Archive for March 4th, 2009

How much money is there in Venezuela’s development fund FONDEN?

March 4, 2009

The question as to how much money is available in Fonden for the Government to use has become the 64,000 dollar question and it is something one can only answer once or twice a year and even then, it is almost impossible to answer it with precision.

The last time we saw a financial statement for Fonden was June 30th. 2008, in the webiste for the fund. Since then, this statement has disappeared and reappeared, but no new information has been available. Then in November we heard the fund had like US$ 8 billion and in the last two days we heard the Minister of Energy and Mines say twice, with a straight face, that the fund had US$ 57 billion. Showing how little Ramirez understands numbers he said Venezuela was “privileged” to have saved US$ 57 billion in the fund.

It turns out, no such luck, Venezuela has put into Fonden a total of US$ 57.4 billion over the last four years, but most of it has been spent, as described in the “Memoria y Cuenta” presented to the Venezuelan National Assembly on February 27th. 2009.

This document does not reveal much, it is not even known if the numbers are audited, but this is how I interpret what it says:

As of December 30th. 2008, Fonden had US$ 6.07 billion in investments. This is what is available to give away. However, this is 73.24% in short term investments or US$ 4.44 billion. Additionally it had 26.76% or US$ 1.62 billion in “medium and long term bonds and structured notes”, read structured notes and Argentinean bonds purchased at 65% of their face value, today well under it.

Nowhere in the description does it say whether these are market values or invested values or face values. I suspect that these are either values at which they were purchased, which implies, the market values are much smaller. I will assume 50% for both. This then says that Fonden had as of Dec. 31st. 2008, around US$ 5.25 billion, but it would be a bad move at this point to sell either the bonds or the structured notes, so this is there, but can not be used.

If one then adds to this the US$ 12 billion given to Fonden in January, Fonden has between 16.4 and 17.25 billion dollars of which only the lower number is available for expenditures.

And forget about Ramirez’ “savings” of US$ 57 billion…

As simple as that.

Chavez expropriates Cargill, threatens Polar Group

March 4, 2009

And in another funky, groovy episode of the clueless revolution, Hugo Chavez announced tonight the expropriation of at least part of the Venezuelan operations of Cargill, the US based food producer. Even the announcement was unclear, as the President did not specify if this applied only to the rice facilities of the company.

And taking advantage of the moment, Chavez also threatened Venezuelan Grupo Polar with expropriation of all of its plants, because, imagine that, the company sent lawyers to challenge Chavez’ decisions. How could they challenge the natural law that says Chavez can take over anything he wants?We seem to be going from autocracy to Dictatorship fairly fast.

While I have not had time to talk about the “intervention” of the rice plants by Chavez, as well as a new decree which regulates what you can and can not produce, it is all based on the concept of “public utility” approved in the 26 laws withing the Enabling Bill. This same concept was voted as part of the 2007 Constitutional Reform referendum which was not approved, despite which Chavez issued laws that covered the same topics…

Thus, Hugo Chavez is once again violating the country’s laws and the Constitution but some fools abroad still will claim this is a democratic Government. As usual, they back, what they would consider outrageous and a violation of liberties in their own country.

So, please, go do a revolution in your own country and don’t come defending Chavez’s actions.

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