Category: Latin America

Finally………

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Brazil has finally made its selection of the Saab Gripen for their air force:

Buying a new jet fighter can be a long-drawn-out process. Brazil, after many years of planning and procrastination, has finally signed a contract for its future combat aircraft.

Officials from the Brazilian Defense Ministry’s Aeronautics Command and the Swedish Saab Group put pen to paper recently, and the Brazilian air force is now set to receive 36 Gripen NG fighters.

The jets, worth a little over $5.4 billion, include 28 single-seat Gripen Es and eight twin-seat Gripen F aircraft. Deliveries will begin in 2019 and will be completed in 2024.

………

In late 2007, the government formally relaunched the new fighter project, and at the time excepted to acquire 36 multi-role jets at a cost of $2.2 billion. By July 2008 the F-X2 project had split into two phases. In the first, Brazil would get 36 new fighters, blowing the $2.2 billion budget.

………

By September 2009 it looked as if the twin-engined Rafale had cinched F-X2. Brazil’s president Luiz Inácio Lula da Silva announced the Rafale’s victory even before the competition was over. Saab and Boeing were both furious, and Lula instead declared that the government would delay the F-X2 decision until after a new president took office.

In January 2011, new president Dilma Rousseff deferred the decision to 2012 owing to budgetary problems. As the defense budget began to feel the cutbacks, the pricey Rafale started to lose its edge. At this stage, the program cost ballooned to $8 billion. Rousseff launched new comparative studies and called upon Embraer for its opinion.

The two cheapest options now became the front-runners. The Super Hornet offer—for 36 fighters—was for $7.5 billion, while the Gripen offer cost $6 billion. The Rafale offer exceeded $8 billion.

There are a number of ways to cost aircraft, and it can vary by a lot.

The numbers here run to about $150 million a plane, which I believe is the total weapons system cost, while the quotes that we normally see in the press for US systems are flyaway costs, which looks to run something like 50% of total system cost, so this is actually significantly cheaper than the F-35 JSF.

Still, $150 million a pop?

That’s a big jump from the less than $5 million that the F-4 Phantom in its heyday.

Saab Gripen Deal Pending Between Brazil and Argentina

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It appears that SAAB wasn’t kidding when they promised that the Brazilians could involve their defense industry more heavily with the Gripen than with competing platforms.

It appears that non only are the Brazilians going to manufacture their own fighters, but they will be manufacturing Gripens for Argentina as well:

Saab AB (SAABB) said it’s close to sealing a contract with Brazil that will secure 36 export orders valued at $4.5 billion for the Swedish company’s Gripen jet-fighter while establishing production in the South American country.

Negotiations on the deal are moving forward according to plan and the ambition is to reach an agreement “in the near future,” Saab said today in a statement.

Saab signed a memorandum of understanding with Embraer SA (EMBR3) in July granting the Brazilian planemaker a leading role in Gripen production tied to the signing of an order. According to that deal, Embraer will share joint responsibility for developing a two-seat version of the latest upgrade of the jet and lead marketing efforts to sell it in Latin America.

Partnering with Brazil could give the Gripen a new lease of life after the program suffered a blow in May when Swiss voters rejected a 3.1 billion franc ($3.3 billion) order for 22 fighters that had been awarded 2 1/2 years previously.

Saab, where third-quarter operating profit of 258 million kronor ($35 million) fell short of the 300 million kronor expected by analysts, is pushing the Gripen against rival offerings from companies including Lockheed Martin Corp. (LMT:US), the No. 1 defense contractor, just as tighter military spending makes U.S. and European orders harder to come by.

Argentina Interest

A bridgehead in Brazil, where local firms may build as much as 80 percent of the Gripen E model and take on the bulk of development on the two-seat Gripen F, could open up sales to markets where defense budgets are under less pressure. A carrier version of the plane may be an option for Brazil, with Argentina, Ecuador and Mexico among possible export targets.

Brazil is already poised to discuss a possible deal to sell the Gripen to Argentina as part of a plan to boost aerospace cooperation, the defense ministry said this week, adding that terms could include some production component for its neighbor. Brazil’s own contract should be signed by December, it said.

Saab was chosen to fill Brazil’s F-X2 fighter requirement last December, fending off the Boeing Co. (BA:US) F/A-18 Super Hornet after allegations that the U.S. spied on President Dilma Rousseff. Paris-based Dassault Aviation SA (AM)’s Rafale also lost.

The Gripen is cheaper to own, and cheaper to operate than the competition, even platforms that are a half generation older like the F-16 and F-18.

If Saab can keep the line open until the true cost of the F-35 becomes clear to potential customers, and this is by no means a sure thing, they could have the Mirage III of this generation.

Not My Choice, but It’s a Start

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This post was corrected on 26 January, 2016.  

Dr. Dirk Markus has no connection to Aurelius Capital Management LP, the vulture fund in question.  

He is  the CEO of Aurelius Equity Opportunities, which is a completely unrelated financial firm, and is not involved with the attempted looting of Argentina in any way.

My apologies. 

Argentina is going to the International Court of Justic in the Hague:

Argentina has asked the international court of justice (ICJ) in The Hague to take action against the United States over an alleged breach of its sovereignty as it defaulted on its debt.

Argentina defaulted last week after losing a long legal battle with hedge funds that rejected the terms of debt restructurings in 2005 and 2010.

A statement issued by the ICJ, the United Nation’s highest court for disputes between nations, said Argentina’s request had been sent to the US government. It added that no action will be taken in the proceedings “unless and until” Washington accepts the court’s jurisdiction.

The US has recognised the court’s jurisdiction in the past, but it was not immediately clear if it would do so in Argentina’s case.

I guess that this is one avenue to take, though I think that the Argentinean investigation into possible violation of their laws by the vulture funds would likely be a better course of action:

Argentina’s markets watchdog on Monday launched an investigation into what it believes may have been unlawful speculation by holdout creditors whose litigation against the country for repayment of their defaulted bonds pushed it into a new default last week.

………

The head of Argentina’s Securities Commission Alejandro Vanoli said it had asked its U.S. counterpart for information on trade of Argentina’s sovereign debt and credit default swaps (CDS), derivatives used to insure against default.

The watchdog wanted to check if holdouts who rejected Argentina’s restructuring in the wake of its 2002 default held or traded CDS while they took part in negotiations with Argentina which could trigger a default.

“The use of insider information, which would be the case here, and market manipulation are crimes in Argentina, they are crimes in the United States, and they imply economic sanctions and eventually criminal sanctions,” Vanoli told a news conference.

While they might prevail at the ICJ, it is by no means a certainty, and it is also an open question as to whether or not the US government will obey that foreign court.

On the other hand, a prosecutor can indict a ham sandwich, and once they have file for extradition of the vulture funds senior staff.

Additionally, they could put a bounty on their heads, and if they were to promise a few million dollars for the apprehension and rendering of these people back to Argentina, you could be guaranteed that the pucker factor would skyrocket.

Additionally, it would be legal under US law, which grants extraordinary powers to bounty hunters.

If Argentina can win this, we deter from vulture fund f%$#ery, particularly if Mark Brodsky is delivered to Buenos Aires in chains with hoods over their heads.

Who Says That Irony is Dead?

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Remember the now debunked story about Senator Bob Menendez and a Dominican Prostitute from Tucker Carlson’s so-called news site Daily Caller?

Well, it turns out that they were not making it all up. The Daily Caller was used as a stooge for an intelligence operation carried out by Cuba:

Sen. Robert Menendez is asking the Justice Department to pursue evidence obtained by U.S. investigators that the Cuban government concocted an elaborate plot to smear him with allegations that he cavorted with underage prostitutes, according to people familiar with the discussions.

In a letter sent to Justice Department officials, the senator’s attorney asserts that the plot was timed to derail the ­political rise of Menendez (D-N.J.), one of Washington’s most ardent critics of the Castro regime. At the time, Menendez was running for reelection and was preparing to assume the powerful chairmanship of the Senate Foreign Relations Committee.

According to a former U.S. official with firsthand knowledge of government intelligence, the CIA had obtained credible evidence, including Internet protocol addresses, linking Cuban agents to the prostitution claims and to efforts to plant the story in U.S. and Latin American media.

The alleged Cuba connection was laid out in an intelligence report provided last year to U.S. government officials and sent by secure cable to the FBI’s counterintelligence division, according to the former official and a second person with close ties to Menendez who had been briefed on the matter.

The intelligence information indicated that operatives from Cuba’s Directorate of Intelligence helped create a fake tipster using the name “Pete Williams,” according to the former official. The tipster told FBI agents and others he had information about Menendez participating in poolside sex parties with underage prostitutes while vacationing at the Dominican Republic home of Salomon Melgen, a wealthy eye doctor, donor and friend of the senator.

A spokesman for the Cuban Interests Section in Washington, which functions as the island’s U.S. diplomatic outpost, did not respond to requests for comment.

The allegations against Menendez erupted in public in November 2012, when the Daily Caller, a conservative Web site, quoted two Dominican women claiming Menendez had paid them for sex.

The FBI investigated the prostitution claims but was unable to corroborate them. Last year, three Dominican women who had initially claimed to reporters that they had been paid to have sex with Menendez recanted their story.

BTW, the inestimable Charlie Pierce notes some additional irony here.

You noticed the name of the source that misled Tucker Carlson and His Evil Minions™?

Well, the name Pete Williams has a history:

And, it appears that the Cuban spooks may well have a more finely honed sense of humor than we previously have noticed. Once upon a time, a long time ago, there was a senator from New Jersey named Harrison Williams.Senator Williams was a Democrat of decent instincts,but he also was something of a grab-it-all and, one day, a phony Arab sheikh in the employ of the FBI dropped in on him with some money the sheikh said he’d like to share in exchange for Williams’s help in buying the output of a defunct titanium mine. This bit of American Hustle landed forced Williams to resign from the Senate and landed him in the federal sneezer for three years.

As it happens, because his given name was Harrison Arlington Williams, Jr., his friends all called the senator, “Pete.”

“Pete Williams.”

Well-played, Cuban spies. Very well-played indeed.

I think that I can authoritatively state that the schadenfreude drought is officially over.

I Would Expect to See More of This………

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Ecuador has expelled a military contingent from the US embassy:

Ecuador has ordered 20 U.S. Defense Department employees attached to the U.S. Embassy in Quito to leave the country next week, U.S. officials confirmed, further straining an already rocky relationship between President Rafael Correa and the Obama administration.

The Ecuadorean government made the request on April 7, asking the U.S. embassy in Ecuador to end the activities of the Security Cooperation Office by Wednesday, said Jeffrey Weinshenker, an embassy spokesman. He said that the civilian and military workers had been mainly engaged in joint programs with Ecuador to fight human smuggling and the drug trade.

………

In an email, U.S. State Department spokeswoman Angela Cervetti said, “[the U.S.] regrets that the outcome will severely limit our bilateral security partnership. Our close military cooperation over the past four decades has resulted in significant advances against drug trafficking, human trafficking, terrorism, and other transnational crime.”

But the Ecuadorean embassy in Washington characterized the closing of the Security Cooperation Office as part of an agreement with the Obama administration. “A core group of U.S. military attaches will remain, as typical for normal bilateral relations,” an embassy statement said.

In January, Mr. Correa had said that Pentagon workers were used to “infiltrate” Ecuador. The order ousting the Americans came days after Mr. Correa wrapped up a U.S. tour that included talks at Yale and Harvard universities and television interviews where he described himself as a “modern socialist” who wanted to improve relations with the U.S.

When juxtaposed with this:

Correa said he became aware of what he described as a bloated US military presence in his country after learning that four Pentagon personnel were aboard an Ecuadoran military helicopter that came under fire in October near the border with Colombia.

When you consider things like the role of the US Army School of the Americas, which educated generations of military juntas and coups in Latin America, it has to be a legitimate matter of concern for any government that military personnel and contractors are operating in military operations without the knowledge of the sponsoring government.

This is particularly of concern for someone like Correa who is not particularly friendly to the US agenda in that part of the world, particularly when one sees the sort of activities that the US engages in its neighbor Venezuela, where it is clear that there is an active attempt to destabilize the government.

The Shock Doctrine Being Applied Again in Venezuela

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And the major powers in Latin America are aware of this and stop it:

When is it considered legitimate to try and overthrow a democratically-elected government? In Washington, the answer has always been simple: when the US government says it is. Not surprisingly, that’s not the way Latin American governments generally see it.

 On Sunday, the Mercosur governments (Brazil, Argentina, Uruguay, Paraguay, and Venezuela) released a statement on the past week’s demonstrations in Venezuela. They described “the recent violent acts” in Venezuela as “attempts to destabilize the democratic order”. They made it abundantly clear where they stood.

 The governments stated:

their firm commitment to the full observance of democratic institutions and, in this context, [they] reject the criminal actions of violent groups that want to spread intolerance and hatred in the Bolivarian Republic of Venezuela as a political tool.

We may recall that when much larger demonstrations rocked Brazil last year, there were no statements from Mercosur or neighboring governments. That’s not because they didn’t love President Dilma Rousseff; it’s because these demonstrations did not seek to topple Brazil’s democratically-elected government.

The US has declared the Chavezista government to be our “Hitler of the week”:

An anonymous State Department spokesman was even clearer last week, when he responded to the protests by expressing concern about the government’s “weakening of democratic institutions in Venezuela”, and said that there was an obligation for “government institutions [to] respond effectively to the legitimate economic and social needs of its citizens”. He was joining the opposition’s efforts to de-legitimize the government, a vital part of any “regime change” strategy.

 Of course we all know who the US government supports in Venezuela. They don’t really try to hide it: there’s $5m in the 2014 US federal budget for funding opposition activities inside Venezuela, and this is almost certainly the tip of the iceberg – adding to the hundreds of millions of dollars of overt support over the past 15 years.

You can go to C&L for a more explicit critique of US foreign policy and our media’s lapdog reporting:

Would it help your perspective if I reminded you Venezuela has the largest oil reserves in the world, that Hugo Chavez nationalized the oil industry even more industries and that powerful interests have never stopped trying to take them back?

There’s an alternate version, one in which the usual suspects (World Bank, IMF) manipulate the currency, drive hyperinflation, cause food shortages and subsequent unrest. Add the former ruling class, once made wealthy by oil industry corruption, whose now-grown children still harbor resentment and anger over what their families lost (much like the members of the Cuban ruling class who fled after Castro) and are leading the opposition.

Netfa Freeman is even less circumspect.

And then you have the attempt to make the thoroughly corrupt Leopoldo Lopez a into a poster boy for a potential revolution.  Despite his role in the 2002 attempted coup, where it appears that he was knowingly involved in the sniping incident that was used as a justification:

Lopez played a key role instigating opposition demonstrators into taking an illegal march route towards the presidential palace, where snipers fired on protesters as part of the opposition’s plan to justify the coup.

See also here for Max Blumenthal’s take on Lopez.

Chavez was to a large degree a product of US Government meddling, but it appears that Obama and Kerry see the solution to any problems therein is more US government meddling.

This is not only wrong, but stupid.

Saab Wins Brazil’s Fighter for Gripen NG by Turning Over Recipe to Special Sauce

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It’s been a long time coming, and through a number of odd twists and turns.

Earlier in the process, then Brazilian President Lula da Silva said that there was a deal with the French for the Dassault Rafale, largely for foreign policy reasons, but the defense establishment was fairly vehemently opposed to this, because of the much higher purchase and life cycle costs of the twin engine Rafale as compared to the single engine Gripen NG.

Still most of the stories seem to bury the lede:

Brazil has selected the Saab Gripen E/F for the 36 aircraft F-X2 requirement to replace its air force’s older combat types.

With an acquisition cost in the region of $4.5 billion, the Gripens will replace the Dassault Mirage 2000C fighters operated by the 1st Air Defence Group and a number of the modernised Northrop F-5EMs in four other Air Force squadrons.

The long-awaited announcement was made on 18 December by Brazilian defence minister Celso Amorim and Brazilian air force Chief Gen Juniti Saito.

The decision was driven by aircraft performance, transfer of technology and low through-life costs, according to the officials.

Contract negotiation is expected to last between 10 and 12 months.

Saab has guaranteed the total transfer of technology of “all systems” including the weapons command software, which will allow future integration of Brazilian-developed missiles and weapons.

(Emphasis Mine)

Both the F/A-18 E/F and the Rafale software suites are far more tightly integrated,  and the software of the F-35 is even more tightly integrated, which makes it more difficult to modify to incorporate new systems.

Saab deliberately chose to put a firewall between flight critical and tactical software, meaning that crashing the latter won’t crash the whole aircraft, which creates an easier upgrade and testing path.

I Don’t Mean to Belabor the Obvious, but Raul Castro is Not Adolph Hilter

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Jon Stewart again, observing that shaking the hands of another world leader with whom we have poor relations at a funeral for a man who invited his own jailer to his inauguration is not Munich.

I am waiting for a politician to realize that the pandering to the delusional demands of the right wing of the Cuban-American is neither good policy nor good politics, and to tell them to go pound sand.

It’s been 55 years since Castro took over Cuba, get over it.

Vacation in Uruguay

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The final legislative hurdle has been cleared, and Uruguay legalized growing and selling marijuana:

The world’s most far-reaching cannabis law has been passed by the Uruguayan parliament, opening the way for the state to regulate the production, distribution, sale and consumption of the planet’s favourite illegal drug.

The law, effective from next year, will: allow registered users to buy up to 40g of marijuana a month from a chemist’s; registered growers to keep up to six plants; and cannabis clubs to have up to 45 members and cultivate as many as 99 plants.

A government-run cannabis institute will set the price – initially likely to be close to the current black market rate of $1 a gramme – and monitor the impact of the programme, which aims to bring the industry under state control and push illegal traffickers out of business.

Julio Bango, one of the politicians who helped draft the bill, said it would probably be four months until the first harvest of legal cannabis, by which time the government would have a licensing system in place. “We know this has generated an international debate and we hope it brings another element to discussions about a model [the war on drugs] that has totally failed and that has generated the opposite results from what it set out to achieve.”

I think that I’m getting old though, because if I went to Uruguay, I’d be excited about visiting the wreck of the Graf Spee.

Stop the World, I Want to Get Off

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Have you heard, in preparation with negotiations with the Russians over Syria, John Kerry is seeking advice from Henry Kissinger.

Yes, that Henry Kissinger.

The man who orchestrated our dropping more bombs on Cambodia than we had on Germany during WWII.

The man who did his level best to bring the murderous psychopath Agusto Pinochet to power.

The man who did his best to cover up the facts of the terrorist attack in Washington DC conducted by the Pinochet government. (Orlando Letalier assassination)

The man who sabotaged peace talks between North Vietnam and the US in 1968 for political advantage.

An avowed enemy of Vietnam Veterans Against the War, for whom John Kerry was the public face at a critical juncture.

And then there are the accusations that Kissinger was complicit in numerous crimes against humanity in much of Latin America.

This ……… is ……… ……… ……… ………

I have no words.

Mexico’s President Drinks the Free Market Mousketeer Koolaid

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It’s not a surprise, the energy companies have been trying to get ownership stakes in the state owned Mexican oil company, Pemex, for years, so it was only matter of time before a useful idiot was elected to the Mexican presidency, the useful idiot in this case being Enrique Peña Nieto:

If Mexico had a crown jewel, it would be the giant state oil monopoly Petroleos Mexicanos, or Pemex. Year after year, it has poured billions of dollars into the state treasury, historically paying for schools, hospitals, dams, highways, ports and more.

The seizure of foreign oil companies 75 years ago that created the company is a cause for annual celebrations affirming Mexico’s fierce sense of independence from outside interference.

Yet even as the country’s new president, Enrique Peña Nieto, credits Pemex with building the nation, his administration acknowledges that the notoriously inefficient conglomerate is in trouble: If it is not opened to private and foreign investment, Mexico, the world’s ninth-largest oil producer, will become a net energy importer by 2020, officials say.

As Peña Nieto moves ahead with a plan to overhaul Pemex, he is navigating the most perilous political minefield of his young presidency. He is toying with taboos and challenging revered perceptions surrounding the nation’s top revenue earner. And he is meeting with impassioned opposition.

At the back of a recent rally for Pemex, Jesus Castillo Sanchez, a 46-year-old handyman, waved a giant Mexican flag as if he’d just taken a hill in battle. Booting the foreign oil companies in 1938 “gave Mexico its true independence from the great powers,” Castillo said. “After [the foreigners] bring their oil platforms, they will bring their armies and their troops.”

The president is expected to introduce landmark energy reform legislation, including proposals addressing Pemex, as early as this week.

………

The government and industry experts contend that Mexico needs advanced technical expertise from outside companies to find and retrieve oil and gas from deep water and shale-rock formations that are believed to hold more than half the country’s estimated 14 billion barrels of reserves.

But “Pemex is not allowed … to choose associations … to reduce the level of risk that you run” in deep-water exploration, Carlos Morales Gil, Pemex director of exploration and production, said in an interview. “What Pemex needs is budget autonomy and flexibility” to form joint ventures, he said.

If you look at the Deepwater Horizon case, you will notice that BP doesn’t know much of anything about oil drilling.

They hire Halliburton and Slumberger (who took one look at the well, and left) for their drilling expertise, and Transocean to operate the rig.

Oil companies no longer have much in the way of technical expertise, they outsourced those during the oil downturn in the late 1980s.

As to the money to go after harder to reach oil, Pemex clearly needs some reforms, it is a wasteful and bloated bureaucracy.

As to the fixes, the first one comes to mind would be an expansion of their refining facilities, so that Pemex would not have to import (and subsidize) fuel for internal consumption.

But one need only look at the disastrous privatization of British rail to understand that this is a solution that has everyone losing but the foreign firms.

If you bring in foreign investors, oil and gas drilling in Mexico is going to end up looking like Nigeria.

Snowden Has Flown to Russia, Is Expected to Ask for Asylum in Ecuador

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I am not surprised.  Hong Kong is not a safe haven in the long term, and if he returns to the United States, he will be tortured through extended solitary confinement in an attempt to break him, as was done with Wen Ho Lee.

So he is in Moscow negotiating asylum with Ecuador:

Fugitive former US intelligence contractor Edward Snowden is due to fly out of Russia in the next few hours in a bid to seek asylum in Ecuador.

Reports suggest he will be on an early afternoon flight out of Moscow, heading first to the Cuban capital Havana.

Washington says it is urging countries in the “Western Hemisphere” not to let Mr Snowden enter their territory.

The US has charged him with espionage over leaked secret documents revealing US internet and phone surveillance.

In a series of rapidly moving developments on Sunday, Mr Snowden flew to Moscow from Hong Kong where he had been holed up since fleeing the US.

Once at Moscow’s Sheremetyevo Airport it is thought he was met by Ecuador’s ambassador to Moscow whose car was seen arriving by reporters.

On Sunday night it was unclear exactly where Mr Snowden was, but he was believed to be still at the airport.

BBC Moscow correspondent Daniel Sandford says it is being reported that he will fly first to Cuba and then to Venezuela before heading to Ecuador. The first plane scheduled to fly to Havana was due to leave Sheremetyevo at 14:05 Moscow time (10:05 GMT).

He will be trying to avoid any country that might arrest him on behalf of the US, our correspondent adds.

At this point, I expect that Obama is looking into ways of having Snowden whacked, and Glenn Greenwald might be on his latest kill list as well.

This is Free Market Mousketeer Bullsh%$

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Bolivia President Evo Morales is looking about setting up a state owned concern to refine his country’s huge lithium deposits:

Is Bolivia poised to become the “Saudi Arabia of lithium,” the vital ingredient in batteries for smartphones and electric cars?

The Uyuni salt flats, stretching across a remote Andean plateau in the southwest of the country, are easily the world’s largest reserve of the soft, light, whitish metal coveted by high-tech firms from Silicon Valley to Tokyo.

This year, President Evo Morales has moved swiftly ahead with plans to finally begin reaping a potential lithium windfall of billions of dollars for the impoverished South American nation.

In January, Bolivia opened its first trial plant. It will produce 40 tons of lithium carbonate a year. Over time, the government wants to ramp production up to 30,000 tons — roughly a fifth of current global demand.

Of course there are some potential difficulties, the salt flats are both moist, and contain a fair amount of magnesium, which makes extraction more difficult.

But here is the assumption that seems to be everywhere these days that just pisses me off:

Meanwhile, Morales’ socialist administration’s go-it-alone attitude — including recent nationalizations of everything from utilities to airports — may mean it will have problems accessing the foreign technology needed to process the lithium.

This is bullsh%$.

If they want the technology, they will get it the same way that multinational megacorporations do today: they buy the f%$#ing technology.

Exxon, BP, and all the rest don’t know how to do difficult drilling, they hire companies like Halliburton or Slumberger for their expertise in deep water drilling, they hire companies like Transocean for its expertise in building deep water rigs.

I’m not talking about industrial espionage here, it’s that companies have increasingly outsourced core competencies in the name of cost savings, and these are now available freely for sale.

You hire a company to do the design, you hire another to do the construction, and if you have any sense, you structure it so as to ensure that the local folks get at least a general understanding of the process when you do this.

Ain’t capitalism grand?

This Must Be the Stupidest Thing Ever Written

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There are any things that can be said about the death of Hugo Chavez, but this takes the cake:

Chavez invested Venezuela’s oil wealth into social programs including state-run food markets, cash benefits for poor families, free health clinics and education programs. But those gains were meager compared with the spectacular construction projects that oil riches spurred in glittering Middle Eastern cities, including the world’s tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi.

To be fair, AP business reporter Pamela Sampson may not be a complete moron, she might simply be a sociopath ……… or it could be both.

You choose.

H/t Atrios.

Hugo Chavez is Dead

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Certainly, he was never a friend of the United States, and this was exacerbated by the US tacit (and likely covert explicit) support of 2002 coup attempt against him.

As to how he was as the chief executive (and pretty much everything else) in Venezuela, I would not give him high marks, unless I were grading on the curve.

If I were grading on the curve though, he would get high marks against the previous ruling elites in Venezuela.

It is truly a shame that, when compared to the political elites who seemed primarily concerned with who got the loot, he was arguably a better leader.

I Think that I’ll Vacation in Uraguay

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It looks like Uruguay will legalize marijuana and sell it through state stores:

The president of Uruguay, José Mujica, has announced plans to legalise the production and sale of marijuana under a state monopoly, triggering a lively controversy in Montevideo. The relevant bill will soon be tabled in parliament, where the governing centre-left coalition led by the Broad Front (FA) enjoys a majority but is divided on this issue.

Possessing and consuming marijuana was decriminalised in 2000. “There is no question of Uruguay producing and distributing drugs, but the state will control and regulate the market,” said interior minister Eduardo Bonomi.

“We have a progressive tradition,” said Bonomi who, with Mujica, belonged to the Tupamaros urban guerrillas in the 1970s. “At the beginning of the 20th century our country ended the prohibition of alcohol, prostitution and gambling.” Abortion is currently in the process ofbeing legalised. “Our approach to marijuana is equally pragmatic,” Bonomi said. “The negative effects of consuming marijuana are far less harmful than the outbreak of violence associated with the black market.”

Do they have ice cream sammiches in Uruguay?

It Would Be Nice if This Stuck, But It Won’t

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Farmers in Brazil have won a 7½ billion dollar lawsuit against Monsanto for shaking them down for never-ending fees:

Monsanto may soon be forced to pay as much as 7.5 billion dollars back to the farmers who say that the mega corporation took their rightfully earned income and taxed their small businesses to financial shambles. It all started with a monumental lawsuit launched by over 5 million farmers against Monsanto looking to recover financial losses from ridiculous seed taxes that bankrupted many families.

Back in April, a Brazilian court ruled that Monsanto absolutely was responsible for paying back the exorbitant amounts of cash back to the farmers, ordering the company to issue back all of the taxes collected since 2004 — a minimum of 2 billion dollars. Afterwards, Monsanto appealed the decision and the case is now suspended until a further hearing is initiated by the Justice Tribune of the local court stationed in Rio Grande do Sul.

Recently, however, the Brazilian Supreme Court declared that any decision reached in a local court case should apply nationally. The result? Monsanto now faces even larger charges, due to the larger legal application on a national level. Now, the charges total or exceed 7.5 billion dollars.

I don’t expect this to survive appeal, because, after all, it’s peasants versus Monsanto, and you can be sure that the Department of Commerce is already burning up the phone lines trying to fix this, shortly to be followed by State, and probably the Pentagon as well.

Silly peasants, don’t you know that the laws doesn’t apply to  rich people and transnational corporation?

Payback’s A Bitch

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Everyone is freaking out because Argentina is renationalizing its formerly state owned oil company, YPF:

Argentina says it will seize a controlling interest in oil company YPF that is owned by Spanish firm Repsol.

President Cristina Fernandez said a bill would be presented to the Senate allowing the government to expropriate 51% of YPF shares.

The move, announced on national television, was welcomed by her cabinet and Argentina’s regional governors.

Spanish Foreign Minister Jose Manuel Garcia Margallo said the action had “broken the climate of friendship”.

Speaking after a government crisis meeting, Mr Margello told journalists his government would take “clear and forceful measures”, although he did not specify what these would be.

In a statement Repsol said it “considers the announced measure to be manifestly unlawful and gravely discriminatory”.

The sale of the former state owned energy company was in the middle of the Argentine financial crisis, when creditor nations held a figurative gun to the Argentine government’s head, so it was sold at fire sale prices.

As to concerns about Argentina no longer being “friendly” to foreign investment, it’s not a big deal.

Argentina has been growing more rapidly than all of its neighbors, including the vaunted Brazil.

Additionally, foreign investment won’t go away, though it might demand an additional 50 basis points return.

Also, reduced foreign investment also less risk of the speculative inrushes that cause crashes which result in the loss of economic sovereignty and a shredding of middle class.

The recent lesson of Argentina, and of Iceland, as well as that of Malaysia during the Asian financial crisis, is that the so called Washington consensus, that currency speculation and completely unimpeded capital flows, that this will produce unparalleled economic growth, is completely wrong.

This is not an expropriation, this is justice. The assets were stolen by the looters in the first place.

And No Carriers, What a Bummer

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It looks like the Latin American customs union, Mercosur, has declared that Falklands Islands flagged ships are banned from their ports, which amounts to a (rather porous) blockade:

Argentines call them las Malvinas. The British call them the Falklands. In news jargon, many assume that to use one name over the other is to take a side, mostly because these islands are the source of an acrimonious dispute that led to a non-declared war between the two countries in 1982.

Enter Mercosur, the trade agreement between Argentina, Brazil, Paraguay, and Uruguay – with Chile as one of the associated member states – which, a week ago, decided to ban ships that fly the Falklands flag from their ports. The measure, a blockade in simple terms, was taken to show solidarity with Argentina on the issue.

Of course, things are different from 1982.

The British no longer have any aircraft carriers, and won’t for many years to come, and the Chinese are explicitly endorsing the Argentine claim.

Truth be told, the only Falkland’s flagged ships out there are probably a few fishing boats, but the fact is that if this escalates, there is very little that the UK can do to to maintain its controls over the islands.

Truth be told, I think that any escalation would come from the British side, as Cameron, remembering Thatcher’s electoral benefit from the earlier war, will try to make a similar play for electorate.