Friday, November 28, 2014

The road from Deadend to Rockbottom passes through Deadbeat & Co. Caracas'offices

Well, my friends, it seems that this time we got what we saw coming. Well, some of us saw it coming long ago but that is a small consolation.  I am going to give you a few of tweets from The Telegraph covering the latest OPEC meeting.

First, Ramirez reaction to the meeting's results.


Why? There, in two tweets.



and the real meat


Translation: My "dollar today" app has been updating its "cucuta" currency more often than usual and last time I checked it was 149,73 Bs. for one single US dollar... For memory I was writing last Wednesday a horrifying post where the USD was still at what would be today a balmy 137.... Venezuela has to be the only country in the world where there is a run on its currency and the government does not notice.

Real Translation now: Ramirez left red faced because 1) he finally realized that Venezuela has lost any influence in OPEC, or the world for that matter; 2) probably someone at the meeting told him that the OPEC was not there to solve the mismanagement problems of Venezuela, that if the Middle East producers had been able to create sovereign funds of billion dollars, why did Venezuela not do the same? 3) because Ramirez, of all people, knows where the wasted money went and he knows that at the OPEC meeting they all know he knows; 4) because Ramirez has to go back to Venezuela with the good news that we are bankrupt and that it will take too long  for prices to go back up enough for the regime to survive in its current state; and finally 5) Ramirez knows that when real history books are written his name will go down in infamy as perhaps the single worst offender after Chavez, the one that destroyed willfully Venezuela for ideological reasons, personal resentment and what not. Then again Ramirez may be too far gone to realize, yet, #5.

To conclude fast this post, since I feel more like crying than writing, let's just say that the crows have come home to roost, that we are now all but officially bankrupt, that 2015 will have a truly major economic crisis and that the only hope the regime has to survive is brutal repression, of the kind that leaves hundreds of death. And not necessarily opposition deaths as many of today's chavista will feel hungry soon.

Of course there are solutions to attenuate the damage and avoid the worst; but the regime cannot take them. That will be for another post, once I regain some composure.

PS: from a second article of Critchlow we get the following, say, money quotes:
But in too many cases throughout Opec’s turbulent history this vast oil wealth and control of the world’s primary fossil fuel energy source has been abused, simply to support regimes with, at best, questionable political legitimacy and, at worst, the brutal juntas of despots such as Colonel Muammer Gaddafi, Saddam Hussein and Hugo Chavez.
Oh dear....

Added later, courtesy of @MonseTalleyrand




14 comments:

  1. Island Canuck1:26 PM

    Daniel, the expresion "that the crows have come home to rest" is correctly "the crows have come home to roost"

    http://idioms.thefreedictionary.com/come+home+to+roost

    The outlook for January / February is disastrous, especially here in Margarita.
    The ferrys will be full of tourists not trucks.
    Also consider that many producers, parts stores & services historically shut down from Dec. 15 to Jan. 15 and need until mid-Fevruary to get distibution running again.

    It's going to be a disaster!!!!

    ReplyDelete
    Replies
    1. correction done! thanks!

      Delete
    2. Anonymous1:39 PM

      Better yet, makes that Chickens have come home to roost ... but the essence does not change a catastrophe by any other name ...

      Delete
    3. Most correctly it should be: "The domestic poultry have acquired advanced GPS devices and are inbound bearing 00.00, they look to sit quietly on arrival"

      Delete
  2. Boludo Tejano2:14 PM

    Venezuela Ramirez storms out red faced. Looked furious.

    Which goes very well with a Chavista red shirt, does it not? Quite the fashion statement: red faced with red shirt. Rojo, rojito. And so forth.

    My "dollar today" app has been updating its "cucuta" currency more often than usual and last time I checked it was 149,73 Bs. for one single US dollar..
    The rate of 147.93 Bs per dollar reminds me that the peak oil price, in 2008, was around $146/bbl. Strange coincidence of numbers in the 140s.

    But in too many cases throughout Opec’s turbulent history this vast oil wealth and control of the world’s primary fossil fuel energy source has been abused, simply to support regimes with, at best, questionable political legitimacy and, at worst, the brutal juntas of despots such as Colonel Muammer Gaddafi, Saddam Hussein and Hugo Chavez.
    While Hugo Chavez was nowhere near as brutal as Gadaffi or Saddam, he had no problems supporting them. At one time another English language blog on Venezuela featured on its home page Chavez quotes supporting such despots as Gadaffi or Saddam. But today, so what else is new?

    ReplyDelete
  3. Anonymous8:46 PM

    Quick notes

    1) It appears the budget being balanced at $60 is a TOTAL lie?

    2) Who in their right minds even believes venezuela ITSELF would significantly reduce production to drive a price increase? Venezuela (in comparison to other OPEC countries) has basically no $$. You need $ in the bank to make the trade of short term production reductions for long term price increases.

    3) If a budget deficit develops ($60 a lie), then first external debt goes up, then asset sales (citgo etc) then more internal borrowing etc. Venezuela may limp along a bit. Inflation could get a bit crazy though.

    4) What's incredible is given the amount of NATURAL wealth venezuela can simply pull out of the ground, if venezeula had a functioning economy and democracy, it would be a HUGE power. It seems almost impossible the economy can get THIS messed up!

    ReplyDelete
    Replies
    1. Island Canuck7:53 AM

      "2) Who in their right minds even believes venezuela ITSELF would significantly reduce production to drive a price increase?"

      Part of the problem has also been that they lie about the level of production.
      They have no room to lower an already paltry real world production.
      They need other better organized countries to lower theirs.
      Good luck with that.

      Delete
  4. Or will the Chinese step up again to protect their resources? Many of us have been praying and predicting the collapse of this regime for almost 15 years but they seem to find ways to keep on ticking.

    ReplyDelete
    Replies
    1. There is also that thing about throwing good money after bad. Chinese are not known to be good at that game....

      Delete
    2. But they do play long term. Venezuela is still a good long term bet for China.

      Delete
  5. And Daniel it appears you won't depend on the Cucuta exchange rate much longer as Maduro introduces exchange rate number four (the black one)

    http://www.reuters.com/article/2014/11/28/venezuela-economy-idUSL2N0TI0Q720141128

    ReplyDelete
  6. Anonymous10:36 AM

    Actually, RR has some reason to be outraged at OPEP, since the regime has been supporting oil prices by restricting supply for many years, if through stupidity, inefficiency, corruption, and ideology.

    If Venezuela had actually developed the 5 million barrels capacity by 2012 has they promised since forever then he would have had leverage at the meeting last week.

    My advice, never show up at a knife fight only holding a banana.

    Lazarus

    ReplyDelete
    Replies
    1. Boludo Tejano2:43 PM

      Your point about Venezuela's many failed predictions about increased oil production is well taken. Since Venezuela doesn't have any production it can hold back in an attempt to increase the price of oil, without risking starvation throughout the country, it has, as you have so wittily stated, brought a banana to a knife fight. I doubt even a plátano would be of any assistance in this fight.

      And if Exxon-Mobil's interest in the heavy oil belt had not been confiscated, what would Venezuela's daily oil production be now? Pero tenemos patria. Socialismo o muerte. Es decir, socialismo es muerte.

      Delete
  7. One day now makes a difference.
    154 Bsf to 1 USD
    WTI is at $66 which means that VZ is around $61. Oops.

    ReplyDelete

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