Banking in Venezuela: Fall of the Boligarchs

[The_Dude 1,142]

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

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Fall of the Boligarchs

Dec 10th 2009 | CARACAS

From The Economist print edition

Hugo Chávez cracks down on allies

“BEING rich is bad,” Hugo Chávez is wont to remark. But in the decade in which he has been Venezuela’s president, some people with close ties to his regime have made fortunes. Now he seems to have lost patience with them. Over the past fortnight the government has shut down seven small banks and an insurance company and arrested several of their owners, accusing them of fraud and mismanagement. The president says this is part of a drive to root out corruption. Yet the scandal would seem to lead to the upper echelons of his government.

Mr Chávez has nationalised many other businesses, so the takeovers at first caused mild panic in financial markets. But the banks involved account for less than 10% of total deposits. Mr Chávez assured the big private banks that they were not incompatible with his ideology of “21st-century socialism”.

Those now in disgrace were behind a string of bank takeovers. They were among the most prominent of the “Boligarchs”, as wags dub those who have enriched themselves from Mr Chávez’s “Bolivarian revolution” (named for Simón Bolívar, South America’s independence leader). One of those arrested, Arné Chacón, explained in a newspaper interview in 2005 that, although he had no money, he had been “sold” a 49% stake in one of the now-liquidated banks in return for the business he would bring in. “It’s perfectly normal that, since I’m close to the government, they would deposit more money in my bank,” Mr Chacón said. His brother, Jesse Chacón, has been close to Mr Chávez since both staged a military coup as army officers in 1992. On December 6th he resigned as science minister.

Pedro Torres Ciliberto, who sold the stake to Arné Chacón, is reported to have fled the country. He is a close friend and business associate of Mr Chávez’s former vice-president, José Vicente Rangel. Another of the jailed bankers, Ricardo Fernández, obtained a monopoly contract to supply staple foods to Mercal, a state-owned chain of subsidised grocery stores. His banks received billions of dollars in government deposits, as well as credits from state banks. An opposition legislator called in the National Assembly for an official investigation into what he said were business links between Mr Fernández and Adán Chávez, the president’s brother who is the governor of his home state.

What triggered the crackdown? Venezuela’s economy is falling deeper into recession, even as the rest of the region recovers. Mr Chávez faces a difficult legislative election in September. One theory is that the government owed Mr Fernández so much money that arresting him was an appealing option. Others have stressed the rivalry between four different groups of corrupt officials and their allies, over access to public funds. Whatever the truth, Mr Chávez has seized on the issue to assume one of his favourite roles, as scourge of the rich. He may yet turn this scandal to his political advantage.

SOURCE

[zqt3344 21]

Hugo Chavez will be taken out by the people of Venezuela, he is out of control and failing with his socialist commie ways.

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Fall of the Boligarchs

Dec 10th 2009 | CARACAS

From The Economist print edition

Hugo Chávez cracks down on allies

“BEING rich is bad,” Hugo Chávez is wont to remark. But in the decade in which he has been Venezuela’s president, some people with close ties to his regime have made fortunes. Now he seems to have lost patience with them. Over the past fortnight the government has shut down seven small banks and an insurance company and arrested several of their owners, accusing them of fraud and mismanagement. The president says this is part of a drive to root out corruption. Yet the scandal would seem to lead to the upper echelons of his government.

Mr Chávez has nationalised many other businesses, so the takeovers at first caused mild panic in financial markets. But the banks involved account for less than 10% of total deposits. Mr Chávez assured the big private banks that they were not incompatible with his ideology of “21st-century socialism”.

Those now in disgrace were behind a string of bank takeovers. They were among the most prominent of the “Boligarchs”, as wags dub those who have enriched themselves from Mr Chávez’s “Bolivarian revolution” (named for Simón Bolívar, South America’s independence leader). One of those arrested, Arné Chacón, explained in a newspaper interview in 2005 that, although he had no money, he had been “sold” a 49% stake in one of the now-liquidated banks in return for the business he would bring in. “It’s perfectly normal that, since I’m close to the government, they would deposit more money in my bank,” Mr Chacón said. His brother, Jesse Chacón, has been close to Mr Chávez since both staged a military coup as army officers in 1992. On December 6th he resigned as science minister.

Pedro Torres Ciliberto, who sold the stake to Arné Chacón, is reported to have fled the country. He is a close friend and business associate of Mr Chávez’s former vice-president, José Vicente Rangel. Another of the jailed bankers, Ricardo Fernández, obtained a monopoly contract to supply staple foods to Mercal, a state-owned chain of subsidised grocery stores. His banks received billions of dollars in government deposits, as well as credits from state banks. An opposition legislator called in the National Assembly for an official investigation into what he said were business links between Mr Fernández and Adán Chávez, the president’s brother who is the governor of his home state.

What triggered the crackdown? Venezuela’s economy is falling deeper into recession, even as the rest of the region recovers. Mr Chávez faces a difficult legislative election in September. One theory is that the government owed Mr Fernández so much money that arresting him was an appealing option. Others have stressed the rivalry between four different groups of corrupt officials and their allies, over access to public funds. Whatever the truth, Mr Chávez has seized on the issue to assume one of his favourite roles, as scourge of the rich. He may yet turn this scandal to his political advantage.

SOURCE

[The_Dude 1,142]

Hugo Chavez will be taken out by the people of Venezuela, he is out of control and failing with his socialist commie ways.

I do believe he will be voted out of office, but I don't see a violent overthrow. His support is receding and all that is due to very poor planning. His government got punch drunk when oil prices spiked 2 years ago. They made long term plans based upon $120-140 per barrel prices and have been burning up their reserves ever since. In the meantime, Chavez has been seizing property and business' and imprisoning people to silence his critics. It will be his mismanagement and the economy that will be his undoing.

[HAL 9000 96]

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Fall of the Boligarchs

Dec 10th 2009 | CARACAS

From The Economist print edition

Hugo Chávez cracks down on allies

"BEING rich is bad," Hugo Chávez is wont to remark. But in the decade in which he has been Venezuela's president, some people with close ties to his regime have made fortunes. Now he seems to have lost patience with them. Over the past fortnight the government has shut down seven small banks and an insurance company and arrested several of their owners, accusing them of fraud and mismanagement. The president says this is part of a drive to root out corruption. Yet the scandal would seem to lead to the upper echelons of his government.

Mr Chávez has nationalised many other businesses, so the takeovers at first caused mild panic in financial markets. But the banks involved account for less than 10% of total deposits. Mr Chávez assured the big private banks that they were not incompatible with his ideology of "21st-century socialism".

Those now in disgrace were behind a string of bank takeovers. They were among the most prominent of the "Boligarchs", as wags dub those who have enriched themselves from Mr Chávez's "Bolivarian revolution" (named for Simón Bolívar, South America's independence leader). One of those arrested, Arné Chacón, explained in a newspaper interview in 2005 that, although he had no money, he had been "sold" a 49% stake in one of the now-liquidated banks in return for the business he would bring in. "It's perfectly normal that, since I'm close to the government, they would deposit more money in my bank," Mr Chacón said. His brother, Jesse Chacón, has been close to Mr Chávez since both staged a military coup as army officers in 1992. On December 6th he resigned as science minister.

Pedro Torres Ciliberto, who sold the stake to Arné Chacón, is reported to have fled the country. He is a close friend and business associate of Mr Chávez's former vice-president, José Vicente Rangel. Another of the jailed bankers, Ricardo Fernández, obtained a monopoly contract to supply staple foods to Mercal, a state-owned chain of subsidised grocery stores. His banks received billions of dollars in government deposits, as well as credits from state banks. An opposition legislator called in the National Assembly for an official investigation into what he said were business links between Mr Fernández and Adán Chávez, the president's brother who is the governor of his home state.

What triggered the crackdown? Venezuela's economy is falling deeper into recession, even as the rest of the region recovers. Mr Chávez faces a difficult legislative election in September. One theory is that the government owed Mr Fernández so much money that arresting him was an appealing option. Others have stressed the rivalry between four different groups of corrupt officials and their allies, over access to public funds. Whatever the truth, Mr Chávez has seized on the issue to assume one of his favourite roles, as scourge of the rich. He may yet turn this scandal to his political advantage.

SOURCE

The guy is a lot of things. Socialist he is not.

[The_Dude 1,142]

Not for lack of trying.

[zqt3344 21]

What is he then? Commie, dictator, terrorist????

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Fall of the Boligarchs

Dec 10th 2009 | CARACAS

From The Economist print edition

Hugo Chávez cracks down on allies

"BEING rich is bad," Hugo Chávez is wont to remark. But in the decade in which he has been Venezuela's president, some people with close ties to his regime have made fortunes. Now he seems to have lost patience with them. Over the past fortnight the government has shut down seven small banks and an insurance company and arrested several of their owners, accusing them of fraud and mismanagement. The president says this is part of a drive to root out corruption. Yet the scandal would seem to lead to the upper echelons of his government.

Mr Chávez has nationalised many other businesses, so the takeovers at first caused mild panic in financial markets. But the banks involved account for less than 10% of total deposits. Mr Chávez assured the big private banks that they were not incompatible with his ideology of "21st-century socialism".

Those now in disgrace were behind a string of bank takeovers. They were among the most prominent of the "Boligarchs", as wags dub those who have enriched themselves from Mr Chávez's "Bolivarian revolution" (named for Simón Bolívar, South America's independence leader). One of those arrested, Arné Chacón, explained in a newspaper interview in 2005 that, although he had no money, he had been "sold" a 49% stake in one of the now-liquidated banks in return for the business he would bring in. "It's perfectly normal that, since I'm close to the government, they would deposit more money in my bank," Mr Chacón said. His brother, Jesse Chacón, has been close to Mr Chávez since both staged a military coup as army officers in 1992. On December 6th he resigned as science minister.

Pedro Torres Ciliberto, who sold the stake to Arné Chacón, is reported to have fled the country. He is a close friend and business associate of Mr Chávez's former vice-president, José Vicente Rangel. Another of the jailed bankers, Ricardo Fernández, obtained a monopoly contract to supply staple foods to Mercal, a state-owned chain of subsidised grocery stores. His banks received billions of dollars in government deposits, as well as credits from state banks. An opposition legislator called in the National Assembly for an official investigation into what he said were business links between Mr Fernández and Adán Chávez, the president's brother who is the governor of his home state.

What triggered the crackdown? Venezuela's economy is falling deeper into recession, even as the rest of the region recovers. Mr Chávez faces a difficult legislative election in September. One theory is that the government owed Mr Fernández so much money that arresting him was an appealing option. Others have stressed the rivalry between four different groups of corrupt officials and their allies, over access to public funds. Whatever the truth, Mr Chávez has seized on the issue to assume one of his favourite roles, as scourge of the rich. He may yet turn this scandal to his political advantage.

SOURCE

The guy is a lot of things. Socialist he is not.

[The_Dude 1,142]

Maybe you should read up on him. I posted a link in this thread to the economist, they have a wealth of information about his tenure of the past decade.

[HAL 9000 96]

Not for lack of trying.

If he really was the socialist some people claim he is... then again its all about making the nutjob a boogeyman as well. He may be using 'socialist' language... but its nowhere near in practice. I wouldn't call that trying... I'd call that more of the same in his quest for power. Just like the other douchebag is doing next door in Colombia, but 'doing' it from the 'other' ideological perspective.

[zqt3344 21]

Well, what is he then. please inform us.......

Maybe you should read up on him. I posted a link in this thread to the economist, they have a wealth of information about his tenure of the past decade.

[The_Dude 1,142]

Well, what is he then. please inform us.......

Maybe you should read up on him. I posted a link in this thread to the economist, they have a wealth of information about his tenure of the past decade.

Is it really that much of a burden to ask that you inform yourself? Come on, reading is not that hard curious george.

[Danno 1,228]

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

IN the first part, it actually sounded like Obamer with all the bank and business take overs.

But I am certainly not "paranoid" about Obama turning the country toward socialism, Obama simply fastracking things but certainly not the sole supporter of creating a "Collective" system run by WAshington. To me it has more to do with being a govt. run collective than socialism at this point.

So you have a MULTI-FAIL going no here.

-WhaTS GOING ON IN VEN. IS NOT REALLY SOCIALISM.

- You misrepresented my view on Obamer

Other than that, you get a "B" for adding worthy reading material to the board.

[The_Dude 1,142]

For those of you, so worried about the direction of our country. Paranoid about president Obama turning the country into a socialist state. Here is a small article about what REALLY happens when a president is turning a democratic state into a socialist state. This is the stated ambition of Hugo Chavez, read up on him and his tenure so you can identify the benchmarks of a socialist state transformation. But be aware, that lending money to banks in order to stabilize them and to be a catalyst to lending and investment is not the same as nationalizing a bank, no matter how much you think it is.

IN the first part, it actually sounded like Obamer with all the bank and business take overs.

But I am certainly not "paranoid" about Obama turning the country toward socialism, Obama simply fastracking things but certainly not the sole supporter of creating a "Collective" system run by WAshington. To me it has more to do with being a govt. run collective than socialism at this point.

So you have a MULTI-FAIL going no here.

-WhaTS GOING ON IN VEN. IS NOT REALLY SOCIALISM.

- You misrepresented my view on Obamer

Other than that, you get a "B" for adding worthy reading material to the board.

First of all Danno, you are the one who is failing here. You fail to grasp what the man says himself as well as your own posts. I know you aren't too familiar with comedy or sarcasm, so I find it a bit of a stretch to think that every time you say that obama is a socialist trying to turn this country toward socialism is you being sarcastic. More likely, you're just parroting whatever it is that Rush or Mark Levin has just said on the radio. If Hugo Chavez says he's trying to move the country toward socialism than I take him at his word. If you look at his actions, ie nationalizing many industries and foreign investment as well as redistrubiting resources, I take that as a move toward socialism. There is a difference between Venezuela being a socialist state and moving towards it, despite what you may believe.

I'm so glad that you feel the economist is a worthy read. That is the gold seal that makes it worthwhile.

[NickD 203]

Well, what is he then. please inform us.......

Maybe you should read up on him. I posted a link in this thread to the economist, they have a wealth of information about his tenure of the past decade.

Hugo Chavez is a dictator, first class dictator at that. He, taking money from the rich is certainly true, but he is not giving it to the poor, and plenty of poor they do have in that country, just mountain after mountain loaded with shacks. But he is being quiet about the electricity they are still off the grid with the main reason, even his police department is afraid to go up those countless mountains. What he is doing with the money is spending billions of it to buy arms from Russia. And yes, he will win the next election, for the last referendum, used his troops armed with AK-47's do down any demonstrations and to control the vote.

[one...two...tree 2,762]

Well, what is he then. please inform us.......

Hugo Chavez is a dictator, first class dictator at that. He, taking money from the rich is certainly true, but he is not giving it to the poor, and plenty of poor they do have in that country, just mountain after mountain loaded with shacks. But he is being quiet about the electricity they are still off the grid with the main reason, even his police department is afraid to go up those countless mountains. What he is doing with the money is spending billions of it to buy arms from Russia. And yes, he will win the next election, for the last referendum, used his troops armed with AK-47's do down any demonstrations and to control the vote.

Well said.

[The_Dude 1,142]

Well, what is he then. please inform us.......

Maybe you should read up on him. I posted a link in this thread to the economist, they have a wealth of information about his tenure of the past decade.

Hugo Chavez is a dictator, first class dictator at that. He, taking money from the rich is certainly true, but he is not giving it to the poor, and plenty of poor they do have in that country, just mountain after mountain loaded with shacks. But he is being quiet about the electricity they are still off the grid with the main reason, even his police department is afraid to go up those countless mountains. What he is doing with the money is spending billions of it to buy arms from Russia. And yes, he will win the next election, for the last referendum, used his troops armed with AK-47's do down any demonstrations and to control the vote.

Interesting. I had heard about him using the military to round up groups of people who were against him, but had not heard about him not helping the poor. I've read some articles about him trying to help the poor by setting price ceilings on staple products. But all this does is restrict the food supply because food vendors lose money selling their products and end up selling the bulk of their food to restaurants to get around the price ceiling. I suppose it would be a good idea...... if he would provide money to subsidize the difference in price from market price to the price ceiling.

So I suppose a more apropos description of venezuelas government would be "Dictatorship in disguise as a Socialist Movement"?