Friday, 23 January 2009

Earlybird, Jan. 23 2008

And these are the headlines ...

VENEZUELA -- PDVSA Running Out of Money to Fund Social Programmes (click here for link to Universal): Well, we have talked extensively about this issue. But I think it is important to make this clear -- The notes about Venezuela and PDVSA written in this blog don't aim at attacking the policies of the Chavez administration, or to push forward some kind of ''ideological agenda.´´ I might not have all the necessary elements to carry out a thorough analysis of detailed stuff, but in general, what we do here is to report what we hear from different actors. The conclusion is, after talking to relevant people who know the country and the company is ''Venezuela's economy is not cushioned against the primary and secondary effects of the ongoing foreign crisis and the fall in oil prices.´´

U.S. -- Geithner Comments on China Signal a Shift in U.S. Policies Towards China (click here for WSJ link): New Treasury Secretary Timothy Geithner started well. China has clearly been for years manipulating its currency and triggering imbalances in international trade (remember the textiles issue, for example.) Treasuries fell yesterday as investors worried that purchases of the securities from China may wane. The Paulson policy of getting the Chinese to compromise on a solution for the currency impasse was erroneous. Hopefully, the global crisis will force the Chinese to be more proactive and recognise the responsibility of being the third largest economy in the world.

BRAZIL -- Mantega Warns: State Credit to Companies Will Be Pegged to Maintaining Jobs (click here for Estado link): Jesus Christ! ''Drown yourself further in debts, and dare not cutting your costs.´´ My reading of this might be too naive, but when you use a crisis to pursue some political goals such as averting a rise in joblessness stats at the expense of the financial health of your country's companies, I am sorry, you, Mr. Minister, are nothing but an irresponsible man.

BRAZIL -- Vale Proposes Paid Leave Until May; Production is Cut (click here for Estado link): At some point unions will have to wear their yellow-green flags and admit they are asking too much from companies.

COLOMBIA -- Bogota Witnessed Increase in Murders; New Mayor Viewed as Responsible for Reversal in Security Indicators (click here for Caracol Radio link): Forty-four more murders might seem too small a number for a place like Bogotá, the capital city of Colombia -- for years and still one of the most dangerous nations. The sad part of this, apart from the increase in homicides, is the lack of effective response to the phenomenon by Mayor Samuel Moreno. The recent murder of an adolescent in Bogota's Zona Rosa district triggered a wave of absurd measures such as imposing a curfew upon teenagers in nine different city areas, forbidding people to drink in the street, among others. In the meantime, we see less police force in the streets and those who you see, are again asking citizens for bribes or fining them with no reason. City security is key for the city if Bogotá still aims at retaining its new-found status as an investment hub, -- which amidst the current crisis may be quite hard to retain.

CUBA -- Bilateral Trade With Venezuela Reaches Record. How Much Do the Cubans Really Own Their Bros? (click here for Nacional link): Well, I have heard from authoritative sources (government and opposition) that the Cubans charge too much for their ''exports´´ of physicians and sport instructors ($400 million in 2007!) That they buy oil from Venezuela at preferential rates and never pay. Well, the two countries probably got help from the Argentine statistics institute to calculate these numbers. Transparency in public accounts should be a must. Unfortunately, that is a word whose meaning disappeared from the minds of Venezuelan and Cuban government officials years ago.

U.S. -- Thain Ousted From BofA After Spending $1.2 Million in Office Redecoration, and -- Most Likely -- Lying About Merrill Losses (click here for Reuters link): Good Jesus! BofA CEO Ken Lewis hasn't saved his bacon at all. Heads were to roll after CNBC´s Gasparino reported John Thain's redecoration atrocity ... Do these guys never learn from the mistakes of their rivals? Richard Grasso had to leave for a scandalous pension package, New York former governor Spitzer quit due to his encounters with prostitutes, bankers at Societe Generale had to leave because of failing to oversee rogue trader Jerome Kerviel ... You remember all these scandals? But nothing as outrageous as Thain's redecoration of his office in NYC amid $15 billion in losses. What was he planning to tell his shareholders?

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