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.

#OPEC Venezuela Ramirez storms out red faced. Looked furious.
— Andrew Critchlow (@baldersdale) November 27, 2014

Why? There, in two tweets.

Carta abierta a Rafael Ramírez y SU Micomandantepresidente

Asunto: racionamiento de gasolina.

Con ese cuchillo de palo no nos van a cortar. Si hay algún de los problemas de Venezuela en donde se pueden identificar precisamente a dos culpables, esos dos son ustedes, el presidente y su alcahuete en PDVSA. ¡Coño!, Ni a Giordani le podemos achacar mucha de esta culpa, por más que queramos hacerlo. Por si no lo saben, o no lo quieren entender, les voy a explicar las razones por la cual hoy en día hay que racionar/aumentar/importar/lo-que-sea la gasolina.

• El que dijo que bajo su gobierno no se iba a aumentar la gasolina fue micomandantepresidente. Ahora, después de 12 años, de un sinfín de devaluaciones, de una inflación creciente, no le queda sino atragantarse con esas palabras, como un pendejo.

The truth on Venezuela's oil production

One of the biggest mystery of Venezuela under Chavez is how much oil money do we really get and what he does with it. Since 2003 the estimated numbers from international agencies and those published by the PDVSA monopoly have always clashed, badly at times. Indeed, the PDVSA numbers are only held truthful by chavistas, the rest of the world, including OPEC, has long ago ceased to pay much attention to the numbers published by a company that has not submitted itself to a real audit since it left the SEC (not that the 2003 audit was anything to write home about).

But I digress. Simon Romero of the New York Times has published today a comprehensive and definitive article which speaks VOLUMES about the real situation of PDVSA. It includes:

- rumors that CEO Rafael Ramirez wants to bring back PDVSA to its real business: oil production (Imagine that! Ramirez realizing that selling chicken in markets popular markets could be done better by other folks than PDVSA!)

- a reopening of Venezuela to the hated capitalistic companies that were kicked out as recently as 2007. (Wait a minute! Where those companies not replaced on occasion by Vietnamese, Belarus or other well known oil companies? Were they not as efficient as, say, Exxon, in prospecting for oil fields? Have we been lied to? Naaah!...)

The unavoidable conclusion is that things must be going South for Chavez that he discretely seeks reconciliation to those he abused a year ago. The difference a Wall Street crash makes, no matter how many times Chavez claims that Venezuela is not threatened by the world crisis.

The Romero NYT is a must read. Though you will not escape a couple of killer quotes below:

At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.

But Venezuela may have little choice but to form new ventures with foreign oil companies. Nationalizations in other sectors, like agriculture and steel manufacturing, are fueling capital flight, leaving Venezuela reliant on oil for about 93 percent of its export revenue in 2008, up from 69 percent in 1998 when Mr. Chávez was first elected.

Or as we say in Venezuela, tanto nadar para ahogarse en la orilla (so much swimming to drwon reachign shore).

It is amazing that after 10 yers of bolivarian farce we find ourselves more dependent on oil than AT ANY TIME in our history. I wish Simon romero had followed his logic to the end and added this.

The end

Rogues gone bust

This delicious title for a Washington Post Editorial deserves a full publication below. ¡A cada cochino le toca su sabado!

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U.S. adversaries were delighted by the economic crisis -- until it affected the price of oil.

A few weeks ago, the leaders of Russia, Iran and Venezuela were gloating gleefully that the financial crisis would depose the United States as the world's leading power. Yet as the price of oil dropped below $65 last week -- or less than half its peak price last summer -- it was looking more likely that global economic turmoil would produce a quite different result: the substantial weakening of those countries' challenge to U.S. interests in Europe, the Middle East and Latin America.

Unless oil prices quickly recover, Venezuela's Hugo Chávez and Iran's Mahmoud Ahmadinejad are likely to face even tougher domestic economic challenges in 2009 than the next U.S. president. According to independent estimates, both countries need an average oil price of up to $95 a barrel to fund the populist subsidies and social programs they have launched in recent years -- not to mention billions of dollars in arms purchases from Russia. Venezuela has been furiously importing food to fill empty shop shelves, while Iran heavily subsidizes domestic fuel. Even if Mr. Chávez and Mr. Ahmadinejad manage to continue those politically sensitive programs, they may find it harder to sponsor foreign clients -- from Hamas and Hezbollah in the Middle East to Cuba's Castro brothers. Already Mr. Chávez has stiffed Nicaragua's Daniel Ortega, to whom he had promised a $4 billion oil refinery.

Though somewhat less reliant on oil revenue, Russia may be even worse off, because of its dependence on foreign investment. The Russian stock market has dropped more than 70 percent since last spring, and Prime Minister Vladimir Putin has had to commit more than $200 billion of the country's reserves to shore up banks. In the past several years, Mr. Putin has several times interrupted energy deliveries to European clients to make political points; he may have less financial leeway to wield that weapon in the future.

Will the decline of revenue lessen the hostility of these regimes toward the United States? There are some intriguing early signs. Russia unexpectedly announced last week that it would not oppose an extension of the U.N. mandate for U.S. troops in Iraq. Though it has refused to rein in its nuclear program, Iran has at least temporarily curbed Hamas, Hezbollah and the "special groups" of Iraq, which in recent months have all but ceased attacks on American and Israeli targets.

Mr. Chávez was notably disturbed when both Barack Obama and John McCain pledged in their final debate to eliminate U.S. dependence on Venezuelan oil within a decade. The caudillo quickly appeared on television with an appeal to the candidates that "instead of saying that they are going to free themselves [of Venezuelan oil], what we have to do is sit down and talk and come to an agreement because we need each other." Is that the "Bolivarian revolutionary" suddenly seeking rapprochement with "the empire?" If so, it may not be the last such offer that the global economic crisis delivers to the next president's desk.


-The end-