Cuban dissident Guillermo Farinas ended his hunger strike yesterday after 134 days. Farinas decided to end his strike after the Cuban government said it would release political prisoners rounded up in the "Black Spring" crackdown of 2003. Get well soon. [link]
The Uruguayan selection, which has made it to the quarter finals of the World Cup, just received a shipment of half a ton of fine cuts of beef for the mother of all asados in preparation for a contest against Ghana on Friday: "450 kilos of lomo, 200 of entrecot, 75 of vacío, 75 of colita de cuadril, 150 of ojo de bife and 50 kg of picaña." [link]
Hitmen have assassinated the PRI candidate for governor of Tamaulipas State, Rodolfo Torre Cantú. Torre was gunned down along with six others at about 10:30 this morning on a highway on the way to a campaign event. Drug mafias are assumed to be responsible. [link]
From the days when coups were something of a regional sport, new documents detail a famous British ballerina's role in a plot to topple the government of Panama. The plan was to use her yacht to gather men and arms, then "land somewhere and collect in the hills." It didn't work. [link]
Mexico's Attorney General's Office has posted on its web site irrefutable evidence that gold-plated AR-15s and diamond-studded pistol grips are not nearly as cool-looking as they sound. The deadly knick-knack collection is said to belong to Valencia Cartel leader El Lobo. [link]
Two Brazilian ranchers were sentenced to 30 years in prison apiece for ordering the killing of an environmentalist nun: "Prosecutors said the pair offered to pay a gunman $25,000 to kill the 73-year-old [Dorothy] Stang because she had prevented them from stealing a piece of land that the government had granted to a group of poor farmers." [link]
This video of a kidnapping and car chase in Mexico is notable mainly for the bad-assitude of the TV journalists who were on this like white on rice. Well done, gentlemen.
The Economist takes a peak at the Mockus phenomenon in Colombia: "His moustacheless beard gives him the air of a Baltic pastor... He is financing his campaign with a bank overdraft. His supporters rely on Facebook and make their own posters; street vendors sell unofficial campaign T-shirts." [link]
Some cruise lines will cease traveling to Antarctica after this cruise season, as a ban on the use and carriage of heavy fuel oil goes into effect next year. The ban came after a 2007 incident when a Gap Adventures ship got punctured by ice and sank, causing a mess. [link]
In an interesting development in Venezuela, the CICPC (equivalent, I think, to the FBI) has made its first arrest of Twitter users: Two people who the agency says tweeted rumors with the intent to destabilize the banking sector by causing a run on banks.
According to a press release, CICPC director Wilmer Flores said:
False rumors on social networks are clearly punished in Article 448 of the banking law. This means that anyone who spreads malevolent rumors via any means, e-mail, text messages from cellular phones, through Twitter, Facebook, or any other technological tool, with their own voice or through any other means of communication is committing a crime and must answer to the relevant authorities.
Noticias24 ran down one of the allegedly felonious tweets, from one Luis Enrique Acosta Oxford, which said, “People, so you can’t say I didn’t warn you, pull your money out of BANESCO today, there aren’t many days left.”
I know, rumors on Twitter. Can you believe it?
This tweet was from June 30, a couple weeks after the government took over (deservedly) Banco Federal, intensifying an already tense situation after the take-over of about a dozen other small and medium-sized banks late last year.
Malicious speech isn’t protected anywhere in the world, and people should learn that applies to Twitter as well. But if you need a special law to protect your banking system’s solvency from the effects of rumors, perhaps the real problem lies elsewhere.
If you read one story today, let it be Michael Smith’s very long and very interesting story in Bloomberg on how Mexican drug traffickers launder money through US banks like Wachovia (now owned by Wells Fargo) and Bank of America.
The piece is long and excellent enough to defy excerpting, but let’s give it a shot:
For years, federal authorities watched as the wife and daughter of Oscar Oropeza, a drug smuggler working for the Matamoros-based Gulf Cartel, deposited stacks of cash at a Bank of America branch on Boca Chica Boulevard in Brownsville, Texas, less than 3 miles from the border.
The Oropeza case gives a new, literal meaning to the term money laundering. Oropeza’s wife, Tina Marie, and daughter Paulina Marie deposited stashes of $20 bills several times a day into Bank of America accounts, Salazar says. Bank employees got to know the Oropezas by the smell of their money.
“I asked the tellers what they were talking about, and they said the money had this sweet smell like Bounce, those sheets you throw into the dryer,” Salazar says. “They told me that when they opened the vault, the smell of Bounce just poured out.”
Yes, they were literally laundering money. I suppose to wash off the cocaine, or something.
The drug traffickers appear to be onto something obvious: In my personal, anecdotal, totally non-peer-reviewed experience, it is a hell of a lot easier to open bank accounts and move money in the United States than in Latin America.
Maybe someday soon, the war on drugs will also make it impossible to open a bank account in the US without presenting a copy of a university diploma.
An article in El Nacional puts a nice little bow on Venezuela’s ongoing rotting food scandal, in which a government importer left about 122,000 tons of foodstuffs to spoil in containers at Puerto Cabello. From the article:
The Productora y Distribuidora Venezolana de Alimentos, Pdval, imported 597,000 tons of foodstuffs in 2008. The amount is triple its distribution capacity (191,000) and almost quadruple the sales made that year (122,000 tons) according to a management report from the company dated June 2010.
Importing three times as much perishable inventory as you have the capacity to distribute does indeed have a predictable, stinky outcome.
I’m not sure why the report examines numbers from the end of 2008, but it’s probably still a decent illustration of how the government was doing business, which is not unlike the legendary way Venezuelans have always done business when possessed of a huge pile of oil cash: ‘ta barrato. Dame dos.
I suppose I don’t need to mention that you won’t have any food rotting in any ports if you produce it locally, but there, I just did.
Everyone seems to agree that the economies of Latin America are experiencing a nice little recovery. The IMF, for example, just raised its forecasts for the region and is now projecting 4.1% GDP growth for the region, with 4.2% growth for Mexico and 5.5% for Brazil. Oh boy, numbers.
But here’s something interesting.
In an analysis of the region’s sovereign debt prospects (PDF), Fitch Ratings divides the region’s economies into three “camps.” One camp includes countries like Venezuela, Argentina, and Ecuador, whose recovery will be slower than that of the rest of the world for reasons that should surprise no one (high inflation, weak institutions, poor fiscal discipline, if you must know).
In a second camp are countries like Chile, Peru, and Brazil, whose good fiscal discipline, low political risk, and safe investment environments mean their economies will be growing like weeds this year and next.
Then we have the middle camp, which is basically countries that cast their development lot with the United States: Mexico, Colombia, Costa Rica, El Salvador. And here’s the interesting part. Fitch projects this group will see only a moderately-paced recovery specifically because they’re tied to the US.
Meanwhile, Fitch says the Chile/Peru/Brazil group is doing particularly well partly because it does more business with China.
So I ask you: At what other point in recent history has easy access and close ties to the US economy been seen as a disadvantage?
(Original image courtesy H. Langos via Wikimedia Commons.)
Mining is a nasty activity, one that inevitably preys on countries with weak institutions and desperate populations, and with predictable results: environmental devastation, child labor, corruption, increased crime and prostitution, etc.
This advertisement, aired in Argentina, sums it up nicely.
Problem is, by my count, about half the people in this video are wearing jewelry. It’s black-and-white, so it’s difficult to tell exactly what variety – but my guess is that at least some of it is gold. These are movie stars, after all.
Countries like Argentina and the United States, with largely educated populations, relative wealth and abundant natural resources, are most prone to this kind of behavior. It’s a mutation of NIMBY-ism (Not-in-my-backyard) and not a particularly flattering one. You see, if we rich white folk (and anyone in the middle and upper classes of the very countries where such projects are proposed), are going to insist on wearing flashy jewelry, then we damn well better find a sustainable, socially-just way to mine precious metals in our own backyards, where we can keep a close eye on it.
Simply saying no to resource extraction in our home countries yet continuing to use them wastefully (Exhibit A: Petroleum), punts the problem to a less-developed country, where the very same issues take place with virtually no oversight and more extreme impacts (just a few examples here). We’ll give Argentina, and the folks in this video, the benefit of the doubt (Technically, it’s a developing country). But the United States, for example, sits atop the world’s largest gold reserves, yet in 2004, consumed 5 million ounces more than it produced.
What’s their excuse?
Miguel at The Devil’s Excrement has posted a great piece on Venezuelan bond prices and how they stack up to the rest of the developing world. During last year’s financial crisis, lots of money flooded into developing market bonds, pushing their yields down. The one exception: Venezuela. Its 5-year dollar-denominated bonds are paying around 11%, while state oil company PdVSA is paying a whopping 14%.
For the sake of comparison, Colombian 5-year debt yields 4.28%.
The truth is that PDVSA is yielding roughly ten times more (10x) than Brazil until 2015. Investors are saying they have no fear in buying Brazilian bonds at 1.2% until 2012, but they are worried (really worried!) with PDVSA bonds which yield 10.35% if you keep them for the next 16 months. Whatever their reasons, these investors are agreeing with Morgan Stanley, there may be a cash crunch in foreign currency and Chavez may decide to tell investors to bag it.
Of course, this is just what the market says, and markets often turn out to be a high-tech equivalent of 5-year-olds playing soccer. A 10.35% yield on debt from a major international oil company with exclusive access to some of the largest reserves in the world is hella good.
Miguel says he actually owns PdVSA debt. Something to think about.
Venezuela may be forced to dip into its savings or issue debt as early as this year, as falling oil output and steady crude prices mean the country is running out of cash, according to a report from Morgan Stanley. Output has fallen to 2.2 million barrels a day from 3.7 million barrels a day over the last 13 years. [link]
GlobalPost.com has published a great little video on beef prices in Argentina. The government has regulated prices and exports to keep citizens happy, but that means producers have been pinched. Some are no longer producing, which could result in a beef shortage in the country with the highest per capita beef consumption in the world.
Panama has pulled down a coveted investment grade for its sovereign debt. Fitch Ratings upgraded Panama to BBB-minus because of the country’s excellent track record of fiscal responsibility and break-neck growth over the last decade. With the upgrade, Panama is now on the level of heavyweights like Brazil, Mexico, and Chile in terms of investor confidence. [link]