is getting too large
to stay that way.
 
Thus, the President’s of Iran
and Venezuela, if they really understand the problem, are simply
playing with politics. And in the end, if the euro corrects, they may
be playing with fire, as this will severely undermine the international
reserves of both countries. Curiously, the two countries seem to have
very similar economic problems, perhaps because everything is done in
the name of politics and not on the rationality of economic thinking.

More Governments seem ready to join the King of Spain in telling Chavez to shut up

November 17, 2007

The above cartoon from a Spanish newspaper with the whole globe telling Chavez to shut up seems to be getting close to reality To wit:

1)US and Saudi authorities were mad at Chavez partnering with Iran to ask that the dollar no longer be used as the currency of choice for a barrel of oil.

2) The King Of Saudi Arabia opposes using OPEC for political activism as suggested by Chavez.

3) Chavez is demanding an apology from the King of Spain, which he will not get as opposition party Popular is saying the Spanish Government has been weak so far with Chavez.

4) Chavez violated Saudi law when he crossed himself during the Summit as well as naming Christ a few times. In the translation, Christ became the “prophet”

5) In Brazil, opposition groups not only are criticizing President Lula Da Silva for his support of Chavez, but are preparing a motion backing the King of Spain in the spat.

6) Colombian President Uribe reminded Chavez that he should not confuse saving the hostages in the hands of the FARC with a peace treaty with the FARC and warns he will have FARC leader Marulanda killed if he comes out of hiding..

Follow

Get every new post delivered to your Inbox.

Join 11,241 other followers