Bolivia has its Sarah Palin moment

even the 'tache looks silly

Remember back in 2008 when that crusty McCain character chose Sarah Palin as his running mate for the US Presidential elections? At first it was a bit of a showstopper, then suddenly McCain was polling close to level pegging with The Hawaiian for the first (and as it turned out only) time. But then....well....then reality set in. As the novelty of Palin quickly wore off it was clear that McCain had basically thrown away his chances on someone that carries more baggage than a bellhop at the Ritz. Loved by hardcore Republicans and unelectable by normal people, the choice of Palin for Veep is now writ large in the book of tactical mistakes by politicos.

And thus last night Bolivian opposition candidate for the Presidency, Manfred Reyes Villa (photo above) presented his running mate for the December 6th vote, Leopoldo Fernandez. If that name sounds familiar, he's the prefect (aka governor) of the Pando region arrested as being the brains behind the Sept 11* 2008 Pando Massacre. Currently still on remand in a La Paz prison cell, Fernandez has joined Reyes Villa on a ticket that both hope will unite the opposition against President Morales.

Fat chance. When I first heard of Reyes Villa's pick for Veep this morning it was a difficult choice between cheering and laughing. Cheering because with this it's clear the opposition is done for. This choice of Fernandez means that the attempted opposition alliance that has for the last few days been trying to reach agreement and finding a single candidate to face Morales has failed miserably. It means the opposition will be fielding multiple candidates. It means they're plug stupid and have not a snowball's in hell of getting even close to Evo.

And I was laughing because I was thinking "Is that all you got, nutbars?". The great hope of the anti-Evo brigade now lies with two old hand politicos that have close historical ties with previous military dictatorships and all the muck that goes with them. Reyes Villa couldn't even keep his own job this time last year, as he was voted out of the Cochabamba prefect's job by a score of 35% for and 65% against him. His running mate, locked away in jail awaiting his day in court, has been in charge of the unpopulated and highly corrupt drug-running region of Pando and ruled via quasi dictatorship all this time. Just another tired old far-right racist that couldn't see the world changing around him and tried to suppress said change via hired gunmen and bullets sprayed at indigenous protestors.

In the comments section of this post last week (the one with the recent polling numbers), reader MyC left this comment which had merit to it:

"....the solution to that would be a strong centre-right (it will claim to be center left but will be center-right) opposition candidacy of Doria Medina, along with people who are willing to negotiate with the next Evo government for Bolivia's benefit, not that of the displaced or up and coming elites. and willing to enforce the law against their erstwhile political allies"

I replied at the time like this:

"Fair enough MyC, but a 'strong centre right' doesn't just appear out of thin air. For such a thing to happen the people that are currently on the right will have to stop their separatist flights of fancy, disalign themselves with the extremist racist tendencies and start listening and responding to all the electorate, not just the section of it that thinks it has divine right of rule.

Or in other words, until they get real you'll have a fractured opposition that looks very much like the shambles up against Hugo in Vzla. Or in two words: Evo wins."

And that has simply been confirmed by the Reyes Villa/Fernandez ticket today. Bolivia's opposition is living in the stone age and has no concept of the world around them. If they stopped preaching to their own converted and listened to the wants and needs of the whole country they might be able to put together a credible alternative to Evo. But until then they're just a bunch of reactionary fools with zero chance against a popular man doing a good job for his country....all his country, not just the light-skinned parts of it. The pick of Fernandez to run with Reyes Villa is Palin for Veep parte dos and will finish in the same trainwreck. Pandering to its own hardcore will consign the present political opposition in Bolivia to the dustbin in the same way that the choice of Palin and the step towards the hardcore GOPpers in the USA made the whole party unelectable there.

* Seriously, what is it with that date? Allende in Chile, twin towers, Pando...

UPDATE: Check out T'anta Wawa and her take on the Fernandez Veep story. She knows her Bolivia.

Mysteries of economics forecasting explained (Peru finance ministry edition)

El Comercio is today running this report on how Peru's Ministry of Economy and Finances (MEF) is forecasting the local currency, Peru's Nuevo Sol (PEN), to reach a foreign exchange rate of S/2.90 versus the US Dollar in 2012. The MEF forecast is part of its tome-like "MultiAnnual Macroeconomic Update" published last weekend.

Now this all sounds very, but very important and calculatory and I'm sure you're mystified as to which powerful algorithmic formulae those MEF suits are using to come to their extrapolated conclusions, so let's just explain how things really work chez Spongebob Carranza.

All you really need to make official economic forecasts like these are:

1) A chart ripped from Yahoo Finance
2) A straight-edged ruler

(click to enlarge)

Five minutes later you have your three year forecast for the national currency. Six minutes later you're off for that long lunchbreak you and your MEF colleagues so desperately deserved.

Cusqueña and canchita served. The end

Checking in on the Peruvian consumer

Here are two charts with stats taken from this INEI bulletin. They show how Peru's national sales tax receipts have been coming on recently in Peru. The first chart shows receipts in monetary terms, month over month, since 2007. The growth has been pretty impressive.

However this chart shows more clearly the recent weakness in the growth pattern, with last month the first time that sales tax receipts have shrunk on a YoY basis.

So what happens if a country announces an economic recovery and nobody shows up for the party?

LME copper inventories about to break through 300,000MT

Here's the chart as stands today, with the latest LME number hot off the press:

Add to this the first inventory climb in Shanghai for nine days (up 1.7% to 19,656MT) and the rise over at COMEX, up 228 short tons to 53,209 tons. For sure, these smaller warehouses aren't as important as big daddy LME but the trend is clear in all places, this despite lower than expected recent copper production in the world's two biggest export countries, Chile and Peru.

DYODD, dude.

UPDATE: Nervous copper longs send anonymous messages to Otto, hiding their fear and loathing of his superior economics skills behind mockery.

Copper levels up a bit lately.. STOP PRESS! LOL Otto, come on.. it was at 550,000 tonnes this February and now it is at 300,000.. it's a natural swing. I expect the spot to retrace to around 2.40-2.50 before another run up. Didn't you say it was ready for a pullback around 2-2.20? That was over 30% ago. We know you are bearish on copper but you were plain wrong. Let it go.

Whatever makes you think Ecometals (EC.v) is full'o'bull, Otto?

Ahh, just a feeling, y'know....

On August 12th, Ecometals (EC.v) said this, adding a new layer of smoke'n'mirrors to its bullshit operations in order to dazzle its obedient sheep-like followers over its Zarza crapshoot project in Ecuador:

The final remaining Environmental Management Plan and Environmental License approvals are expected to be received this month.

Result? Pumpy pumpy, up she goes again.

But wait! Today isn't August any longer. Today be September and there's still no news on those permits. Could it possibly be true that EC.v has been bullshitting the market again? After all, on that same August 12th date I wrote this, offering to accept bets on that permit (non) issuance. Damn pity that nobody took me up on the deal....not even EC.v management.

Question of the day: What common word in capital markets, used when stock drops in price on high volumes, rhymes with the word "pump"?

Crown Point Ventures (CWV.v): Two from two, one to go

Crown Point Ventures (CWV.v) is a tiny little O&G play drilling in Argentina that we featured in The IKN Weekly issue 14 (we're now at IKN18, so call it a month ago). At the time we noted it was a risky play for sure, but also noted some decent sounding jungledrums that had been picked up Chez Otto. At that time it was 35c and it's now 37c, so not much change there.

Here below is the press release from last night, which has CWV.v saying "We're drilling three holes down here, the first two look pretty darn good and we're now on the third". DYODD and for the record I don't own (it's tinysmall and not my personal risk profile) but I know a couple of subscribers have recently bought in.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2009) - Crown Point Ventures Ltd. (the "Company") (TSX VENTURE:CWV - News) advises that it has completed the drilling of the second well of a consecutive three well exploration drilling program at El Valle in the San Jorge basin of Argentina and is casing it as a potential dual zone oil well.

This EVx-21 well has been logged, evaluated, and cased as a potential oil well. Among the potentially hydro-carbon bearing zones of interest are two significant zones. The first zone encountered four meter thick sandstone in the Caleta Olivia Member of the Canadon Seco Formation. Analysis of the wells logs and drilling samples indicate that it is prospective of containing light/medium oil. The second zone of interest is a three meter thick sandstone in the Mina el Carmen formation. Logs and drilling samples indicate that this zone is prospective of containing a medium grade of oil.

Crown Point will be commencing the drilling of the third well as soon as the drilling rig has moved off the EVx-21 location. Crown Point has contracted a service rig to complete the EVx - 19 and EVx - 21 wells which is expected to arrive on site later this week.

"This is the second well that Crown Point has drilled on its El Valle block, with both containing highly prospective zones of interest," said Murray McCartney, President and CEO. "We are pleased with our drilling results to date and look forward to completing the wells to confirm the quantity and amount of hydrocarbons present. Both locations show potential for significant development programs."

Chart of the day is....

Petaquilla Minerals (PTQ.to), three months to date.

Featured here today because it's good to see the market recognizing this polluting scam for what it is.