Continue reading Hugo Chavez Racing Toward Economic Peril

Hugo Chavez Racing Toward Economic Peril originally appeared on BloggingStocks on Tue, 16 Mar 2010 12:00:00 EST. Please see our terms for use of feeds.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I own shares of CX but not XOM .

Hugo Chavez wants those bad capitalists to bail him out of a jam originally appeared on BloggingStocks on Thu, 15 Jan 2009 14:40:00 EST. Please see our terms for use of feeds.

In the margins of Barron's this week there was a smallish note about the government of Venezuela nationalizing Cemex's (NYSE: CX) operations in that country. For some reason the government of Hugo Chavez thinks that stealing all of the private companies in 'his' country will lead to greater prosperity for 'his' people.

While it is a long journey from Venezuela to Zimbabwe, with its exponential inflation rate and a near-total economic breakdown, every journey begins with a first step. Mr. Chavez will move much closer to this inevitable outcome if he continues on his chosen path.

Motley Fool has a good write-up on the subject in which they detail the sour relations between Chavez and foreign businesses. Chavez recently offered to re-open negotiations with Cemex, but since he has already decided to take the company, that offer is suspect -- you can't negotiate with a gun pointing at you. To date, Chavez has nationalized the telecommunications industry, electricity, and oil. How many steps down the road is that? Why would anyone want to invest in Venezuela?

Continue reading Could Venezuela become Zimbabwe? Ask Cemex

Could Venezuela become Zimbabwe? Ask Cemex originally appeared on BloggingStocks on Tue, 26 Aug 2008 14:15:00 EST. Please see our terms for use of feeds.

Over the weekend there was a referendum in Venezuela that would have scrapped constitutional the term limits for president Hugo Chavez. He has been president of Venezuela since 1998 and constitutional term limits will not allow him to run again in for reelection in 2012. The left- leaning Chavez has been following in the steps of Fidel Castro and turning Venezuela into a communist state. He has enacted emergency powers, nationalized oil infrastructure, expelled foreign missionaries and allowed crime to run rampant. In order for him to constitutionally stay in office though he needed to get rid of the presidential term limits. That referendum this weekend failed, which is good news for democracy.

Venezuela is the forth largest oil exporter to America after Canada, Saudi Arabia, and Mexico. About one half of its 2.3 million exported barrels a day come to the US representing about 9% of all US oil imports. Like Iranian President Mahmoud Ahmadinejad, Chavez likes to talk and can move oil prices higher with off handed remarks and his railing against US foreign policies.

The Venezuelan people led by Chavez have headed down the road to socialism and almost a Cuban style dictatorship. While by no means the end of the story, this referendum is a win for democracy and should help the long term stability in the region which is important for US oil prices. Exxon Mobil (NYSE: XOM) and ConocoPhillips (NYSE: COP) have both been had investments in the country in past years.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Chavez referendum fails -- good news for oil originally appeared on BloggingStocks on Mon, 03 Dec 2007 13:01:00 EST. Please see our terms for use of feeds.

Stop for a moment and give Exxon (NYSE: XOM), British Petroleum (NYSE: BP) and Chevron Corp. (NYSE: CVX) some considered thought. If you're into investing in oil, I want you to think about just exactly whose company you're showing favor to. More than ever it's time to pull the plug on Hugo Chavez by shifting your investment dollars away from Venezuelan interests and by putting Hugo Chavez's Citgo gas stations on notice. Most of America has no clue about what Hugo Chavez really is. Let me frame this for you.

You wouldn't buy groceries from a communist dictator, would you? Would you buy school textbooks from the likes of Joseph Stalin? Would you buy shop tools from the likes of Adolph Hitler? Would you go to a fresh fish market run by Fidel Castro? If you're a concerned American who's even marginally thoughtful about world history and current events, your answers to the preceding questions should be a resounding no.

If you answered no to the above questions, then why in the world would you buy gasoline from Hugo Chavez? Are you aware that Venezuela is negotiating to buy Russian submarines? I'll guarantee you that it doesn't want those subs for hunting tuna. Do you know Hugo Chavez is fully prepared to sink U.S. navel vessels if we need to attempt a blockade of Venezuelan oil transports? Hugo Chavez is actively building an offensive military and I shouldn't need to remind you that Venezuela is just a stone's throw away from your homeland. The EagleSpeak blog reports that, "Venezuela ordered weaponry from Russia worth $3.4 billion, including 24 Su-30MK2V Flanker fighters, Tor-M1 air defense missile systems, Mi-17B multi-role helicopters, Mi-35 Hind E attack helicopters and Mi-26 Halo heavy transport helicopters. ...Venezuela has become the world's second-largest importer of Russian weaponry after Algeria, which signed arms deals with Russia worth $7.5 billion."

You need to take heed of the fact that even the Venezuelan people are protesting their distrust for Hugo Chavez after he shut down Radio Caracas television for speaking in opposition against him. The Sea to Shining Sea blog comments that, "... In the wake of the RCTV protests, Chavez launched an offensive against the remaining opposition station, Globovision, and CNN, accusing them of destabilizing his government. ...The day will come when Venezuelans will not be able to stage opposition protests at all -- just like in the land of Chavez's mentor, Fidel Castro." Hugo Chavez doesn't like opposition, he hates America and he despises Israel.

The one saving grace that we may have in this situation is that Hugo Chavez is on a very "hand to mouth" budget. His cash reserves are relatively fast moving. He turns around his money very quickly and any interruption in his cash flow has immediate and significant consequences. It's time to put a serious knot in Hugo Chavez's plans for America and it should be very easy to do. Give serious consideration to where you will place your oil investment dollars and doublecheck the name on the gas station sign before you fill your fuel tank from now on. If the sign says Citgo, you may want to look down the road.

That is of course unless you want to make life easy for a communist dictator.

CVX, XOM, BP: It's time to send Hugo Chavez a message originally appeared on BloggingStocks on Sat, 16 Jun 2007 13:20:00 EST. Please see our terms for use of feeds.

Hugo Chavez may be in a tough spot originally appeared on BloggingStocks on Wed, 10 Jan 2007 14:23:00 EST. Please see our terms for use of feeds.