Brazil: Officials Claim Success In Rio Slums
November 29, 2010
A Brazilian military and police operation against drug trafficking gangs in the Rio de Janiero slums was a success, Rio state Governor Sergio Cabral said, AFP reported, citing TV Globo. Cabral said the operation was a decisive step forward for public safety, a turning of the page in the history of Rio. State officials said police seized 40 tons of marijuana and encountered nominal resistance compared to a Nov. 25 incident. Rio state Police Commander Mario Sergio Duarte said the operation went smoothly because police helicopters were overhead with aerial firepower.
(AP:CARACAS, Venezuela) President Hugo Chavez is promising to build new public housing complexes, boost social programs and renovate the long-neglected Caracas subway _ and he needs money.
The ambitious plans will squeeze Venezuela's coffers at a time when oil earnings have slipped and Chavez is sending his foreign allies generous amounts of crude on credit. So he has raised a possibility that once seemed remote: selling off Venezuela's U.S.-based oil company, Citgo Petroleum Corp.
For Chavez, it's an idea driven both by hard-money realities and by politics.
Getting rid of the company and its refineries in the U.S. would give Chavez billions of dollars for domestic spending as he approaches his 2012 re-election bid and seeks to remedy problems including an acute shortage of affordable housing. A sale would also fit with the leftist leader's interest in distancing Venezuela from the U.S. while building stronger ties with allies such as Russia, China and Iran.
Citgo has delivered oil to Venezuela's No. 1 client for two decades, but judging by Chavez's complaints about Citgo not turning a profit, he seems more than ready to sell it, if a buyer can be found.
"Citgo is a bad business, and we haven't been able to get out of it," Chavez said in a televised speech late last month. He ordered his oil minister, Rafael Ramirez, to look at options for selling off the state oil company's assets in the United States.
Chavez says the Houston-based company could be worth at least $10 billion, but analysts say it would likely fetch much less _ perhaps half that _ and it might be hard to find a buyer in a difficult economic climate.
The government's budget next year _ not counting the additional spending often approved by Chavez's congressional allies _ is the equivalent of $47.5 billion, making the possible sale of Citgo a potential shot in the arm for the president's efforts to shore up support.
Critics say that selling Citgo could endanger Venezuela's long-term business interests since oil is the lifeblood of the economy and much of the earnings come from the U.S.
Chavez, meanwhile, has increasingly sold oil elsewhere under less profitable deals aimed at cementing relationships with friends abroad.
"It's hard for rational observers to understand that (Chavez) would take oil away from U.S. clients that pay cash for Venezuelan oil, in order to supply countries that consider Venezuelan oil almost as a right or as a political gift," said Gustavo Coronel, an energy consultant and former executive of state oil company Petroleos de Venezuela SA (PDVSA). "However, Chavez is no longer driven by economics but by ideology."
If Chavez were to go ahead with a sale, Venezuela would likely seek to negotiate a supply contract to keep selling crude to U.S. refineries.
Even so, Venezuela's oil exports to the U.S. have been declining while Chavez has sought to diversify the country's markets, shipping more crude under preferential deals to allies including Belarus, Cuba and other Caribbean islands. Some buyers are granted low-interest loans, decreasing upfront revenue.
Oil shipments to the U.S. declined from 49 million barrels in February 1999, when Chavez took office, to 31.9 million barrels during the same month last year.
Venezuela's overall oil output has also been declining due to lower OPEC quotas and _ experts say _ inadequate maintenance at some oil fields. While Venezuela says it produces about 3 million barrels of oil a day, the U.S. Energy Information Administration estimates 2.2 million barrels a day in 2009, down about 190,000 barrels from 2008.
Coronel said that when Venezuela bought Citgo, it was a good deal. PDVSA purchased 50 percent of the company in 1986 from Southland Corp. for $290 million as part of a drive to have its own refineries and other facilities in its key markets, the U.S. and Latin America. The state oil company purchased the remaining 50 percent of Southland's shares in Citgo in 1990 for $675 million.
Since then, Citgo has grown. It now operates three refineries in Texas, Louisiana and Illinois, and sells fuel through thousands of gas stations. Citgo has been used by Chavez to distribute discounted heating oil to poor American families in a high-profile program aimed at criticizing Washington's approach to the needy.
Another motive for selling Citgo could be to reduce Venezuela's exposure to U.S. court suits over Chavez's expropriations of U.S. company assets.
U.S.-based Exxon Mobil Corp. has sought international arbitration to claim billions of dollars in compensation after it refused to accept the government's terms for a 2007 nationalization of an oil project in which it had invested heavily.
Citgo, for its part, took a $201 million loss last year, and issued $3.5 billion in bonds this year as its profits plummeted. Profits were battered by lower world prices and a declining flow of heavy, sulfur-laden crude.
"I don't think there would be much interest now" in buying Citgo, said Lou Pugliaresi, president of the Energy Policy Research Foundation, a Washington-based think tank. "But Chavez might find a buyer at the right price."
None has publicly stepped forward yet. Exxon and other major U.S. refiners such as Chevron Corp. and ConocoPhillips might end up being interested in Citgo or some of its assets, said Guaicaipuro Lameda, a former PDVSA president and government critic.
"It has the potential to be a good business if it's well managed," Lameda said. "But it's not being well managed, and that's causing problems."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Posts
on Sat, 11/27/2010 - 13:10
#757587
Anybody have a clue what this may mean for US/Japanese bond spreads?
Thanks.
on Sat, 11/27/2010 - 13:23
#757609
http://www.youtube.com/watch?v=ayiU-4emlKg&feature=related
on Sat, 11/27/2010 - 19:25
#758097
Loved that! But old school like your Uncle (lol)
Today we have NEUTRON-FIAT-Bombs where the Bankstas are untouched, but the taxpayers get the ass ripped out of them. Plus they live to suffer.
on Sat, 11/27/2010 - 19:26
#758099
Really, loved that (without the video).
on Sat, 11/27/2010 - 20:38
#758179
Really, really loved SYL, the New RUSH. Thanks. Love your sister BTW.
on Sat, 11/27/2010 - 20:40
#758181
Really, really loved SYL, the New RUSH. Thanks. Love your sister BTW.
on Sat, 11/27/2010 - 13:15
#757596
Pump
On
Master's
Orders
ORI
http://aadivaahan.wordpress.com/2010/06/15/the-first-exercise/
on Sat, 11/27/2010 - 13:29
#757620
+1
on Sat, 11/27/2010 - 13:17
#757599
ES and ZB
http://99ercharts.blogspot.com/2010/11/es-zb_27.html
http://www.zerohedge.com/forum/99er-charts
on Sat, 11/27/2010 - 13:33
#757630
We are about to embark on World War 3 and its starts with N. Korea. Please watch the video “Brink of War, Mission Accomplished at (http://www.youtube.com/watch?v=ZvVDt-sPQ8w).
Anonymous-
The more we can distract you from the truth and from the Great Depression II in this Country, the better!!
on Sat, 11/27/2010 - 13:39
#757637
http://www.youtube.com/watch?v=oGR8cfQWmyE&feature=related
on Sat, 11/27/2010 - 13:41
#757640
Who are the beneficial owners of these bonds, and where is the money going?
on Sat, 11/27/2010 - 13:54
#757658
The market is broken,,,,let CMG and GMCR,NFLX,AMZN all go up 10%....who cares...I have silver,gold and shells..lots of shells
on Sat, 11/27/2010 - 14:24
#757700
Inquiring minds want to know... ;-)
Snail? Sea? Sea Snail? Pasta? Corporations?
.22? .38/.357? .40? .44? .45? .223? 7.62x39? .308? 12 guage?
on Sat, 11/27/2010 - 17:53
#757991
egg.
on Sat, 11/27/2010 - 14:03
#757672
Just wanted to say THANKS!
on Sat, 11/27/2010 - 14:09
#757678
Right, market opens lower per futures then POMO-juiced Netflix and AMZN lead the charge higher, shorts see what's coming and cash out, markets close up 2%.
on Sat, 11/27/2010 - 14:27
#757706
exactly
on Sat, 11/27/2010 - 14:25
#757701
OK I googled it.
POMO is Point of Maximal opportunity?
thanks
on Sat, 11/27/2010 - 14:33
#757712
Permanent open market ops.
Fed uses them to increase/decrease the amount of capital in the banking system.
on Sat, 11/27/2010 - 14:52
#757741
Yes, that's the spin.
In reality: Ponzi Obfuscating Monetary Operations
on Sat, 11/27/2010 - 16:12
#757863
Please overlook my overdrafts.
on Sat, 11/27/2010 - 17:11
#757932
Please Observe Manipulation Objectives
on Sat, 11/27/2010 - 22:28
#758326
I'm starting to think more like Jesse Livermore, who made and lost millions by chasing price with leverage (but traded too big to use stops): "The price is never too high to start buying, or too low to start selling"
Many, many categories of stocks are on an up channel (auto parts, retailers, restaurants, ag products, even some reit's). Plenty of dips left to buy.
I think part of the reason the ZH regulars are so pissed is because their shorts keep getting torched. The macro picture is screaming "short everything" but the tape is quietly obeying the waves of bullish sentiment that are still active among the players with the most capital......
on Sat, 11/27/2010 - 14:30
#757708
Since QE2 commenced I have not seen the obvious correlation with stocks. Is all this freshly minted cash still going into equities? If not where else could it be going ?
on Sat, 11/27/2010 - 14:37
#757722
"If not where else could it be going ?"
Israel, where else?
on Sat, 11/27/2010 - 20:58
#758209
Lots of us money goes there. Any is too much.
on Sat, 11/27/2010 - 15:10
#757775
It's going to continuing to make the payments on the MBS paper backed by mortgages that the owners are no longer paying but the servicers don't want to pull the plug on as they don't have the right paperwork and can't foreclose.
on Sat, 11/27/2010 - 16:02
#757850
And ecu bailouts and Fannie Freddie and bac jpm c and the rest of the top ten FIRE to prevent them from what looks like the begining of a freefall chart. And REIT and state Munis. Amzn cmg crm appl ect need no help people. As I've said before even with POMO there is not enough money to keep this market up. Internals really suck right now. Even gld is about to roll/drop off the chart. IMO: flash to real crash before Xmas.
on Sat, 11/27/2010 - 16:59
#757914
The RSI sell divergence is glaring on the daily gold and silver charts no doubt they are both about to take a deep short lived dive along with the whole commodities basket and equities look even worse on both the daily and weekly charts.
With QE2 the target has changed, thus far anyway, but I'm worried they will redirect fire back at the SPY to mitigate the decline. Could they possibly be holding fire while they execute some sort of gold/silver wash out? Or will they be turning the pomo hose back at the stock market starting as soon as Sunday night ?
on Sat, 11/27/2010 - 14:35
#757719
Black Friday sales were outrageously good. Consumers queuing up days in advance to spend their US dollars on retail goods. Some sleeping in cars, tents, and on the sidewalk.
Everything is lining up for a remarkable Santa Claus rally.
Remember the attention span in play. Like a fruit fly that's reborn within 24 hrs.
Goldbugs; sell now or you're going to miss the apex. The strong dollar is on it's way back.
on Sat, 11/27/2010 - 15:20
#757791
So you wished you bought gold lower too?
Short GLD , the inverse ETF and buy puts.
Report back the results.
on Sat, 11/27/2010 - 17:23
#757953
Maybe the people sleeping in cars, tents and on the sidewalks have lost their homes? No signs of the mythical consumer rebound to be seen. Inventory driven GDP growth can be a bitch when the stuff just ends up gathering dust in a warehouse somewhere.
"Nov. 27 (Bloomberg) -- Black Friday sales were little changed, rising 0.3 percent, from last year, as U.S. retailers’ efforts to lure customers by opening early failed, ShopperTrak said."
http://noir.bloomberg.com/apps/news?pid=20601087&sid=a0yfie4CheaM&pos=2
on Sat, 11/27/2010 - 15:11
#757776
Print
Out
More
Ordure
on Sat, 11/27/2010 - 15:21
#757792
you know people stand in line to buy limited quantities at low prices, then resell those things on ebay or at the swap meet. those people sleeping in their cars and tents, they are still sleeping there. you know people do that with sports playoff tickets as well.
on Sat, 11/27/2010 - 17:04
#757922
If the Fed is buying Treasuries doesn't this mean the bond dealers will buy more Treasuries rather than stocks etc, so they can flip them to the Fed?
Mr Durden, any chance of giving us a Fed balance sheet graph going back to say, 1997?
The RBA has been repo-ing 'private securities' since the Asian financial crisis, though not so much buying them outright. This has had the effect of inflating their price (against Treasuries). It would be interesting to see what exactly the Fed has been monetising all these years.
on Sat, 11/27/2010 - 18:00
#757999
this is interesting, too if you mean "let's stick the Fed with the treasury crapola and go hog wild into equities" since "who wants to own the no risk trade with the infinity P/E?" the ultimate "stick it to the taxpayer." needless to say "it's obvious what ALL CB's have been monetising over these years" which is "their own countries debt." The irony of course is that "the ECB has been the one responsible one." Goes to show you "no good deed goes unpunished" don't it?
on Sat, 11/27/2010 - 18:12
#758011
"it's obvious what ALL CB's have been monetising over these years" which is "their own countries debt."
Sure, but issued by whom? Treasury bonds, private label MBS, 90 day bank bills? I can't see exactly how the Fed purchasing more Treasury bonds will inflate the price of say, private label MBS, when surely the most profitable trade is to buy whatever the Fed is buying & then sell it to the Fed? After all, they issue the $, which is what the profit is being measured in, you can't lose as long as the $ remains 'money good'.
on Sat, 11/27/2010 - 18:52
#758063
only the Fed makes the money on the trade--"they become the market." what's that tell you? "it's crap." it's like "sticking with large cap stocks" only "the government version." in effect "the Fed is taking responsibility for ALL of the obligations, too." Well..."ALRIGHTY THEN!" Keep spending "more and more on benefits including even a WAR and..well, I'll buy Netflix and Google and anything else that has no debt and barely any obligation." I'll do this since "with interest rates driven to zero it costs me nothing to short treasuries" and "i can plow into equities that have no dividend yield because they're driving all the responsible companies like IBM, Apple and Microsoft into the ground" by "hiring damn near nobody and making sure to pay them even less." Of course "if the Fed actually turns out to be disastrously wrong" EVEN BETTER because "now the short side of my trade is minting money, too!" So answer me this? Should we hate The Ben Bernank? Or LOVE HIM!
on Sat, 11/27/2010 - 18:14
#758015
?
on Sat, 11/27/2010 - 19:57
#758080
overheard in the hot tub at the NY FED Breakroom:
"Guess what? I got a FEVER! and the only prescription is more POMO!"
on Sat, 11/27/2010 - 19:38
#758119
Jim Richards on King World News once said that maybe the US will be buying back our debt from China since they're pissed about our dollar inflation tactics. Any thoughts on this from anyone????? Could this be where our newly printed 1's & 0's in Tron-Land be heading????
Hoser
on Sat, 11/27/2010 - 19:42
#758123
We are "buying our debt", with POMO.
on Sat, 11/27/2010 - 21:35
#758261
April seems so very long ago.
"We have politely made clear in all our speeches ... that we will not monetize the deficits," Dallas Federal Reserve Bank President Richard Fisher said on a panel at the Johns Hopkins University's School of Advanced International Studies.
The Fed is finished with its job of providing liquidity to markets during the financial crisis and is debating how best to withdraw reserves from the financial system, he said.
"Our balance sheet is way too large. We have assets on our balance sheet which will create problems unless we figure out how to manage them," he said.
Some Fed officials regret the U.S. central bank's decision to purchase $300 billion in longer-term Treasury securities during the crisis because it suggested the Fed was prepared to fund the U.S. fiscal shortfall, Fisher said.
The Dallas Fed chief is not a voter on the Fed's interest-rate setting panel this year.
on Sat, 11/27/2010 - 23:33
#758390
You know we make fun of this and steep it in humor as a self defense mechanism because what else can we do? But the fact remains that once one dispenses with the propaganda we are monetizing the deficit in order to fund the military effort to maintain the Grand Area of 1945. This can't continue on much longer and deep down everyone knows it. Furthermore neither trading profits nor gold will help you when society disintegrates. I fact it might just buy you the animice of your neighbors which might be deadly. People who are seen as profiting off societal calamities once they come are treated most harshly by those who lament the loss of what once was.
on Sat, 11/27/2010 - 23:33
#758391
You know we make fun of this and steep it in humor as a self defense mechanism because what else can we do? But the fact remains that once one dispenses with the propaganda we are monetizing the deficit in order to fund the military effort to maintain the Grand Area of 1945. This can't continue on much longer and deep down everyone knows it. Furthermore neither trading profits nor gold will help you when society disintegrates. I fact it might just buy you the animice of your neighbors which might be deadly. People who are seen as profiting off societal calamities once they come are treated most harshly by those who lament the loss of what once was.
on Sun, 11/28/2010 - 01:49
#758477
Dublin, here i come.
A State Visit, a grand Parade with me, in an open Landau.
hrh ADF