Korean Job Discussion Forums

[mack4289]

http://groups.google.com/group/soc.culture.caribbean/browse_thread/thread/72f34086673d46fa/f8094e2d9649ec2d?lnk=raot

"In marathon speeches peppered with quotes from Marx and accolades to Che Guevara, President Hugo Ch�vez repeatedly vows to do away with capitalism in Venezuela. But it turns out that Ch�vez's economic
policies have been generating a boom for those most capitalist of
institutions - the banks in Venezuela.


Record public spending, fueled by high oil prices, is flooding this
flourishing economy with excess cash. But government currency controls
are trapping that money in the country. So the banks are using it for
loans, as advertised on flashy billboards across Caracas.


And with interest rates lower than the inflation rate, "You would be
stupid not to take out a loan right now," said Richard Francis, a
director of sovereign ratings for Standard & Poor's.


As a result, profits for the banking sector grew 33 percent last year,
led by a jump of more than 100 percent in credit card loans and a 143
percent increase in automobile credit, according to Softline
Consulting, a financial analysis firm based here. The banking and
insurance sector's contribution to gross domestic product - the measure
of all goods and services produced in the country - rose 37 percent in
2006, the central bank said.


The market looked attractive enough two years ago that the Stanford
Financial Group of Houston put political risk on the back burner to
open a dozen branches here. Now remodeling its own office tower in the
Caracas business district El Rosal, the bank saw its revenues grow
fourfold and its credit portfolio nearly triple last year.


Still, the banks may be thriving too much for the government's liking.
Ch�vez warned last month that the state could take over the sector if
it did not offer low-cost financing to domestic industries. Among the
institutions that would be affected by such a move are Citigroup, which
is based in the United States, and the Spanish banks Santander and
BBVA, which control lucrative outlets here.


The private sector is well aware that Ch�vez is not afraid of
nationalizing. He made similar threats before the state bought out
American companies' stakes in the country's largest private electric
and telephone companies earlier this year. The government also took
over operations of multibillion dollar oil projects in May.


Bankers do not dismiss an eventual bank takeover, but they do not
expect such a move in the short or medium term. "The government needs
private investment in banking," said Dir�n Sarkissi�n, president of
Stanford's commercial bank in Venezuela."Ask them if they have the
personnel to manage 50 financial institutions."


So has Chavez scored a victory here? Well, there's a problem: you take out loans to invest. What do you invest in in Venezuela? Venezuelan companies are scary because of the nationalization threat. Overseas investment is difficult because of the currency controls mentioned in the article. Ah, I know what you invest in:

"Betzaida Guerra, for example, said she discovered in a
newspaper advertisement last year that a bank could finance the
operation she had long wanted but could not afford. Within weeks, she
secured credit for the nearly $5,000 surgery to enlarge her breasts
with silicone."

Despite all the sexist implications, let's face it: stocks, bonds, commodities, they all go up and down. But boobs are always a sound investment (I'm leaving the "up and down" joke alone).

[cbclark4]

Yes the banks are taking the short term out look.

Turn fast profits before the takeover.

[thepeel]

This is a sign of the looming meltdown.

Chavez has been printing oodles of money, gaining forex reserves and imposed currency controls. Of course the banks are doing well. When the inflation starts to really pick up, it will be a different story.

It is the same in the USA, China, Hong Kong, Singapore, London. Global liquidity is at an absurd high and the bankers are making a killing.