Tag Archives: banking

Oops, Goldman fails to shift Pdvsa debt to Portuguese taxpayers

From National Geographic. Click for more vampire squid beauty.A tweet by the Devil alerted me to this remarkable WSJ story.

It says Goldman Sachs, via an entity called “Oak Finance Luxembourg SA,” loaned $835 million to Banco Espírito Santo just weeks before the Portuguese bank collapsed. That is remarkable because Goldman also owned more than 2% of the bank.

The loan was meant to cover a risky loan that Espíritu Santo had made to Wison Engineering of China and Venezuelan state energy company Petróleos de Venezuela SA, as they upgraded the Puerto la Cruz refinery.

When Espíritu Santo collapsed, Portuguese authorities broke it up into a good bank and a bad bank. The bad bank kept the bad name and the bad assets. Goldman’s loan had gone over to the good bank, where it could have been repaid in full. But

The Bank of Portugal decided … the loan should … remain at the “bad bank” that kept the Banco Espírito Santo name and its worst assets… Goldman Sachs and its clients could lose hundreds of millions of dollars from investments in Oak Finance notes backed by the loan…

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The untold story of Torre de David

Today we get word that the Torre de David in Caracas may be sold/given/loaned/something to a Chinese group to use as offices. This is good news.

The tower, also known as Torre Confinanzas, has become world-famous as a “vertical slum.” Or as I called it in a report on Monocle24, the world’s only squat with a heliport. It’s a 45-story building with a heliport, atrium, and parking garage. When mostly built in 1994, it was abandoned because of financing problems related to a banking crisis in Venezuela. The government’s bank intervenor, Fogade, took ownership of the tower, but did nothing with it for years. The place became a dangerous squat.

In 2007, the mayor of Caracas, Juan Barreto, helped organize the mass invasion of the tower by hundreds, if not thousands, of families. Within days, hundreds of families stayed there night and day, clearing out trash, booting the addicts who had been squatting there in a less dignified way, clearing out corpses of animals and who knows what else. In the end, the popuation of the building swelled to as much as 5,000. Residents built apartments in the skeleton of the old office building. Today, it’s a barrio (slum) like almost any other — a few things about it are better than the typical peripheral slum, especially the location, professional security controlling access, and decent conflict resolution through a system of floor councils and a building council. Other things are worse, like the danger of falling to one’s death through unfinished shaftways. And many things are about the same — unreliable water, lots of stairs to arrive at one’s home, broken sewer lines.

That’s all old news, right? It’s been in a hundred articles, videos and radio reports (guilty!). But here’s a part that few people know:

Somewhere in the middle of the 2000’s, Fogade prepared to sell the building. A private developer was ready to spend US$50 million on it, and committed to investing another $50 million to complete the building. According to my source inside Fogade, the contracts were written and ready to sign. And then President Hugo Chávez heard about it. He forbade Fogade from selling the building. It would be more fitting as the headquarters of a ministry, rather than being in private hands, Chávez supposedly said.

But the ministries never got the money to complete and refurbish the buildings, and before they could, it was a formal squat and nobody wanted to evict thousands of people.

This isn’t an energy story, but it’s a good story about what happens when ideology gets in the way of policy. I know a lot of people who fight against privatization of anything. In this case, what good did it do to avoid privatization? This building got lived in for 7 years, some kids fell to their deaths, and now the building ends up privatized anyway. It’s hard for me to see this as a big win.

I am just glad to know that the government may find someone who can use the tower for its best and highest use, and that the residents might be given homes. Sadly, their new homes are likely to be crappy, and a similar cycle is most likely to begin anew.

OLD: Univision links Rafael Ramírez to possible money laundering, coverup

I tried to dig into this story a couple years ago, but nobody would tell me who was the high-level Venezuelan official who had supposedly supplied the funds. Without that info, it wasn’t so interesting. With that info, well, it is interesting. If you speak Spanish, watch the following.

Obviously, Ramírez himself hasn’t had a chance to comment on this story, so please withhold judgment. You never know, maybe he was buying a house in Switzerland, and needed to transfer the money via a lawyer through the USA…oh screw it, never mind. He’s going to have to come up with his own explanations.

(I’m losing my touch. This story was from 2011, and I just saw it retweeted from these black market dollar traders. Sorry. Leaving it here cause it’s interesting, but it’s not new.)