Correa's Corrupt Mismanagement is Too Expensive: He Needs to Go
November 15, 2008 BLOOMBERG news reports today on the overpaid George Soros man Jeffrey Sachs, partner also with ALBA Bank advisor and Soros man Joe Stiglitz paid default advice to then president Mahuad, "Ecuador, which last defaulted in 1999, needs an oil price of $95 to cover all the spending in its budget and a price of $76 to avoid depleting its $6.3 billion of foreign reserves, according to Barclays Capital Inc. " It is past time for OPEC to boot out Correa's oil scamming government as member of OPEC. Then again, the USA should revoke their ridiculous excuse for gifting Ecuador with free trade in return for nothing but dishonesty. Then again, the OAS should kick out Ecuador from the OAS for its failure to demonstrably perform as a democracy.
Ecuador "needs" oil trading at $95 a barrel? OPEC's ppb one thing; oil is today seeing oil traded under $60 per barrel. And oil has been traded this last week in the upper $ 50 to upper $60 band. Chavez and Correa, bound as they are to profits from off the books spot oil trading for personal fun and profit, claim their budgets are suffering when in fact it is their off the books dirty wallets suffering. Ecuador "needs" oil at $76 a barrel to "avoid" depleting its debt pay back fund? Ecuador "needs" a lot of things but it does not "need" $95 a barrel oil. It "needs" honest government and to stop lying to itself, lying to the world and grow up and stop playing adolescent, undereducated, smelly manipulative games with its ethics and its oil based economy.
The DOW JONES wires noted, "Ecuador has rattled investor confidence with its decision to delay a scheduled coupon payment on its Global 2012 bond that was set for Saturday.
With the announcement by Finance Minister Maria Elsa Viteri of a delay during a 30-day grace period in the $30.6 million payment, Ecuador has again raised doubts about its debt servicing intentions.
Debt strategists say the move has also raised questions about whether the government might be favoring some investors deliberately.
Ecuador's bonds began to move sharply Thursday as rumors of a delay began to spread, with some suggestions that falling oil revenues were involved.
"The announcement of the delay could have benefited speculators and favored friendly sovereign wealth funds, such as, for example, in Venezuela, to the detriment of long-term investors," said Ramiro Crespo, an economist with investment bank Analytica Securities.
He said the delay has helped create the appearance that "certain players may have received inside information."
On Friday, Ecuador's risk premium, or spread, widened 66 basis points in early afternoon trading to 3,745 basis points over Treasurys for a negative daily return of 15.41%.
The Global 2012 was actually bid 3 11/16 higher at 35, according to Reuters, apparently recovering after earlier expectations that the minister would announce an outright moratorium on debt payments.
Former government official and lawyer Juan Carlos Arizaga said Ecuador's use of the grace period put into evidence "a lack of coherence" in its debt management.
Yet the debt decision has a precedent.
In February 2007 Ecuadorean officials announced they would use the grace period in a scheduled $135 million payment on the Global 2030 bond. Instead, the government made its scheduled payment on time.
Opposition politicians at the time charged that the market turmoil that followed the announcement of a delay allowed some foreign banks to benefit.
On Friday, Viteri said the government wanted to use the grace period to study the recommendations of a high-level audit carried out by a government-led debt commission.
That commission is expected to release its report next week.
The government of President Rafael Correa, which set up the commission, has frequently said it won't honor debt it calls "illegitimate" or "illegal."
It has also said it would give higher priority to social spending over debt servicing.
Viteri said Friday that if the need arises, then Ecuador could turn to the government of Venezuela for financing.
Government Has Resources To Pay Debt
Various banks say the amount of the upcoming debt payment is small, while government revenues are still solid enough to allow for the payment.
Economists say that, from an economic and financial standpoint, the government should be able to remain current on its external debt service obligations.
Outstanding stock of Ecuador's global bonds total $3.86 billion, or just 8% of gross domestic product, while total external public debt amounts to "a very moderate 20.6% of GDP," Goldman Sachs economist Alberto Ramos said in a report.
He noted that "there are no principal amortizations on the Globals until 2012, and interest payments are under $400 million per year."
"Even with the sharp decline in oil prices, the country's decision to use a grace period to delay the coupon payment doesn't make much sense," Ramos said.
"It is abundantly clear the relief obtained from a hypothetical default/restructuring of external debt would be very minor while the associated costs could add up," he added.
Credit Suisse's Diego Sasson said in a report that, "There is little upside (financially or politically) and, potentially, a large downside from not paying the public debt service."
Credit Suisse said that should Ecuador default, then holders of defaulted bonds could try to attach the assets of the government abroad, such as Petroecuador's oil tankers.
Stuart Culverhouse, chief economist with London-based Exotix Ltd., said the delay doesn't affect whether Ecuador will again be able to tap capital markets. With its poor debt rating, "It wasn't going to happen anyway," he said.
"What it does do is to deter foreign direct investments at a time when the country needs financing, and when the country really needs growth," he added.
Correa, an economist by training, came to office in early 2007 on a leftist policy platform.
Since then, he has moved Ecuador much closer to socialist leaders in the region, such as Venezuela's Hugo Chavez.
Ecuador has three overseas bond issues outstanding: $510 million in bonds due 2012, which carry a 12% coupon; $650 million of 9.375% bonds due 2015; and $2.7 billion of 10% bonds due in 2030.
Here is another from Bloomberg news. This piece tells us, "Correa will use the 30-day grace period on the bond payment, which is due tomorrow, to analyze legal opinions, Finance Minister Maria Elsa Viteri said at a news conference in Quito.
The price on the $510 million bond maturing in 2012 plunged to as low as 14 cents on the dollar, sending yields over 100 percent, as investors braced for the first sovereign default since the global financial crisis deepened in September. Standard & Poor's cut the country's rating three levels today to CCC-.
``It's up to the president to analyze the alternatives,'' Viteri said. ``All options are on the table.'' Correa, a 45-year-old economist who laces his speeches with phrases in the native Quechua language, has been threatening since the 2006 campaign to halt payments on debt he determines is ``illegitimate.'' In September, he called a debt auditing committee's preliminary findings ``harrowing,'' saying some of the obligations were fraudulently contracted. ``We're waiting for the opinions, recommendations so that the president can make a truly positive decision,'' Viteri said. Ecuador's finances have come under strain as oil, which accounts for 60 percent of the country's exports, has plunged 61 percent from a record high in July to $57.23 a barrel. Ecuador, which last defaulted in 1999, needs an oil price of $95 to cover all the spending in its budget and a price of $76 to avoid depleting its $6.3 billion of foreign reserves, according to Barclays Capital Inc. ``They are burning reserves,'' said Eduardo Levy-Yeyati, an emerging-markets analyst at Barclays. ``The question is whether they will keep paying if oil prices don't recover.'' ``The willingness to pay is obviously not there,'' said Alberto Bernal, an emerging-markets strategist for Bulltick Capital Markets in Miami...The bonds' price sank 5 cents on the dollar to 20 cents after plunging 17 cents yesterday. The bond traded at 99.5 cents on Sept. 8, a week before the collapse of Lehman Brothers Holdings Inc. deepened the global economic slump that has throttled demand for crude oil.
Correa's government has used this tack before, saying in February 2007 that it would wait till the 30-day grace period to make an interest payment. Correa then reversed course, opting to make the $135 million payment on time. ``Ecuador is the only country that has explicitly said it might not repay debt,'' said Cathy Elmore, who manages $700 million of emerging-market debt at WestLB Mellon Asset U.K. Ltd. in London. Still, she said she was surprised by today's move. ``I don't think anyone expected it right now. It seems odd to me. Their fiscal situation at the moment is okay.''
And the day before, Bloomberg's sourced Alberto Ramos of Goldman Sachs: ``From a financing perspective, it makes no sense to default,'' Ramos said. And still the facts are before anyone with eyes to see and ears to hear that the Correa regime is a corrupt cartel, jiggering bond markets with their pre-rigged insider maneuvers.
We at ECrisis say that Correa's cartel should never act as market manipulators. In fact, it is relevant to ask just who is advising Correa on his dirty speculative games? While we all know that Barack Hussein Obama and his political juggernaut are overwhelmingly in tandem with the Soros machinery, also crawling all over Ecuador and the Andes these days, we do not say that Soros is advising the Correa market crimes, although actors from the Soros teams are constantly with Correa and his locusts. But just because a person tries to look like the face of "Greed is Good" movie icon Gordon Gekko, does not actually make one Gordon Gekko, a movie role played by actor Michael Douglas. What's next-? Chavez to slick back his hair too in a faux Wall Street operator hair do, a la Soros, trying to look like Michael Douglas here this past Thursday under oath before the US Congress wherein Soros said nothing and was as useful as we have come to expect, which is zero:
You will also recall that the above photographed man spent billions of dollars to engineer a HATE Bush: Bush lied about Iraq campaign and has spent untold billions to legalize drugs. The NEW YORK TIMES on Friday reported of all this hate Bush effort, that all along the botched CIA information was authored by one woman, currently working for Barack Obama and also Soros, also previously working for Lehman Brothers as a "risk analyst: "Jami Miscik, leading a review of American intelligence agencies, was the head of intelligence analysis at the Central Intelligence Agency during its biggest embarrassment: the botched assessments about Iraq’s weapons of mass destruction. Then she moved on to become a senior official managing risks in emerging markets for the investment bank Lehman Brothers, until its collapse this fall." But thanks to all the derivatives and hedge fund money movements off shore for the sole self enrichment of a few Democrats and foreign "sovereign funds" as well as some pretty shady characters who can lay down at least a million to play, Wall Street only exists in unmeaningful ways any more. The money has gone to leverage bets....untaxed, offshore. We remind: Wall Street does not exist any more. It is gone. No investment banks exist: all have converted to highly speculative swaps trading and have no interest in growing investments, just the Democratic Party protected by non-regulations, off the books, off shore derivatives funds mostly run by Democrats and foreign nationals. It is a lie to say that the US Republicans run hedge funds. besides 2/3 of these funds will be out of business soon, themselves victims of what they themselves did to others- bet against them so they will fail. It is all about crafting excuses for failure and then buying low...at bargain basement process. None of this would matter except that no one- no one at all- is left to grow real, accountable on shore taxable finances anymore even as the capacity for derivatives to feed like locusts off the current crop du jour diminishes, leaving less vibrant, stubborn economies, always ripe for the soothing global socialists foot holds.
The G 20 meets today in Washington to press for what the USA still today will not support: global regulatory controls, a project pushed by Soros and every other socialist, whether in the closet/off the books, or not. But about 50% of the world still rejects socialism, which is one step from communism for he masses with cartel self enrichment for the politburo:
November 14, 2008
Why Europe is secretly afraid of a socialist America
By James Lewis
Suppose you've been living under the protective wings of a benevolent superpower for sixty years. And suppose you've used that big half century to take off on an endless vacation -- spending all your tax money to buy votes for the socialist Ruling Class. It's been one long, grand, drug-infested, sex-drenched, self-indulgent, tabloid party scene. Any time danger threatens you look to Washington for protection. The rest of the time you noisily abuse those Yankee imperialists, merely to boost your fragile ego. Corruption has become pervasive.
That's Europe today.
What a sweet deal.
But now you see your guardian superpower electing a guy who wants to follow your example. Whoops! Time to sober up. Fast.
Yes, you went hoarse cheering Obama's ego trip at the Berlin Victory Monument, because you love the idea that O will teach America to love Eurosocialism forever and ever. But shivers are running up and down your spine --- because if he is what you think he is, America won't be there any more to save you. It will just slide into vegetarian nihilism and leave Europe to the New Soviet Empire.
Europe would crumble like a soggy crouton without America's commitment to its defense. We saw that happen three times in the 20th century, and the bad news is that it's starting again. Real danger is at the gates; Europe's Ruling Class is in denial; and half of it is preparing to surrender to the Russians or the Muslim fascists, whichever gets there first.
The Archbishop of Canterbury welcomes a future of Sharia for Britain. Prime Minister Gordon Brown wants to cannibalize your dead body for parts for the National Health Service without your prior consent. Two years ago the European Union solemnly promised to supply six helicopters to save endangered Africans in Chad -- and they haven't been able to get those choppers going yet. Those African civilians are long dead, and the Eurocrats are still dithering.
Shakespeare had it in Henry VIII, "Farewell, a long farewell to all my greatness!" Except that Europe always dreams of its own greatness. While we were having the most mendacious election in history, Europe chose Beethoven's Ninth Symphony, the Choral Movement, to be its new national anthem. But Europe's latest imperial illusion is Obama, a Eurosocialist to the core. Europe would love to control US policy; and in the O years it might succeed. Yet by itself it plays helpless.
The tales of Europe's futility are endless, because its actions have no visible consequences. Dead fetuses don't raise a fuss. Dead Africans in Chad and the Sudan never show up on BBC TV. Neither do HIV victims of the sexual revolution, burned-out junkies of the drug revolution, or assisted suicides of the elderly, thanks to the national health-care revolution. It's a Progressive's Dream Come True. All the failures and mistakes are ignored by the Leftist media.
Well, if America becomes O-merica, the consequences will finally arrive with a loud thud in London, Paris and Berlin. Europe may have to grow up. Because America will no longer have the power or the will to act. It will be Carterized.
So the Euro-Left is sounding scared. Take the Guardian, the noisy cabal of anti-Americans who went into shrieking paroxysms when George W. Bush overthrew the bloody tyrant of Baghdad. The Guardianistas were shocked by America's willingness to fight for a cause that Winston Churchill would have considered to be civilized and honorable. The Brit Left hasn't seen that much heterosexual gumption since World War Two. They were appalled, my dear.
But today, one week after the O Revolution in America, the Guardian suddenly sounds like the Wall Street Journal -- telling its readers not to worry, that nothing is going to change.
We see headlines like:
"Why America will not turn to the left"
Hold the red carpet: amid the euphoria, states find their own reasons for doubt.
The Guardian sounds worried that under Obama America might leave the Philippines to its Muslim rebels, or that it might stop defending free capitalist trade in the world's oceans.
Those headlines come from the same scribblers who soft-pedaled Putin's brutal invasion of Georgia just six months ago. The same folks spent years noisily sneering at the danger of Iranian mullahs armed with nukes. Every single day of the Bush years the Guardian ripped us another one. For decades they peddled multicultural nonsense to browbeat their domestic enemies and smeared dissenters as racists. They went weak in the knees for radical chic, Islamofascist style, and scoffed at democracies under deadly assault, like Israel, the elected governments of Iraq and Afghanistan and most recently Georgia. They imposed a Politically Correct speech code on everyday life in the United Kingdom.
It would be poetic justice for the European Left to get exactly what it's been asking for. Unfortunately that would be bad for the United States and the civilized world. If the US withdrew from Europe, would you trust them to behave decently? I wouldn't. They would instantly sell out to the nearest Putinista or the richest Saudi Prince, or both.
That's the real American dilemma when it comes to the Left, here and abroad. The big question about the radical Left is always - should grownups let them cross the street alone? Can you ever trust them?
We will find out the answer very soon.
If there are any grownups in Washington in the coming administration -- a very big "if" -- they will have to answer that question every single day. If the Left follows its instincts and the American military are systematically weakened, cut down and demoralized, Europe may realize its fondest wish.
No more American guardian angel.
It's what they secretly fear.
As to Ecuador and its lawless lands under its ridiculous so called constitution, claiming as it does that all education is for the sole purpose of further more state robots and not to increase the very gifts God gave mankind, such as a well informed mind, the Miranda Center in Caracas is served by numerous global scum, from the old EURO reds, the Allende Chileans, the Foro de Sao Paulo and the USA's half baked domestic terrorist and fully formed communist indoctrinator, Obama's friend and co author of Ecuador's disgusting new communist screed: Bill Ayers, seen here from Michael Ramirez, Investor's Business Daily:
Monday, November 17, 2008
Yes- Ayers is also with Chavez, too and Castro as well. And he is really a reprehensible fellow, stupid really. This is what you get when you abandon the gifts of free speech and an inquisitive mind for the ever lasting glories of manipulative living: pond scum like this.
Fear does not need to gainsay. We say: nervous fears stem from failure of real wisdom [educational and real life common sense based on values] and conviction sometimes based on unstable conditions [naturally occurring or man made] with eroding confidence. Even so, Bush's farewell to arms on Thursday of this week, so to speak, talk in NY was possibly one of his best. Contrast Bush's words again to the Soros speeches of late that the USA "must" bail out the globe. We say- why doesn't Soros [who sustains his money by rarely being transparent or accountable in his betting business, rather by mobilizing paid, not randomly occurring astroturffing political activists for deflection and manmade `reflexive' shocks] just bail out the globe instead of betting against weaknesses? Why not do something helpful for once, like growing economies legitimately? Look for the team Soros to whine a lot this week end about "capitalism" and try to sell global financial regulators- based in Belgium.
Like their new alternative democracies, the proposed `new world financial order' is not new and it is not order and it is not capitalism. The G- 20 look like idiots today demanding Something for Nothing...and offering even less viable solutions. But these global socialist locusts who prey off of other people's hard work- Something for Nothing- will lie low for a while and will be back.
Here is how one British writer, Peter Hitchens correctly described 11-10-08 in the LONDON MAIL about what is happening and what Soros helped sell to the USA, also called lots of hate campaigns [and happily sold to the pro FARC Andean idiots]:
The night we waved goodbye to America... our last best hope on Earth
Anyone would think we had just elected a hip, skinny and youthful replacement for God, with a plan to modernise Heaven and Hell – or that at the very least John Lennon had come back from the dead.
The swooning frenzy over the choice of Barack Obama as President of the United States must be one of the most absurd waves of self-deception and swirling fantasy ever to sweep through an advanced civilisation. At least Mandela-worship – its nearest equivalent – is focused on a man who actually did something.
I really don’t see how the Obama devotees can ever in future mock the Moonies, the Scientologists or people who claim to have been abducted in flying saucers. This is a cult like the one which grew up around Princess Diana, bereft of reason and hostile to facts.
It already has all the signs of such a thing. The newspapers which recorded Obama’s victory have become valuable relics. You may buy Obama picture books and Obama calendars and if there isn’t yet a children’s picture version of his story, there soon will be.
Proper books, recording his sordid associates, his cowardly voting record, his astonishingly militant commitment to unrestricted abortion and his blundering trip to Africa, are little-read and hard to find.
If you can believe that this undistinguished and conventionally Left-wing machine politician is a sort of secular saviour, then you can believe anything. He plainly doesn’t believe it himself. His cliche-stuffed, PC clunker of an acceptance speech suffered badly from nerves. It was what you would expect from someone who knew he’d promised too much and that from now on the easy bit was over.
He needn’t worry too much. From now on, the rough boys and girls of America’s Democratic Party apparatus, many recycled from Bill Clinton’s stained and crumpled entourage, will crowd round him, to collect the rich spoils of his victory and also tell him what to do, which is what he is used to.
Just look at his sermon by the shores of Lake Michigan. He really did talk about a ‘new dawn’, and a ‘timeless creed’ (which was ‘yes, we can’). He proclaimed that ‘change has come’. He revealed that, despite having edited the Harvard Law Review, he doesn’t know what ‘enormity’ means. He reached depths of oratorical drivel never even plumbed by our own Mr Blair, burbling about putting our hands on the arc of history (or was it the ark of history?) and bending it once more toward the hope of a better day (Don’t try this at home).
I am not making this up. No wonder that awful old hack Jesse Jackson sobbed as he watched. How he must wish he, too, could get away with this sort of stuff.
And it was interesting how the President-elect failed to lift his admiring audience by repeated – but rather hesitant – invocations of the brainless slogan he was forced by his minders to adopt against his will – ‘Yes, we can’. They were supposed to thunder ‘Yes, we can!’ back at him, but they just wouldn’t join in. No wonder. Yes we can what exactly? Go home and keep a close eye on the tax rate, is my advice. He’d have been better off bursting into ‘I’d like to teach the world to sing in perfect harmony’ which contains roughly the same message and might have attracted some valuable commercial sponsorship.
Perhaps, being a Chicago crowd, they knew some of the things that 52.5 per cent of America prefers not to know. They know Obama is the obedient servant of one of the most squalid and unshakeable political machines in America. They know that one of his alarmingly close associates, a state-subsidised slum landlord called Tony Rezko, has been convicted on fraud and corruption charges.
They also know the US is just as segregated as it was before Martin Luther King – in schools, streets, neighbourhoods, holidays, even in its TV-watching habits and its choice of fast-food joint. The difference is that it is now done by unspoken agreement rather than by law.
If Mr Obama’s election had threatened any of that, his feel-good white supporters would have scuttled off and voted for John McCain, or practically anyone. But it doesn’t. Mr Obama, thanks mainly to the now-departed grandmother he alternately praised as a saint and denounced as a racial bigot, has the huge advantages of an expensive private education. He did not have to grow up in the badlands of useless schools, shattered families and gangs which are the lot of so many young black men of his generation.
If the nonsensical claims made for this election were true, then every positive discrimination programme aimed at helping black people into jobs they otherwise wouldn’t get should be abandoned forthwith. Nothing of the kind will happen. On the contrary, there will probably be more of them.
And if those who voted for Obama were all proving their anti-racist nobility, that presumably means that those many millions who didn’t vote for him were proving themselves to be hopeless bigots. This is obviously untrue.
I was in Washington DC the night of the election. America’s beautiful capital has a sad secret. It is perhaps the most racially divided city in the world, with 15th Street – which runs due north from the White House – the unofficial frontier between black and white. But, like so much of America, it also now has a new division, and one which is in many ways much more important. I had attended an election-night party in a smart and liberal white area, but was staying the night less than a mile away on the edge of a suburb where Spanish is spoken as much as English, plus a smattering of tongues from such places as Ethiopia, Somalia and Afghanistan.
As I walked, I crossed another of Washington’s secret frontiers. There had been a few white people blowing car horns and shouting, as the result became clear. But among the Mexicans, Salvadorans and the other Third World nationalities, there was something like ecstasy.
They grasped the real significance of this moment. They knew it meant that America had finally switched sides in a global cultural war. Forget the Cold War, or even the Iraq War. The United States, having for the most part a deeply conservative people, had until now just about stood out against many of the mistakes which have ruined so much of the rest of the world.
Suspicious of welfare addiction, feeble justice and high taxes, totally committed to preserving its own national sovereignty, unabashedly Christian in a world part secular and part Muslim, suspicious of the Great Global Warming panic, it was unique.
These strengths had been fading for some time, mainly due to poorly controlled mass immigration and to the march of political correctness. They had also been weakened by the failure of America’s conservative party – the Republicans – to fight on the cultural and moral fronts.
They preferred to posture on the world stage. Scared of confronting Left-wing teachers and sexual revolutionaries at home, they could order soldiers to be brave on their behalf in far-off deserts. And now the US, like Britain before it, has begun the long slow descent into the Third World. How sad. Where now is our last best hope on Earth?
ECrisis says: donde? In the USA, Obama promised free citizenship to all illegal Hispanics, etc if they would but vote for him and their huge voter turn out [albeit illegal] won the day. Something for Nothing. As we see in Ecuador, Faustian bargains never quite work out, do they???
-Pedro Camargo for ECrisis