Approval ratings of four local Presidents (for the attention of Foreign Perfidy)

This chart as a complement to Greg Weeks' post this morning, as he decided to debunk some of the guff and nonsense written by Foreign Policy on Ecuador.

Proof that Studmuffin will talk to anyone

"The card you chose was........THE NINE OF DIAMONDS!"
(crowd bursts into wild applause)

News yesterday is that some lady named Hillary is visiting Ecuador in June to chat with Da Muffin about this and that. The last time they saw each other was Uruguay in March, but this one will be the first official visit by a US Sec State since Madeleine Albright in 2000. Here's the translated blurb and quote from EcuadorCentral, which features the name Arturo Valenzuela, head US diplo for LatAm, i.e. the guy who normally has to clear up the mess the other make. This time he got to do something more proactive.

"Arturo Valenzuela called me a few days ago and said that Hillary wants to visit Ecuador, and I said that she's welcome", said Correa. "(The visit will discuss).. regional issues, Unasur issues. There's a wide agenda with the USA pending, including commercial talks."

So now you know.

Studmuffin gettin tuffin with big oil stuffin

Plenty of people have sent me over links to the "Studmuffin threatens the oil companies" story. that hit yesterday. Here's an extract from the BBC's version:

President Correa said during a televised address on Saturday: "Every day that passes there are millions of dollars going to these companies that should be going to the Ecuadorean state.

"I'm out of patience. We are sending a bill to Congress that would allow for the expropriation of oil fields should the companies not want to sign the new contracts.

Meanwhile here's the IKN view on the gig:

Canelazos served, the end.

The best part of breaking up....

.......is when you're making up. Lemme guess here.... Let's take a wild stab at "one is up for re-election and the other is struggling with just 41% approval in the polls". Cool! I win!

Yes indeedy, after the near two year spat about the trifling matter of bombing the crap out of Ecuadorian territory, Colombia's Alvaro 'Hobbes' Uribe* and Da Studmuffin Correa are getting all pally pally at the gig organized by UNASUR to help Haiti. We've had Uribe putting out bigtime before and during the visit and saying he wants to be friends we've also had Correa saying (for example):

"..... he is glad to see his country and Colombia continue to restore full ties, which were severed in March 2008.

Noting the presence of Colombian President Alvaro Uribe at the extraordinary Summit of the Union of South American Nations (Unasur) being held here, Correa noted at a press conference that both countries have taken important steps to restore their relations.

"We have officials in charge of the business (of restoring ties). In this sense, the visit of President Uribe is very positive," he added."

I do like a happy ending. Pity 230,000 had to die before a bit of sense got knocked into the numb skulls of these two overgrown schoolboys.


*nasty, brutish, short

Ecuador's mining law signed and in effect

It's a done deal. In front of thousands of miners and gov't bigwigs, Correa has put his signature on the bit of paper and done the speechy thing about mining and the future of Ecuador.

He arrived half an hour late...kind of fitting under the circumstances, no?

UPDATE: IMAGES!!!!!

Ecuador: Today's signing of the new mining law

Inquiring minds have been asking me about the signing of the new mining law in Ecuador that is supposed to happen today. Allow me to explain.

• It's confirmed that President Studmuffin will sign the law into effect today.

• It is happening at 3pm Ecuador time today.

• Not only that, Correa has chosen to do the signing ceremony in the town of Zaruma, Portovelo. This happens to be the exact same place that Dynasty Metals (DMM.to) operates.

So if you think that the 10% move in DMM these last two days has been kinda neat.....

.... just wait for the upside when the can of corn and cormark get their hype machines into action as from mañana. Above info taken from decent sources.

mojitos served. the end

PS: Dear agoracom EC.v dumbasses, please feel free to do what you always do and steal the post or the info and pretend you're the source of all wisdom on Ecuador without providing a link to source. And oh look! DMM is up 23c since this got posted...there's a thing. Ever thought about offering Spanish lessons to analysts at RBC, boys?

Studmuffin loved or loathed: Pick your own poll and make up your own mind

Two polls just out in Ecuador have Studmuffin's approval rating really widely spread. Here's the graph to make it easy....

.....and that's a big difference. The strange thing about it is that the two polling companies are just about the most repuatable in the country, too. Cedatos is part of the world of Gallup so has to play by the book. On the other hand Santiago Perez Inv Y Est (SP) has been called pro-gov't in previous years (by the dumbasses at El Universo, mainly) but also has the reputation as the closest pollster to reality in major elections and has the top job of producing exit polls on the big days...not a task for the flybynighters.

So is Studmuffin loved or loathed? You be the judge!

Muffin speaks English!

He's smart, he's sexy, he's a polyglot. Gracias al headsup from reader 'PE', check out this link to an English language radio interview with President Rafael Studmuffin Correa of Ecuador that happened end of last week via the BBC.

The first 18 to 20 minutes or so are generalized stuff, which although good may be of less interest to mineheads. People who want to know about how mining in Ecuador is seen as developing by the guy that actually runs the shop should move to 18 minutes onwards....and then listen to the guy blow your lefty-anti-biz prejudices out of the water. Essential listening matter for anyone with the vaguest interest in Ecuador mining world.

For what it's worth, I sent the link to the radio interview to subscibers before the bell this morning as one part of a Flash update. Here's some feedback from subscriber DL:

Thanks for the Correa BBC interview. He's no dummy. I have always liked the guy's smart like a fox ways and what he is trying to do. Guys like him are an important step to establishing lasting change that should take root this time as it's happening at a time when the U.S. is preoccupied to say the least. However If there's one thing SA is good for it's change. Two steps forward one step back. I really think this century will in many ways belong to SA and not just Asia.

Well said, DL. Here's the link again, just in case. Go listen, and hear in English what we've been listening to in Spanish for neverending months...perhaps you guys up there will start believing now?

Regarding Ecuador's windfall tax on mining

Following on from the Denver Gold Forum presentations yesterday (see link in previous post), I've so far had two people, make that three people writing in and asking me about the windfall tax (WFT) proposed by Ecuador, cos apparently there are some scare stories propagated by the uninformed going around. What follows is based on my reply to the mailers adapted into a post.

The situation is that there's a proposed WFT on metals prices that would take 70%. It still hasn't been pacted and it's also in the air whether it ever gets enacted, but the key to the whole story is the theshold level. The gov't and miners still have to agree on where the payments for windfall gains start. Here's a quick 'n' dirty example for Dynasty Metals (DMM.to) and for gold, but the situation is the same for all miners and WFT is proposed on all metals:

Let's suppose the 70% Au WFT threshold is set at $1,000/oz and DMM has cash costs of $300 /oz and let's also suppose total costs per ounce of $500/oz, so under this theoretical here's how much the company would make per ounce:

$800/oz Au = $300 profit
$900/oz Au = $400 profit
$1000/oz Au = $500 profit
$1100/oz Au = $530 profit
$1300/oz Au = $590 profit
$1500/oz Au = $650 profit

Now if the WFT threshold is set at $1200/oz the numbers work like this:

$800/oz Au = $300 profit
$900/oz Au = $400 profit
$1000/oz Au = $500 profit
$1100/oz Au = $600 profit
$1300/oz Au = $730 profit
$1500/oz Au = $790 profit

As you can see, the threshold level doesn't affect numbers below it and leaves plenty in the way of profits, but at some point it does limit the blue sky possibilities of a miner. Also, it's pretty important to know what level it kicks in. The negotiations are ongoing, but what we do know is that the threshold level cannot be set lower than spot prices. Finally, I've heard that some fools are going around screaming that companies like DMM.to have "hidden" this information from investors. This is BS. The WFT proposal has been in the public domain for over a year and a half, first published by Ecuador's gov't, via its tax ministry (not the mining ministry) in December 2007.

So people new to the story can't be bothered to do a bit of basic DD and are now running around saying that the sky is falling....well, as David Byrne would say, "same as it ever was". The best thing is to let the uninformed believe what they want to believe. They're the ones queuing up to give you their money, so just smile sweetly and let them.

Bizarrely unmentioned by English language newswires (part 729)

Even though all the MSM newswires have put out reports from Colombia concerning Uribe, US troops, bases, FARC bombings, relations with Ecuador, relations with Venezuela etc in the last 24 hours (here's an example from the evermore right wing WSJ), not one of them mentions the story that's making Spanish language news down on this side or the Darien Gap. (don't believe me? Well here's a Google News list of 191 Spanish language reports and counting). Once again, the place to get the real news on Colombia in English is reserved for the class news webpage, Colombia Reports. Here's an excerpt from the story:

Uribe, speaking in Medellin, apologized for the breach of Ecuador's sovereignty in March 2008 when the Colombian army attacked a FARC camp in Ecuadorean territory killing 25 guerillas and the FARC's number two, Raul Reyes.

"Concerning the issue of our incursion into the Ecuadorean jungle and the bombing against Reyes, I ask them forgiveness for that," the President said, adding the deal with the U.S. is only to fight against terrorism and drug trafficking.

"Our objective is making an end to terrorism: this is the bandit. Ecuador and Venezuela are our brothers," Uribe said.

Tonight's question: Why don't they want you to hear about this? The soft censorship of your newsflow about South America never ceases to amaze me. Left to the classic media channels you really don't have much of a clue about what's going on down here.

Muffin Flu, anyone?

News from Ecuador is that Studmuffin's Chief of Security has come down with Da Swine Flu and now the whole presidential entourage, Prez included, is under observation for symptoms of the bug.

Thus IKN launches its "Emergency Volunteer Muffin Observer" appeal. Tell me, is anyone out there interested in closely observing President Rafael Correa for a few days? It's a morning, noon and night job, folks.

Bina, are you out there?
c

Ecuador, mining and Correa

Studmuffin displays his personal power by crushing
walnuts with his bare hands in public

This morning I've had several mails asking an opinion on this Reuters report that begins in this way:

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QUITO (Reuters) - Ecuador's President Rafael Correa said Saturday that key sectors of the economy, including oil and mines, must be in government hands CONTINUES

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Well dudes, the comments and issue were examined in detail in The IKN Weekly published yesterday, but I note Dynasty (DMM.to) down 4.4% in early trading on low volumes.

Down and Out in Paris and London and Quito

MEV doing her thing today

Maria Elsa Viteri is a busy lady. Ecuador's FinMin has today presented her 2008 fiscal transparency report which has lots of bits and bobs and technical stuffs (here's her full presentation, and it's pretty good in fact...Spanish language of course) but the one to take away for outsiders looking in is that the country's fiscal revenues are forecast to come up short by some U$1.34Bn to meet the U$14.1Bn 2009 expenditure budget. But not to worry, sez Viteri, cos loans from the Latin American Reserve Fund (FLR), the Interamerican Development Bank (BID), the Andean Development Corporation (CAF) and some tips thrown in from China and Iran will cover the gap.

Then MEV is off on a jolly jaunt to Europe (DJNW link) in the last two weeks of this month as she visits Paris and London to talk face-to-face with the holders of the defaulted bonds. She mentioned as a presser yesterday that Ecuador might be able to pay a tad over the 30c on the dollar that's the basline offer for the debt retirement, but there wasn't much cash around and any extra would be small. This has been taken as a softening of position by Studmuffin, as he's clearly given his right-hand-lady in all things economy a bit of room...not much, just a bit. However she also specifically said the payments would be on the principal only and no interest gets paid.

If you recall, Ecuador bondholders protesters-holder-outers made their first move last week, demanding full payment and interest. Let's see if MEV wins hearts and minds in Europe and heads those pesky vulture funds off at the pass. Watch this space.

News Roundup (we scour the region and bring you the dregs)

Pimp My Vote

Bolivia: Bina has the latest on the Santa Cruz mercenaries story; very interesting stuff, too. Also nice to se El Gaviero posting regularly again, as MG gives us more English language insight to the ongoing ruckus.

Ecuador: Sunday. Election. Studmuffin wins. Nuff said.

Mexico: Swine Flu! This is not funny at all and possibly a big big story in the making with 30 cases confirmed in Mexico City, at least 16 deaths, schools shuttered and now CNN reporting seven cases in Texas, USA. For the record I thoroughly recommend eating elderberries (esp in its yummy jam form) as a flu preventative. And get your flu shots too, people.

Paraguay: According to this report, 75% of Paraguayan children were fathered by Fernando Lugo. I'm still trying to decide whether there's a slight exaggeration going on here :-)

Peru: For the wonks among us. Farid Matuk writes an excellent but slightly technical (not too bad, though...none of those funny symbols) report in English that examines a theme looked at here recently, but in more detail; the interrelation of Peru and Chile economic data. Fascinating stuff for those of us that find this stuff fascinating.....errr....like....dude.

Ecuador, Canada and that revolving door at the finance ministry

I liked Viteri, have to say. She talked straight and was clearly a team player for the Studmuffin administration. But now she is no more, caught by the FinMin revolving door. What's that, five Ministers in the first two years of Studmuffin rule?. Here's GPB at Market Memorandum on the story, taken by permision from his excellent morning service, Earlybird (put it on your radar):

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ECUADOR -- Viteri Quits Finance Ministry; No Changes in Policy Expected (click here for link to Telegrafo story): Maria Elsa Viteri, the finance minister of the Correa government, tendered her resignation after assuming full responsibility for an accusation made by her office that a group of professors earned salaries close to $9,000 a month -- the teachers pointed at by Viteri aren't precisely the staunchest Correa supporters. The reason seems quite innocent, and it wouldn't be surprising that Viteri and her team are chickening out as fiscal revenues shrink, the economy deteriorates and the need grows for a tough policy correction. The stance towards bondholders will stay the same (it seems to be something already decided between Correa, his Rasputin and Interior Minister Ricardo Patiño, and the Economic Affairs Councilor Borja.)

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Meanwhile President Studmuffin has been winking and smiling at Canada again. Remember this post on Feb 5th when he lunched with the Canadian ambassador and made happy smiling noises about Canada? Well he did the same yesterday, inviting a whole bunch of Canadian bizpeople over to the Presidential palace for tea'n'buns. Apparently he's looking for investment in oil&gas, hydroelectricity, mining (natch), tourism, construction etc. Here are the quotes from Ecuador's newspaper of record (i.e. best of a bad bunch) El Comercio:

"We think that there are many opportunities for business and I reiterate to you; Canada is a country that has always been a great friend of Ecuador's."

"We already have Canadian investments in the country. In the mining sector, Canadian investments are the best, they are the ones that most respect the environment and the laws."

"Ecuador has many profitable projects already defined. Another potential is the tourism sector, and we sincerely think that the Canadian market has been unexplored by us."

Ecuador's mining law; the passage and the protest

A quick update; yesterday Studmuffin said he was changing a small (and inconsequential for foreign mining companies) part of the new mining law and would sign it into law this very week. Just part of the i-crossing-and-t-dotting mentioned last week.

Meanwhile, today's protests organized by indigenous umbrella group CONAIE is taking place as scheduled, with roadblocks reported in the main Panamericana North highway to Colombia as well as the Azuay region that was the centre of last week's protests. Importantly and fortunately, CONAIE has said that it wants and is getting peaceful protests from its supporters.

This afternoon the protest is due to take the form of marches and town square meetings around the country. All in all, the whole thing is going as expected; CONAIE gets to play protest politics and appeases its anti-mining members without upsetting Correa or its pro-mining members too much and then the mining law becomes active a few days later. What they call down here "un negocio redondo".

Radio Muffin and Ecuador debt

Bizarrely I sing the praises of Bloomberg again today (wouldn't it be nice to do this every day?), as they sum up the Ecuador debt situation and the radio address of Presiden Studmuffin very nicely with just the title line of Matthew Walter's note:

Ecuador's Correa Says He'll Seek Legal Basis for Debt Default

We all know by now that Correa has a M.O. going on; just look at how he handled Carlos Slim and even brought Repsol to heel with the same tactic. If it ain't broke, don't fix it, right?

So read that headline again, use your brain, think about how Correa works and think about what it means. Then click on it and read the note.

Ecuador news roundup

Rafa seen out with Bina last weekend

Let's all feign surprise: The US Central Intelligence Agency had "full knowledge" of the deadly Colombian raid March 1 on a FARC rebel camp inside Ecuador that led to a rupture in ties between Bogota and Quito.

Crisis what crisis? Ecuador's FinMin sez the country will grow 4% to 5% in 2009. Otto sez "believe that one when I see it".

The much delayed mining law is going to the lawmakers next week. Word is that Ecuador is now treating the matter as "a priority", but that word needs more than just a literal translation when transferring it from latino to anglosaxon mentality.

As for the oil sector, Studmuffin keeps on playing the hardball. The latest target is Repsol (REP) of Spain and he says that because REP and Ecuador can't come to an agreement on its local production it's end-of-contract-adios-amigos time.

But I've saved the best til last: Studmuffin got his dos centavos in about the world financial collapse and I agree with everything he said on this one.

"One of the few good things to come out of this crisis is that we don't have to put up with those yuppies of Lehman Brothers, Standard & Poors and JP Morgan. When I was minister, it was unbearable to have a line of those kids asking for an appointment so that I could do their job. They'd ask you for your analysis and then present it in a report as if were their own."

YAY....you still rock, Rafa.

Sunday photos

The Joker said it well: "Why so serious?" All this arguing and politicking and positioning and posturing between local politicos is all well and good, but there are real people behind it all and they should get a life. I mean, would Alvaro Uribe and Rafael Correa get on a bit better if they realized the other was also a fan of the 70s kids show "The Red Hand Gang"?

Would Chávez relax a little more if he changed his brand of ciggies?

Would Neshtor stamp on the close relations between Argentina and Venezuela if he knew what was really going on?

And would the intellectual left wing support the Bolivarian revolution if they knew what really went on in those meetings with Hugo?

And yes, I know I should stop messing around with the Paint software....gimme a break, huh? Being adult, responsible and mature are highly overrated activities.

Ecuador: The referendum "yes" vote is now a lock

Does Intrade have a market on the Ecuador referendum coming up on the 28th September? If so, you can now put your mortgage on Studmuffin getting his way....yet again.

The largest indigenous organization, the umbrella group CONAIE, yesterday announced its support for the yes vote, though it was quick to point out that the project constitution does not meet all its demands and that their support for the new constitution is nothing to do with their opinion of Correa.

No matter; with CONAIE, the muffin man has 10% of the population voting his way. Most of those were already in his column, but this will be good for a 3% national swing towards "yes". With Polls already showing growing support for the yes vote and the way those same polls consistently underestimate Correa support, this one is now in the bag.

UPDATE: See this latest post for the updated poll numbers