February 23, 2007  ECrisis is delighted that the Congress of Ecuador, the National Assembly, is set to investigate the bond market manipulations of the Rafael Correa team in lock step with the Hugo Chavez market manipulation team. We wish them godspeed, safety and surety in these monumental steps. We can only pray that justice is fair and swift.

News today of the steps from the Congresspersons in Quito, who constitutionally retain the right and most importantly, the sole obligation of oversight on Correa’s missteps, reached leading Wall Street analysts such as the top Emerging Markets analysts at Goldman Sachs in New York. Their 2-23-07 Research Report noted,

“ECUADOR - National Assembly to Investigate Volatility Created by Government Over 2030s Coupon Payment

The National Assembly Audit Committee will summon Finance Minister Patiño to testify in order to investigate the volatility created in the market by the government decision to announce that it would not pay the coupon on the 2030s on the due date (February 15) only to backtrack on the decision and mandate the payment 48 hours later.

Comment: The commission suspects that the volatility created by the government backpedaling on the original announcement might not have been casual and might have been used by unidentified entities with inside information to profit from the market price reaction.”

In other words, that Ecuador is investigating debt and bond market manipulations by the Correa team which already exhibit more than enough probable cause on these dirty bonds as to rattle Wall Street. No one believes that Minister Patino will factually detail Correa’s steps. This is the Correa administration hard at work…working hard to manipulate bond prices for profiteering. The first item for review is: who holds most of these bonds as rumors on the street tell us that they are held mostly by murky Venezuelan-connected arbitrage players. Sovereign debt carries the burden of disclosure as it is the citizens of Ecuador who will pay and pay for this profiteering to benefit the few.

Every major international newspaper from The Wall Street Journal, the Financial Times and the Latin Business Chronicle as well as leading Wall Street advisors have raised alarm bells regarding Rafael Correa’s politics, his intentions and his debt market manipulations. It is a positive sign for freedom lovers that Ecuadoreans may begin to review the facts regarding this obvious criminal self enrichment scheme underway in two capitols. We can only hope that numerous actors step forward and turn states’ evidence in this matter to assist the investigation and for once in their lives acting like a citizen patriot.

What is increasingly clear is a systemic state engineered kleptocracy under the Correa and Hugo Chavez schemes. This is also called racketeering to manipulate prices and defraud investors. Can you say “crime” in any other way?

We note that Hoy  posted a notice that U.S. ambassador Linda Jewell will hold an open line forum on Friday, February 23, 2007 for questions. We wonder what she would possibly tell Ecuadoreans about what she was thinking when she gushingly told Correa, the well known supporter of Castro and Hugo Chavez that ‘ the U.S. is with him.’ We simply cannot understand under whose instructions she uttered such nonsense and what it means for the U.S. government to support known communist supporters such as Rafael Correa whose very words denounce the U.S. and all that it stands for, including a very American aversion to crime. Perhaps Jewell meant that she knew that the speculators- murky and unknown and decidedly criminal- were cheering the entire team of Correa ingénues, also known for their CHE! crooning and anti-U.S. camp fire singing.

The U.S. ambassador Jewell has much to account for, including her events-engineering enabling comments that the USA stands with Correa who hates the U.S. Perhaps she will finally reveal under whose instructions she acted….or perhaps it was her friends with the Senator Dodd team who thoroughly enjoy their close ties with other off shore hedge fund murky masters of arbitrage and market manipulation such as George Soros, whose own activists are crawling across Quito in many forms to assist in the anti-Plan Colombia events underway. Or maybe not. Perhaps it comes now as no surprise that U.S. ambassador Jewell refuses to support any meaningful rule of law reforms in Ecuador. Or maybe it is no surprise at all.

Correa’s crimes are unraveling. There is no confidence in his capacity to lead a nation while he is beavering away at manipulating his own citizens as well as teaming with bond market manipulators for self gain, political or financial profiteering. In the end, it is the Ecuadoreans themselves who will suffer from his crimes committed in their name and for his selfish purposes. As such we note that U.S. ambassador Jewell was really wrong once again. The USA does not stand for presidents who engage in racketeering and market manipulations, among other crimes. It is still called a crime. Can you spell aiding and abetting criminals? It spelled state racketeering so perverse that it can safely be said that Ecuador no longer deserves to use (and abuse) the U.S. dollar for its engineered abuse of its own financial house, relying on the stability of the U.S. dollar to mask what its own volatility would reveal. The U.S Treasury and the U.S. Federal Reserve now has a vested interest in the central government of Rafael Correa and will be closely observing the upcoming efforts, no matter how much U.S. ambassador Jewell tells us all that Rafael Correa is backed by the U.S. when he is not. Rafael Correa’s illegal efforts to violently remove the sole oversight by law held by the congress of Ecuador which could reveal by Assembly review his bond market manipulations is the Assembly and its important legal work must proceed with no unfair interference. Ecuador’s congress still stands against great odds and under serious threat. It is no wonder Correa wants them gone and their oversight capacity to review his crimes – and his deals with Hugo Chavez- gone with them. If Ecuadoreans are so vapidly self-absorbed as to not raise one issue in self defense against this bankrupting president Correa and assist Correa in handing himself carte blanche to commit further crimes, they can only blame themselves and personal bankruptcy.

There is no doubt that these new financial instruments for arbitrage and speculation are challenging to understand. For this, we encourage Ecuadoreans to demand independent forensic audits. Far better to import actual experienced, independent forensic auditors who should review Petroecuador’s machinations while they are at it inasmuch as this oil mess should not even qualify for entry in to OPEC, no matter how much Hugo Chavez wants another voting member. Hugo Chavez wants a lot of things from Ecuador. Ecuadoreans need to just say no to Hugo and his bag men and say yes to liberty.

-Pedro Camargo for ECrisis