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description= 10 posts published by moctavio during September 2009;
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chavez, the, to, by, blog, blogs, new, 101, or, and, one, economic, plan, you, devil, excrement, archive, for, september, 2009, unknown, feed, subscribe, via, email, categories, all, miguel, octavio, blogroll, venezuelans, recent, posts, archives, pages, meta, stats, bonds, part, ii, looking, good, did, government, blink, releasing, julio, rivas, we, have, bond, two, issue, defends, praises, mugabe, it, takes, know, hugo, socialist, fascination, fixation, with, banks, an, random, decision, making, night, escape, from, realities, of, our, poor, country, show, off, style, hurts, venezuela, both, ways, venezuelan, oil, exports, usa, say, want, revolution, non,
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the (446), that (143), and (142), not (62), #chavez (58), this (57), have (57), for (56), will (56), but (55), was (49), you (48), #venezuela (46), has (42), would (35), are (35), government (34), bonds (32), may (31), there (31), with (29), 2009 (28), which (28), september (27), all (26), even (25), more (24), been (24), billion (23), some (22), from (21), 000 (21), oil (20), they (20), than (20), get (20), bank (19), them (19), market (19), can (19), one (18), only (18), these (17), people (17), had (17), were (17), his (16), october (16), march (16), hugo (16), swap (16), august (15), november (15), january (15), february (15), april (15), plan (15), like (15), thus (15), december (14), june (14), july (14), money (14), bond (14), when (14), because (14), banco (14), price (14), comments (13), 2003 (13), 2004 (13), 2008 (13), time (13), venezuelan (13), around (13), today (13), then (13), years (13), yield (13), 2005 (12), 2006 (12), 2007 (12), 2010 (12), 2011 (12), 2012 (12), 2013 (12), 2014 (12), 2015 (12), end (12), part (12), what (12), could (12), well (12), those (12), banks (12), about (11), give (11), country (11), pdvsa (11), too (11), last (11), posted (10), does (10), just (10), world (10), true (10), few (10), its (10), did (10), good (10), much (10), dollars (10), rivas (10), other (9), another (9), 2016 (9), something (9), new (9), decision (9), week (9), buy (9), 100 (9), now (8), del (8), him (8), year (8), make (8), economic (8), think (8), next (8), most (8), issues (8), such (8), after (8), want (8), day (8), idea (8), where (8), made (8), devil (7), high (7), your (7), down (7), seems (7), out (7), political (7), any (7), while (7), rate (7), given (7), both (7), sell (7), higher (7), anything (7), keep (7), said (7), off (7), announcements (7), project (7), announced (7), debt (7), means (7), sold (7), everyone (7), pay (7), first (7), making (7), two (7), put (7), order (7), jail (7), excrement (6), 2002 (6), why (6), change (6), back (6), 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problem (4), 200 (4), markets (4), guess (4), according (4), simply (4), lower (4), rather (4), makes (4), projects (4), belt (4), great (4), within (4), since (4), each (4), lots (4), produce (4), barrels (4), came (4), gas (4), used (4), through (4), way (4), jailed (4), malaria (4), over (4), america (4), ago (4), truck (4), allow (4), our (4), poor (4), look (4), clearly (4), merentes (4), rodriguez (4), margarita (4), here (4), fascination (4), loans (4), summit (4), drop (4), created (4), curve (4), orders (4), bolivars (4), range (4), strike (4), movement (4), julio (4), view (3), log (3), wordpress (3), doesn (3), course (3), excremento (3), diablo (3), caracas (3), miguel (3), orchids (3), receive (3), positive (3), watch (3), unfortunately (3), aimed (3), trying (3), cabinet (3), important (3), months (3), nothing (3), stay (3), lowered (3), international (3), either (3), let (3), modules (3), ones (3), become (3), vice (3), own (3), late (3), exports (3), published (3), 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at these bonds are new will make them yield more than the curve as the market can not instantly absorb all those bonds venezuelans will sell during the first week thus if i think that they will yield 14 a little pessimistic then the combined bonds will be worth around 67 these are approximate examples only then if this was the case you have 30 100 6 600 bs 4 56 per us given that the swap market closed today higher at around bs 5 3 per us that is not bad you would be buying dollars at a nice 14 discount nice you buy on friday and by monday you have made 14 if you had the bs to put in an order the poor are not allowed into this part of the revolution of course i am not sure if the bonds will trade at 14 or 13 5 or 15 thus i calculate all of the possibilities and you get this graph so even at a high yield to maturity and a high price it looks pretty good thus i suggest that you don t be too greedy bid at 140 the maximum price allowed and you know exactly how well or how badly you will do and even if we talk 16 and 140 you will be ok because you will be buying dollars at a lower rate than the swap market can something go wrong yes two things could 1 the government could decide to increase the size of the offering to us 4 billion or even higher it has an authorization from the national assembly for up to us 5 8 billion more bonds more offering that international markets can absorb at once and the yield to maturity could be at the high range of things essentially there is not infinite appetite for venezuelan bonds because only a selected group of investors specializes in it thus the market could get indigestion if the government offered too much and there were not enough buyers 2 you may think i am going to be rich order a million dollars but you are not the only one doing it and you may get only 100 000 allocated if you have the bolivars no problem but if you are borrowing them you may have to borrow a million and only get 200 000 and have to pay interest for the full amount so don t go crazy put in an order for what you have in bs no more no less and yes it looks good but don t get greedy posted in venezuela 13 comments did the chavez government blink by releasing julio rivas september 28 2009 when the hugo chavez government decided to jail student julio cesar rivas a few weeks ago it was clearly an act of defiance by the government toward the student movement the message seem to be keep protesting and i will jail you too because there was no real reason to pick on rivas the government made him famous by choosing him and sending him to an inappropriate jail because in the end pro chavez thugs have visibly done things that are much worse than anything you could accuse rivas of but remain at large such as the 40 motorcycle thugs that accompanied lina ron in their violent attack on globovision and only ron is in jail just because it would look bad if she were at large but armed lina ron was no even sent to the women s jail a kids playpen when compared to the yare jail where rivas was sent the government had the chance to release rivas on his own recognizance when he was first brought in front of a judge but it didn t there were clearly orders from above to be tough to move forward and send a message to the student movement but something happened at this point while the oas was watching honduras and sending missions to honduras funny no oas cidh mission has been allowed in venezuela in seven years but this does not bother those oas cynics a small group of students decided to start a hunger strike at the caracas oas headquarters to protest the detention of julio rivas it started with a group of five students but in time it grew more joined and by today reportedly 58 students going on 78 were involved foto by noticiero digital and one had to add other political prisoners to the group as somonovis forero and other including eligio cedeno joined the group and it did indeed look like the government was trying to slow down the tsunami of hunger strikers with rivas release but a funny thing happened on the way to freedom julio rivas after spending a few days at the yare jail figured that anything was better than that even a hunger strike so he went straight to the oas headquarters and joined the hunger strike thus so far the strength of the movement has not slowed down on the contrary it has been picking up people the students as usual have been able to find more impacting strategies than the so called opposition i think the government blinked the question is at this time whether the hunger strike action can be sustained in time and what will the government do if the movement continues to grow kudos to rivas and the rest of the students posted in venezuela 8 comments we have a bond or two new issue 101 september 28 2009 after a little bit of indecision today the government announced that it will sell at least us 3 billion in two bonds which will mature in 2019 and 2024 and will be sold for local currency but denominated in us dollars this is much like the other bs us issues sold by the chavez government since august 2003 which are sold in order to absorb liquidity as well as satisfying the pent up demand for foreign currency the maturity dates arise from the fact that venezuela has no bonds maturing in those two years thus 10 and 15 years from now the payment schedule will be smoother and hopefully easier for the country the 2019 has a coupon of 7 75 and the 2024 has a coupon of 8 25 i have already received a few emails asking me if it is a good deal so i will try to answer it here the bonds will be sold at auction the government will announce tomorrow a range of values for which it will accept offers for the bonds thus there is no price yet for the bonds the highest bidders will get them at last the government got smart in previous bonds people would put in for 100 000 dollars and they would get a fraction of that and pay for it this time around you can t do that you have to put up the full amount with your order thus if you want 100 000 dollars of the bond and your price is 140 then you have to pay bs 301 000 100 000 x 1 4 x2 15 when you place the order and your bank and or broker has to be able to prove that you did so this eliminates fake orders and will make the bonds end up in the hands of those that the bolivars and want to buy dollars to keep them should be more efficient and help keep the swap rate down for a while is it a good deal well it will be at a certain price today the swap market was around 5 4 so anything you can get below that is good venezuelan bonds with maturities like 2020 2023 yield if you keep them till the last day around 12 5 thus these bonds should trade around that value in an ideal world except the world is not ideal the market for venezuelan bonds handles maybe us 100 million on a good day so imagine that in the first two or three days venezuelans eager to sell their bonds will go to the market to sell too much offer few bidders the bonds will drop in price thus the yield will be higher than the ideal 12 5 that matches bonds trading today let s assume the yield goes to 14 5 then at a price of 148 you would be buying bolivars at bs 5 01 to the dollar a nice discount over the swap market price however at 15 5 yield at the same price of 148 you would be buying dollars at bs 5 33 per dollar with commissions and the like it would be like buying dollars at the same value that the swap market closed today at not worth it what do i think will happen well the problem is that today may be too early to decide first of all the swap market could keep dropping between now and the last day to receive orders which is friday october 2nd if the swap rate drops a lot then it s tricky i personally think that the bonds will likely trade in the international markets near 14 14 5 which means a price around 144 should be fine but i reserve the right to change my mind before friday why because three things could still happen one the swap market could drop near or below 5 bs per dollar which would make it too close for comfort at 144 two the venezuelan yield curve could go up as investors sell bond prices are pushed down to get ready to buy these higher yielding bonds and three and this one we will not know until after your order is in the government could decide to issue more than us 3 billion if there are lots of orders this will have the effect that there will be more bonds lower bond prices than expected coming to market which would move the curve up even more yields to maturity higher than the 14 i expect thus on thursday i will give a brief update on how i see it then send questions to devilexcrement gmail com or write a comment with your question posted in venezuela 3 comments chavez defends and praises mugabe it takes one to know one september 28 2009 mugabe sleep at the margarita summit at the asa summit this weekend dictator hugo chavez gave robert mugabe a resounding backing saying mugabe has turned into the target of attacks of various institutions of the world system and through the world press he has been satanized he is attacked i want to give him our moral and political backing the people recognize him for his anti imperialists fights he is a man that has spent all his life in the anti colonianism fight we have to align ourselves in his defense this is the same hugo chavez that criticizes obama because he has not denounced the military dictatorship in honduras which is not even true but while chavez made this criticism in new york last week he came back home to meet with some of the bloodiest dictators on the planet just a week after he had visited most of them after the margarita meeting only north korea is missing from chavez list of face to face meetings with the worst dictators of the planet after his defense of mugabe visiting kim il sung will add nothing to our understanding of chavez true frame of mind posted in venezuela 6 comments hugo chavez a socialist s fascination and fixation with banks september 27 2009 for a so called socialist hugo chavez has a strange fascination with a tool that is an integral part of capitalism banks ever since he became president chavez has created quite a few of them remember banco del pueblo soberano it was supposed to give small loans to poor people who would in turn pay back their loans at preferential rates and allow the bank to give out even more loans it was an idea copied from the very succesfull grameen bank founded by muhammad yunus the venezuelan version did not work as well within a year it had to be capitalized as those running it spen half of the initial equity on the bank s system then there was some sort of scandal because the bank would mostly invest its funds in government paper rather than lend it out as was its mandate but much like the 2 000 barrio adentro modules left without doctors chavez lost interest in the project there was little follow up and nobody ahs heard from it in years it hasn t published financials since 2002 as if they were not part of the pueblo soberano chavze created in 2001 el banco de la mujer it was just like the banco del pueblo but aimed at helping women particularly those head of households that were running a small business to support themselves chavez also converted the old fondo de inversiones to bandes the development bank which acts in somewhat mysterious ways and participates in lots of teh high level financial operations of the country chavez also created the banco del tesoro a good idea whose main function was to concentrate the deposits of the public sector to make public finances more efficient it ahs done some of that but only a small fraction public deposits continue to drive a lot of the business of the private banking sector particular small and medium sized banks which for a fee pay government officials for their deposits much of these funds stay in these banks rather than being used so that the government officials that run them can continue receiving fees from this racket one of the biggest corruption schemes of the bolivarian robolution on the way the government s workhorse bank banco industrial de venezuela has been recapitalized twice and was recently intervened as the bank continues to lose money in a country where banking and finance has been one of the most profitable activities during the chavez era the chavez government also created the development banks aimed at financing development projects but somehow people can t tell the difference between them and regular banks even the iranians got into the game with the foudning in venezuela of the banco internacional de desarrollo a fully owned iranian bank that operates in venezuela and which has been in the news recently thanks to the warnings of robert morgenthau who argues that these activities represent a serious danger to the us chavze also nationalized banco de venezuela which was a subsidiary of banco santander reportedly chavez wanted to buy a bank that would allow the government to disburse payments to supporters around the country something bandes had been trying to do but not very sucessfully banco de venezuela was not the best bank for that but when chavez gets an idea in his mind he gets it and he got banco de venezuelatwo months ago he overpaid given valuations of banks in venezuela but not given the profits that well run banks may earn in this artificial financial environment where even with all restrictions arbitraging the government can be quite profitable one of the few measures that chavez has announced was that he named the president of banco de venezuela as if he did not have enough to do as president of all government banks likely hoping that some of the good things that banco de venezuela still has will rub off unfortunately the government has been running that bank for too short a time and it may be that it will be the other way around and soon banco de venezuela will see its profits and its competitiveness drop dramatically chavez has also been promoting the idea of banco del sur a regional bank located in venezuela which would become a sort of idb of south america or latin america most countries showed some interest in the belief that venezuela will put a up a few billions for them to borrow but chavez is not that dumb and now he does not even have the money due to the drop in oil prices but he had to sign something important at the margarita summit and he revived the idea of the bank which was so preliminary that chavez said the bank would have a capital of us 20 billion but his foreign minister maduro said that it would start with us 7 billion i bet everyone will wait for venezuela to put up the seed capital which means that the bank will not get going for a while as if this were not enough chavez came up with even another bank during his asa summit america south africa and suggested there should be another bank for joint projects among these countries he even came up with a name bancasa thus chavez claims to be a socialist ...
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