More Fantasy Numbers
We’ll go Down The Rabbit Hole in a sec but first…Oilprice.com reports that PDVSA (Venezuela government-owned oil company) has valued it’s subsidiary Citgo at between $32 billion and $40 billion, according to Reuters, citing a court hearing.
It’s just more fantasy numbers from the Chavistas. Most of the analyst’s estimates we’ve seen are in the $10 billion NAV (Net Asset Value) range with the highest estimate at $13 billion.
I guess with the pool of creditors already over $20 billion for those lining up for the auction of shares, which begins in October and the process expected to take about a year, and the pool of creditors growing seemingly by the day, PDVSA felt the need to offer those at the back of the line some hope that they weren’t totally screwed.
Then we have BNN Bloomberg telling us that New York hedge fund, Tenor Capital Management, is set for a big payout after investing in a gold miner expropriated by the Venezuelan government.
Tenor helped finance Crystellex’s litigation for the past decade which led to their $1.4 billion arbitration award and now they’re first in line for the upcoming auction of Citgo shares to pay Venezuela’s creditors on a first come. first served basis. Sometimes these Wall Street types actually do know what they’re doing.
Then we have The White House releasing it’s memorandum on Presidential Determination on Major Drug Transit or Major Illicit Drug Producing Countries for fiscal year 2024.
To nobody’s surprise, Venezuela made the list. In addition, the memorandum specifically singled out Bolivia, Burma, and Venezuela as having failed demonstrably during the previous twelve months to adhere to their obligations under the international counter-narcotics agreements.
FYI, the Chavistas now rely more heavily on revenue from illegal narcotics than on oil revenue.
And CBS tells us that a group of 500 migrants was spotted near the El Paso border, primarily Venezuelans.
This is confirmation that the Venezuela migrant crisis may have fallen out of the headlines but it hasn’t gone away and Venezuela is still the country with the largest number of migrants in the world as more and more people flee the regime of Nicolas Maduro and 21st Century Bolivarian Socialism.
The US southern border migrant crisis appears to be ramping up again with El Paso seeing between 1,000 – 1,200 migrant crossings per day. The last number we saw put the Texas border crossings recently at 9,000 per day.
Now, let’s head Down The Rabbit Hole …
Chapter 11/ Blatant Disregard…
Nicolas Maduro was elected president of Venezuela in 2013 after the death of Hugo Chavez from cancer. The election was extremely close and there has been widespread speculation (allegations) that opponent, Henrique Capriles, actually won.For our purposes, let’s assume Maduro won fair and square. The presidential term in Venezuela is six years and Maduro demonstrated early on that it would be a long six years. The “Guarimba” of 2014 left over 40 dead and hundreds wounded as people demonstrated against food shortages. Maduro let it be known that he would respond to peaceful protests with bullets and jail time. Opposition leader, Leopoldo Lopez, who called for peaceful. I repeat PEACEFUL protests, was jailed for inciting violence and instability. He spent over three years in prison and a couple more under house arrest and then stayed at the Spanish Embassy under their protection before fleeing the country. I used to joke, “If you think this is bad just wait a few years when we’ll look back at this as the good old days”. It turns out that this may have been the height of Maduro’s popularity.
In 2015 Venezuela held elections for the National Assembly, similar to our Congress. Although Maduro’s popularity was on the decline it was widely thought that it would be difficult for the opposition to overcome the Chavista political machine. The drop in oil prices had already hit but with the elections coming Maduro borrowed $5 billion from China so the Chavistas could deliver the expected largess.
Then came the big December surprise. With a high voter turnout of over 74% the opposition swept to victory in 112 of 167 races. This gave them 67% of the seats in the Assembly. With the 2/3 super-majority, just barely, the opposition would have wide latitude to effect a lot of changes including appointments (and firings) in the TSJ, Venezuela’s Supreme Court, and even a possible presidential recall election. Optimism was high that after a decade and a half of Chavismo and 21st Century Bolivarian Socialism change was in the air.
Then the Chavistas killed it! They petitioned the TSJ to set aside the results of four elections, three of which were won by opposition MPs (Members of Parliament). The TSJ, which we’ll cover in detail in the next chapter, is Chavismo’s “rubber stamp”. They did their job and suspended the four MP’s victory until the allegations of irregularities could be properly investigated. They entered the limbo-land of any anti- Chavismo entity. For a variety of ever-changing reasons/rationalizations/explanations whatever…nothing further was ever decided so their election was never approved by the TSJ… nor denied. They were prohibited from taking office but were not replaced in fresh elections…ever!
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