Friday, August 29, 2014

Chavismo promoting CITGO sale tells us more than what we care to know

Of course, I could regale you with further tales of corruption and economic failure. But this blog is not that much about information these days, rather about the wonderment of being the deer in the headlights while been aware of it. My personal and my work situations are such that adequate information search is a luxurious time element I cannot afford anymore. Besides, where to look for reliable information, numbers? With El Universal gone, Tal Cual with resources too limited for investigative journalism and EL Nacional a near paperless semi shrill...

Then again Miguel has published two superb posts, one about the $$$$ magnitude of the racket of gasoline at the border which explains why so many are "against" a gasoline price increase; and another one about how the regime is unable to decide anything, not even starting to print paper money with numbers according to inflation.
Of course my dearest friend does not have to stand in line for medicine or food like I do, so he can mine for this valuable data. But what he may miss is the realization that the political personnel of the regime may be worse than what we may have thought all along. Such epiphany can only be reached when after one hour or two of line under the sun you reach the shelves only to realize that the items finally run out, no matter what was the rationing imposed by the store.

Here I am not talking about the latest luminary, a certain Mendez who has taken upon himself the task of promoting finger printing as the solution to food scarcity. He is a mere idiot used as a mouth piece, too young to have done much damage yet but with, oh, so much potential for dereliction.

No, no. Reading a piece form El Mundo on CITGO was quite an eye opener even for someone as blasé as I am. The journalist was reporting on Venezuelan officials finding it a good idea to sell CITGO before Venezuela loses lawsuits that may result in CITGO being embargoed (1). Of course, the astute readers of this blog will notice that if CITGO is an easy embargo to do in the US, there are plenty of other ways in which the winners of the law suit will be able to recover their due, if anything by blocking Venezuela's ability to raise money for further debt. Thus already you know that the people that I am going to name next are outright scum and/or idiots.

The first one to give his opinion was Jesus Faria, a true communist, that saw inside the PSUV more opportunities to express his true self than in the Venezuelan Communist party, which, believe it it or not, is more serious than the PSUV. For him, who is the vice president of the parliamentary committee on finances and economic development, the US will seek revenge by taking CITGO after the trial is decided. That is, for him, separation of powers is a non concept in the US, the tribunals will merely decide what OBAMA and Wall Street want.

Can we blame Faria to think that way? After all, it is exactly the way justice operates in Venezuela today when Maduro or Cabello announce publicly the expected judicial decisions for a given trial. Never mind that there is even legal "justification" coming from nothing less but the mother in law of Ramirez, oil minister now for years. Hildegard Rondon for all practical purposes said that it could be considered criminal for a Venezuelan lawyer to defend a US company being expropriated in Venezuela. Since that expectoration the ex justice of a democratic Venezuela has gone further to caution the regime's judicial aberrations by uttering bigoted comments about the "anglo saxon" judicial system, and that state should prevail against individual, a basic tenet of totalitarianism. Of course, she is on PDVSA payroll.

And it turns out that Ramirez was the second official quoted in El Mundo. And that quote deserves transcription: "assets outside the country are virtually hostage of other jurisdiction and pay taxes in the US". Huh? Is Ramirez saying that US assets in Venezuela should be hostage to Venezuela's system? That US assets in Venezuela should not be paying taxes in Venezuela? Please............

The next Illuminati is Roger Cordero a representative of Lara state who can only manage 251 followers in Tweeter when it is well known that all chavistas have gazillions followers as they follow and re-tweet each other all the time... rarely having an original tweet of their own... Cordero is the vice president of the committee for oil industry, arguably the more important in Venezuela. More bluntly than Faria he is certain that the US cannot wait to seize CITGO (note, they never mention the companies suing, for them it might as well be Obama). Full of chutzpah Cordero says that Citgo fate will be consulted with "el pueblo" of course, even though the regime has ruled out a referendum on the matter...

Now, I know that these people are brain washed, that they act in bad faith, that they are trying to save their ass and what have you (selling Citgo merely because the regime is flat broke).  But at some level I expected that people at these positions said such stuff for the chavista lumpen they serve, albeit saving for themselves some doubts, or at the very least having a faint idea why people outside of Venezuela were pissed at them. After all, they are always upset when Venezuela is not taken seriously outside, so one would imagine that.... But I am afraid I am wrong. I trust you will concur with me when I suspect that no, these people are truly fully self righteous, that no matter how much damage they inflict on other people they feel justified in doing so. Amen of their incapacity to understand what those problems are all about. When I think about the 4 individuals named above I cannot help but to think about the words of true totalitarians when eventually they reached trial, their stunning inability to perceive the evil they did.

And this, my friends, is truly nightmarish. Not only because of the damage these people can still inflict on us, but at the daunting task that rebuilding the country will be, at the amount of people that we are going to have to bring to trial. I thought that bringing to trial a couple dozen people like Ramirez would be enough to make a point and proceed with "reconciliation" and rebuilding the country. But I am afraid that I need to revise this number way up, that our Nuremeberg version will require sitting on accused bench a dozen of hundreds.

1) Years ago Citgo was bought by the Venezuelan state oil company. The objective was to fit them to the heavy crude qualities of Venezuelan oil and thus insure a stable market for Venezuelan oil no matter what the price of oil was.  Certainly Citgo is a US company on a legal point of view but any after tax benefit can be repatriated to Venezuela as needed, or invested in the US to expand its reach and thus import even more Venezuelan oil.

The fears of the regime are of course due to Chavez arrogance who decided to expropriate developing oil interests in the very heavy crude of the Orinoco belt. This has been a disaster because the regime refused to understand that the heavy investment made in the Orinoco mean these US companies had to bail out of other places on earth where they could not return as easily. As such their loss cannot be quantified merely on how much equipment was seized on the ground when the Nazional Guard took over. Hence the never ending law suits that are going to cost us a bundle, maybe the future of half a generation of Venezuelans.

But chavismo of course is not ready to admit what a piece of shit Chavez was. Yet.


  1. Charly3:49 PM

    Interesting comment by Marianella Salazar yesterday on Reportero24 ( She claims they want to sell CITGO to make money, part of which will find its way to increase the refining capacity of Cienfugos that can process Venezuelan sulfur laden crude. Those Chavistas have already sold their country to those two drooling half corpses in Havana. Would not surprise me one bit

    As for a Nuremberg style ending, we can always dream. The opposition will never get back in power under present circumstances, just look for Zimbabwe for an example. If they eventually do, they will have agreed before hand to bury the hatchet, no Nuremberg judgment. I will stop commenting at this point, after all you already had me censored twice.

    1. Island Canuck5:24 PM

      "...part of which will find its way to increase the refining capacity of Cienfugos that can process Venezuelan sulfur laden crude. "

      Very unlikely. 8 to 10 billion would disappear in minutes just catching up with part of what they owe in past due debts.

      It would be the right thing to do but it won't happen.

    2. Charly

      Censored you twice? I remember once because your words would put me in trouble! Remember that now they are even searching cybercafes from where anti Maduro texts go out on Tweeter! You surely do not want the last blogger inside Venezuela to be forced to live or go to jail, no?

      As for the second one, no idea.

    3. charly4:33 AM

      Daniel, you remember the second one. On the first one I even posted an apology that was accepted,you are magnanimous.

  2. I wish somebody in Venezuela (not necessarily you but one of those luminaries, those economists or financial experts in the government or in the opposition) would evaluate the regime's option of default (temporary) for the purpose of enabling the emergency importation of medicines and medical equipment to save the lives of thousands, perhaps tens of thousands of Venezuelans at risk right now.

    It's the only moral choice and pragmatic too in the sense that if the regime decides to default and Venezuela's debt becomes junk, the market right now is so hungry for yield that the credit downgrade would not block Venezuela's access to credit. It would only make it more expensive, yes. But not block it entirely...

    I can only imagine that a desire or acceptance of collective punishment has taken hold of Venezuelans. Collective punishment in the form of rationing, lack of medical care and crime. Venezuelans must be thinking that they somewhat deserve it (or the other half of the population deserves it)...and that is a mindset that might make mass slaughter possible in the future, if you ask me...

    1. This comment has been removed by the author.

  3. Anonymous6:36 PM

    The US will never allow the sale of Citgo to go through they will either freeze the sale proceeds or block the sale all together. The government of Venezuela is turning over all rocks looking for enough money to get through next years elections by maintaining current programs. Remember part of Castro's books is going a number of years under his style of government and it will be accepted as the way it is. The serious opposition will have left the country, jailed or given up the fight and the masses will accept it as the way of life that they cannot change. The underground ground swell needs to get the lazy poor off their asses and irate at the gov't to the point of revolt in the coming year(s) before it is ingrained and accepted. The opposition as a party publicly already has been neutered and is not a way out of this mess. Either those that care find an underground way to move the masses or Cuba 2.0 is the future of Venezuela.

    1. Or they get Castro´s government out of business in Cuba. This requires cooperation from the Cuban community in the USA, and the Canadian and European Union governments, which I don´t think will be forthcoming. I think it´s a lost cause. Bravo Pueblo has joined the slave ranks.

  4. Daniel, many years ago I participated as an aide within a team dealing with a claim against the Iranian government. Based on what I learned at the time, the claim is prepared using the projected cash flows from the seized property.

    The cash flow estimates use the proved and probable reserves. The production estimate is prepared using a third party petroleum engineering consultancy. This consultancy in turn relies on the market prices prevailing at the time the property was seized to estimate well and other costs.

    The operating costs are projected forward by another consultancy with experience in the field, which can deliver a comparison of projected costs with the property peers. The oil price forecast is prepared using a market analysis which considers the oil quality and other factors. Taxes and commercial arrangements are as defined by contracts and agreements. The overall cash flow projection is carried out by another consultancy. The claim´s present value is estimated using a discount factor, which in this case could be the interest rate of US bonds at the time the claim is filed.

    As you can see a large claim involves a lot of expenses, with very high quality consultants providing most of the products used to back the claim. At no time that I remember do the companies claim lost profits from investments they couldn´t make elsewhere.

    Under most nation´s laws ExxonMobil and ConocoPhillips have the ability to file for motions to freeze assets. When we filed against Iran we recovered our money from Iranian assets frozen by the USA.

    I´m not sure about current law, but I think the order freezing assets can be issued by a court if the claim seems solid and is proceeding towards closure within a reasonable amount of time. I would expext ALL the claimants to look for such an order later this year. But I don´t track these cases closely.

  5. The arrogance and the ignorance theory, although I used to hold those theories myself to explain the behavior of Chavismo, but now, however, I am exploring the "point-of-no-return" principle that Chavez once espoused as the immediate goal of his revolution. That is, that the revolution must move to a point where the revolution becomes "irreversible" and cannot revert back to capitalism. Maybe, trashing the economy, destroying the democratic institutions, perverting the military and judiciary were to performed that task?

    To reverse the revolution, it will require removing and reversing so many perversions and do so completely and immediately before private enterprises will be able to return and rebuild. As long as the AN, TSJ, BCV, military, etc. or any one of them remain loyal to the revolution, there it is unlikely that the revolution can be reversed quickly enough for any leadership to survive politically. Chavez won!

    1. If there is any hope, it would be an utter indisputable failure of the revolution and total disillusionment. If that could happen, it would not take very long to rebuild! I'm thinking about the recovery of the South from the US Civil war. Many people had lost everything, but then they started fresh! There was an economic boom just from the sheer need to rebuild. So much of the crisis in Venezuela is from the paralysis that Chavism has created!

  6. Daniel: is it true that China is sending whole villages of Chinese people and financing them with visas (5K for a visa for a typical family) and money to buy businesses (e.g. I understand the Chinese entrepreneurs have slowly but surely bought up most of the egg and chicken production in Venezuela). In other words, the Chinese are colonizing the countryside, especially rural areas. Have you seen any of this? People in Venezuela have told me this.

    1. I was going to buy a hacienda until I was told that malandros frequently target them. Also, private ownership has no protection. Do Chinese have special protection? Nothing surprises me. One thing for sure, however, the prices are so low that they are a steal!

  7. You say that " information search is a luxurious time element you cannot afford anymore".

    I would be interested in your day to day struggle. You can hide the names and circumstances to protect the not so innocent but that type of info is something that would expose the effects of the gov mismanagement at the micro level to us people that are not there. Plus it would give you a way to vent.

    1. Anonymous5:00 PM


      I think the same.After awhile the workings of the mafia are quite predictable but do not give a clear picture to outsiders exactly the nature of the consequences of these workings in Venezuela and don't shine a light onto the ways in which the common man unwillingly or willingly contributes to it.

      Until the people see that, I see no hope.I talk to some of my friends who tell me that life is still good there, and that they much prefer it to the hard life here in the US(so understandably I feel little sympathy in these cases)...and then there are a few who say life there is hell...Nobody is able or willing able to give a more composite view for the world to understand.This is a topic that many of us are discussing here all the time...some people have lost interest in the Venezuela problem after seeing so many Venezuelans come here to live ,and stay for a few years only to return to Venezuela , complaining that they miss their maids, their clubs, their vacation days etc.....

      Data and selected facts have to be combined with more in depth, subjective communication.



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