Monthly Archives: April 2011

PDVSA pension Ponzi: Receiver has recovered 1% of cash

Associated Press says a receiver is having a hard time recovering PDVSA pension money that got mixed up in a Ponzi scheme and other financial shenanigans:

Carney on Monday asked for a three-month deadline extension to Sept. 30, saying the task has been complicated by gaps in the paper trail and other challenges.

“The magnitude and fraudulent nature of the transactions, the lack of meaningful documentation, the involvement of foreign entities, and the sheer quantity of data all necessitate additional time,” Carney, of the New York law firm Baker & Hostetler, wrote in the court filing.

The article also says what kind of success the receiver has had so far. He has recovered $5.1 million. Out of about $500 million. I have no idea how that compares to other cases, as it may be that the money is all there and it’s just a matter of time. We shall see.

Bowing to power

The Iraq war was about oil, and the British and US governments talked with oil companies about Iraq during the lead-up to the 2003 invasion. This was obvious at the time, and now we have new information proving the British part of the story. People who said the war was about weapons of mass destruction or Saddam=Hitler or whatever were never really saying what they really thought. What they were saying, under their words about Iraq, was “I will bow to power. If I ever made the mistake of developing independent observation and critical thinking, I will cease to use them on request. Please hire me.”

It’s the same thing that many people in the political class say every day.

Please keep it in mind when reading news about other countries, especially those that export oil.

PDVSA’s tugs: The joys of opacity

Gustavo Coronel points us to the scheduled shipment of 42 (!) tugs from Singapore to Venezuela. As someone who has researched the contracts behind the dearly departed Aban Pearl drill ship and its successor, the PetroSaudi Discoverer, Coronel wanted to know about who was the owner of these ships. He asks:

If PDVSA isn’t the owner of these 42 tugs, who else could be? And if they are, how are they going to pay for these machines? What are they going to be used for? Why so much mystery? Is it another example of a soup [scam], a la Aban Pearl?

Of course it’s no surprise that people are confused by such a situation. And he’s right to be suspicious that there may be something scammy going on. I know that the government and its defenders don’t like people picking on PDVSA or Venezuela generally, as much of the world is equally opaque in its government contracting and procurement. But what’s sad about this situation is that the Chavez government came in on a promise of transparency. The 1999 constitution guarantees access to information. And yet Venezuelans are now accustomed to knowing nothing about how the government works. It’s similar to the US, but with even less accountability.

To blow people’s minds in both Venezuela and the US, I have been pointing them recently to the story of the “puente mecano” over the Biobio River, in Chile. Now, I think regular readers know that I am suspicious of Chile, and especially of its impeccable reputation. That said, allow me to add to the myth.

Continue reading

That explains it

How dumbasses get their suits.

Business majors spend less time preparing for class than do students in any other broad field… business majors had the weakest gains during the first two years of college… business majors had the weakest gains during the first two years of college…. Business programs also attract more than their share of students who approach college in purely instrumental terms, as a plausible path to a job, not out of curiosity… Students don’t compose a complete paper of their own…. “We’ve got students who don’t read, and grow up not reading…”


Alange Energy (ALE.v) shareholder suit

I know that this website was one of the few to focus on the weirdness of Alange’s restatement and insider sales back in January, so I figure you as readers will find this interesting:

TORONTO AND WINDSOR, April 18 /CNW/ – A class action has been commenced in the Ontario Superior Court of Justice on behalf of all investors who acquired shares of Alange Energy Corp. (“Alange”) during the period August 30, 2010 to and including January 12, 2011 (the “Class Period”).  The plaintiff alleges that the defendants engaged in violations of Ontario’s Securities Act and the common law. Continue reading

Chile seeks to become anti-bike laughingstock

Bicycling on the sidewalk, Valparaiso, Chile. Plagiarized photo, click for original.

I leave Santiago for a week and they try to destroy all that is good about the city. First my favorite produce market burns up, and now the government tries to ban cycling on the street, putting the city’s booming cyclist population onto the sidewalk. A call to your local Chilean embassy would be most useful in properly humiliating the country for even considering a law like this. Translated from the website of the Furiosas Ciclistas (Cycling Furies):
Continue reading

Fuel prices rise, Brazilians go after Big Sugar

Another guest post, this one from quasecarioca, who follows environment and sustainability issues in Brazil. The last guest post, on iron miner Vale, deserved a wider readership, as it was a very smart analysis of what’s up in Brazilian capitalism. Read this one, then read that one.

Brazil's national patrimony, shamefully handed over to fuel the capitalist bodies of Boston's financial district rather than being burned in the automobile engines of Sao Paulo. Photo taken today at Dunkin Donuts.

Who’s to blame for pricey gasoline? In the U.S. it’s usually pinned on Big Oil or Big Government. In Brazil these days, drivers are furious with Big Sugar – demanding action against sugar mills much the way Americans like to call for Congressional investigations of fuel prices. But Brazil’s tantrum about sugar producers is a seasonal affair that we’re likely to see until the country deals with the imbalances in its growing biofuels program.

Sugar cane ethanol in Brazil now provides almost half the fuel used by the country’s fleet of light vehicles, primarily because of the widespread use of “flex-fuel” engines that run on any combination of gasoline and ethanol. This has substantially reduced the use of fossil fuels by cars and spurred a huge biofuels industry that actually generates both profits without massive government subsidies and creates a substantial amount of energy, unlike the U.S. corn ethanol program which struggles to do either. (Those of you interested in flaming me for being on the wrong side of the food vs. fuels debate, I’m happy to address that in a separate post).

But cane ethanol faces the problems of most alternative forms of energy – its production depends on seasonal and climate circumstances. Brazil’s sugar cane crop ends around October and starts up again around now, leaving a gap when ethanol production goes down and prices rise. Supplies this year are even more limited because of an additional variable – high sugar prices that lead mills to cut biofuels output and boost production of the sweetener, which generally goes toward the export markets. Continue reading

Barclays: PDVSA may pay Exxon $3.7 billion, soon


$3.7 billion is a lot of money. Less than Exxon asked for, more than PDVSA originally offered. From Barclays analysts Alejandro Grisanti and Alejandro Arreaza:

We are expecting that the settlement presented to the ICC in New York will be settled soon, with a decision that PDVSA will need to pay USD3.7bn to Exxon….Although we and the market are expecting
that the first case, (with the ICSID) will be decided in 4Q this year, we are expecting that the settlement presented to the ICC in New York will be settled much sooner…Conoco has also filed two similar requests for arbitration. In this case, we expect first a ruling from the ICSID that could come in the third quarter of the year, and one from the ICC some time later.

Continue reading

Oil and water still don’t mix

The Guardian goes to the bottom of the Gulf of Mexico in a submarine, and what they see isn’t pretty:

The view from her submarine is different, and her attachment is almost personal. On her descent to a location 10 miles from BP’s well in December, Joye landed on an ocean floor coated with dark brown muck about 4cm deep. Thick ropes of slime draped across coral like cobwebs in a haunted house. The few creatures that remained alive, such as the crabs, were too listless to flee. “Most of the time when you go at them with a submarine, they just run,” she says. “They weren’t running, they were just sitting there, dazed and stupefied. They certainly weren’t behaving as normal.” Her conclusion? “I think it is not beyond the imagination that 50% of the oil is still floating around out there.”

Go read…