Saturday, March 1, 2003
No quick win over oil prices
www.miami.com
Posted on Sat, Mar. 01, 2003
BY KEN MORITSUGU
kmoritsugu@krwashington.com
WASHINGTON - While uncertainty about a war against Iraq has contributed to a sudden spike in oil prices, those prices could remain high even if a U.S. invasion achieves quick victory.
And even if crude oil prices fall, gasoline prices likely would remain high at least into late spring, analysts say. It generally takes one to two months for oil price shifts to feed through to gasoline. Any postwar declines could be offset by upward pressure on pump prices as demand picks up with the start of summer.
The nationwide average price for unleaded regular is $1.67 a gallon, according to the American Automobile Association, 54 cents higher than a year ago.
Natural-gas prices also have risen, pushing up heating and electricity costs for many homes and businesses. High energy prices slow economic growth and increase the chances of recession.
''Unless it reverses itself quickly, the energy shock is big enough to threaten the economy,'' said Richard Berner, the chief domestic economist at the Morgan Stanley investment bank in New York. He put the chance of recession at one in four in a report to clients Friday. ''While it's anyone's guess how long it will last, the fundamentals don't suggest quick relief,'' he added.
Global Insight, an economic consulting firm in Lexington, Mass., doesn't expect gasoline prices to ease from today's level until July or August at the earliest.
Most analysts attribute part of the rise in oil prices to fears about potential war-related disruptions to oil production. The analysts conclude that a swift and successful war, with minimal damage to oil wells, would eliminate this ''war premium'' from the price.
Certainly, war rumors have created short-term havoc in oil markets, pushing the price of oil on the New York Mercantile Exchange up to $37.70 a barrel on Wednesday -- the highest since the Iraqi invasion of Kuwait in 1990 -- before dropping back to close at $36.60 on Friday. A barrel is 42 gallons.
''I call it March missile madness,'' said Phil Flynn, a futures trader at Alaron Trading in Chicago. He attributed the midweek run-up in oil prices to the market's getting ``a tad ahead of itself on war concerns.''
Yet some economists argue that oil prices would be high today with or without the so-called war premium. They note several other factors, such as low inventories of crude oil, high demand for heating oil because of the cold winter, and the disruption of production in Venezuela due to political unrest.
These factors alone are enough to account for much of the 45 percent rise in oil prices from $25 a barrel since November, said Dave Costello, an economist with the federal Energy Information Administration.
Castro observes new China
Posted by sintonnison at 11:15 PM
in
cuba
www.sun-sentinel.com
By Vanessa Bauzá
HAVANA BUREAU
Posted March 1 2003
HAVANA· In the early 1960s, with Cuba's revolution still in its infancy and the Sino-Soviet rivalry collapsing into an open feud, Fidel Castro made a strategic decision to align with Moscow as his chief benefactor and ideological ally.
Today, hefty Soviet subsidies are but a fond memory here and Castro has turned to one of the last communist countries for trade and much-needed credit. China is Cuba's third-largest trading partner, and Castro, 76, has spent the past four days in Beijing, meeting with his contemporary and outgoing President Jiang Zemin as well as younger Communist Party leaders.
Touring a country transformed by aggressive, capitalist-style economic reforms and an infusion of foreign investment, Castro seemed astonished by China's development since his last visit in 1995.
"I can't really be sure just now what China I am visiting, because the first time I visited, your country appeared one way and now when I visit it appears another way," he said. "You can say that every so often your country undergoes great changes."
Some have speculated Castro could implement similar market reforms to boost his country's economy, hard hit recently by low sugar prices and a regional decline in tourism.
"When he's praising the economic achievements of his socialist allies it begs the question, what does he think of the measures that got them there," said Philip Peters, of the Lexington Institute in Washington, D.C. "And is he considering that maybe Cuba can embark on the same path?"
The short answer is no -- at least not for now.
"To date there's been a political calculation that it would be risky to open up more," said Peters, who has written extensively on Cuba's economy. "They're not going to embark on a slippery slope."
In the early 1990s, Cuba spiraled into a deep recession following the collapse of the Soviet Union, its main trading partner and source of $6 billion in annual subsidies. Castro enacted a series of limited economic reforms, including legalizing the use of dollars, creating foreign investment, forming farmers' markets, and establishing small, private enterprises, from popular sidewalk pizza stands to modest shoe repair shops set up in building doorways. But far from encouraging greater private enterprise, the Cuban government has hiked taxes several times and implemented strict regulations. About 50,000 of Cuba's private businesses have closed since 1996, leaving 150,000 still operating, experts said.
"China has been more pragmatic in terms of foreign investment and private enterprise in ways Castro would not contemplate," said Robert Pastor, vice president of international affairs at American University and former director of The Carter Center's America's Program. "If Fidel Castro were to release the energies of his people I think you would see dramatic growth very quickly."
China is Cuba's third most important trading partner after Venezuela, which provides payment plans for oil, and Spain, which has a chain of hotels on the island. Last year trade between the countries reached $400 million, with China exporting about 600 products, from television sets and rice to plastics, iron and steel.
"Over the last three years trade [with China] has increased dramatically. The Chinese government is giving substantial financing for virtually every product they are exporting," said John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, who recently traveled to China. "They are communist brethren so they'll help each other out regardless of whether it's in their economic interests to do so."
On Friday, the front page of Cuba's Communist Party daily, Granma, headlined the "profound ties of brotherhood" with China. Analysts say Cuba has long looked to China as a counterbalance to the United States. China is the only communist country on the U.N. Security Council and has opposed a war in Iraq.
Academics and State Department officials have said China and Cuba's ties run deeper than ideology or economic cooperation. In 2001, James Kelly, assistant secretary of state for East Asian affairs, confirmed the delivery of Chinese military equipment to Cuba, but provided no details.
Other analysts say relations between two of the remaining one-party states are "more nostalgic and romantic than strategic."
"Fidel has a romantic flair among communists," Pastor said. "They look at him and say he's the last communist."
South Florida Sun-Sentinel wire services were used to supplement this report.
Vanessa Bauzá can be reached at vmbauza1@yahoo.com
If price trends hold true, gasoline can only go up
www.indystar.com
By Brad Foss
The Associated Press
March 1, 2003
If history is any guide, consumers should brace for even higher gasoline prices, which already are above $2 a gallon in some places.
The wholesale price of gasoline has risen from March to May every year since 1985, according to an analysis by Cameron Hanover, an energy risk management firm based in New Canaan, Conn. Pump prices have tended to follow suit, statistics kept by the Energy Department show.
"We're expecting a further round of price increases at the retail level," said Jacob Bournazian, an analyst at the Energy Information Administration, the statistical arm of the Energy Department. "It could be anywhere from 4 to 8 cents."
The national average retail price for regular unleaded last week was $1.66 per gallon, 54 cents above year-ago levels.
In Indianapolis, self-serve regular was selling at an average $1.67 a gallon on Friday, according to AAA Hoosier Motor Club.
The springtime pattern of rising prices coincides with the period when refiners shut down equipment, scrub it clean and switch from winter- to summer-grade fuel. That process, known as "turnaround," causes supplies to shrink temporarily and prices to rise.
Whether the 18-year seasonal trend is extended -- or ended -- in 2003 depends on factors ranging from a possible war in Iraq to the supply from Venezuela, whose oil industry strike has resulted in sharply reduced exports.
If U.S.-led military action against Iraq proceeds quickly and without any disruption in the flow of Middle East oil, analysts believe the price of crude, now close to $37 a barrel, could drop quickly, bringing today's high gasoline prices down, too.
"That could kill the (seasonal) trend," said Ed Silliere, an analyst at Energy Merchant LLC in New York. The ability of refiners in the United States, Europe and elsewhere to make up for the expected shortfall from Venezuela also could tip gasoline prices either way, Silliere said.
Still, analysts say all signs point to the annual trend being magnified by geopolitics and the current supply-demand imbalance. Nationwide inventories of gasoline are nearly 3 percent below year-ago levels with Venezuela's refineries running far below capacity, and analysts said the situation could get worse.
Peter Beutel, president of Cameron Hanover, said the confluence of outside factors makes it difficult to predict what will happen in gasoline markets, but his advice to clients is this: Don't make large bets prices will fall.
In 16 of the last 18 years, June futures trading on the New York Mercantile Exchange rose from March 1 to May 15. In 1993 and 1998, the June contract rose from March 1 to May 1, before falling two weeks later. Gasoline for April delivery was up 2 cents to $1.04 a gallon Friday.
The monthly average for retail prices was higher in May than in March in 15 of the last 18 years. Pump prices declined slightly in 1986, 1997 and 2000.
Secret Service tracks mystery of fake fortune
www.orlandosentinel.com
By Henry Pierson Curtis | Sentinel Staff Writer
Posted March 1, 2003
The money reached Orlando about 2:30 a.m. Jan. 26.
Held in a black duffel bag, the $952,900 weighed just less than 21 pounds.
Armed agents watched as the fortune changed hands outside a 7-Eleven on South Orange Blossom Trail.
Screams of "Policia! Policia! Manos arriba! Ponte en el piso!" ended the transaction.
A startled Colombian national and an accomplice followed the orders in Spanish, raising their hands, then dropping to the ground.
The bogus $100 bills equaled 10 percent of all the counterfeit currency seized last year in the United States. What's more, many were printed on Iraqi bank notes.
Since that night, nearly $20 million of the same counterfeit bills have been seized in Colombia. And the U.S. Secret Service and other intelligence agencies are questioning why a counterfeiting ring protected by Marxist guerrillas had access to bank notes from Iraq.
"It's very important to the Secret Service to see what we can find out," Agent Gerald A. Cavis, head of the Secret Service in Orlando, said Friday of the Iraq connection. "We'll look at it in particular with other intelligence agencies to see if it is state-sponsored."
The possible link between Iraq and counterfeit U.S. currency has prompted the Secret Service to send similar bills to Washington for inspection. Agents say they don't know where the investigation will lead.
"We don't find that a significant amount of counterfeit currency is related to terrorism, but it has an increased significance to us since 9-11," Cavis said.
Counterfeit currency has been a persistent problem in Orlando since Central Florida became an international destination in the 1970s. Most local cases involve $5,000 to $10,000 passed at area tourist attractions and stores along International Drive and U.S. Highway 192, according to federal court records.
Counterfeiters sell bills for as little as 20 cents on the dollar to people who pass them at banks and stores. The profit comes from pocketing the change.
Nationally, counterfeiting cost banks, businesses and residents $43 million in 2002. By law, anyone duped with a counterfeit bill bears the loss.
Large-scale investigations involve international gangs, suspects suited to spy novels and questions of national security.
One such case, unsolved since the early 1990s, focuses on what is known as a "superdollar," a nearly flawless $100 bill that has been seized in the United States, Asia, Europe and the former Soviet Union.
The probe is so secret that the Secret Service routinely declines comment. The agency went as far as persuading the federal Government Accounting Office to delete portions of a 1996 report on counterfeiting that mentioned rumors of a Middle East country printing U.S. dollars to finance terrorism.
Unlike the superdollar case, agents know where the Orlando bills were printed. On Feb. 11, Colombian police raided the printing plant on a farm near Cali.
The $20 million worth of counterfeit bills was the largest seizure in the country's history, according to the Secret Service. Colombia is the world's largest producer of counterfeit U.S. currency, followed by Bulgaria.
The ringleader, Hector Tabarez, told Colombian police that he had regularly paid the Revolutionary Armed Forces of Colombia, Latin America's oldest revolutionary group known by its Spanish acronym as FARC, to protect the printing presses, agents said.
The use of Iraqi bank notes didn't make sense to investigators.
"It seems like an odd place to get their paper when they've got Venezuela right across the border," said Agent Kevin Billings, one of the Orlando supervisors.
Counterfeiters typically use an inexpensive currency and bleach off the old ink before printing the fakes.
Venezuela's currency, the bolivar, is the usual choice of Colombian counterfeiters. It's almost as inexpensive as the Iraqi note -- worth less than a penny each -- and is printed on paper from the same company in Massachusetts that supplies the U.S. Bureau of Engraving and Printing, Billings said.
Currency-grade paper is essential to pass the touch test. Agents say cheap paper makes counterfeit bills feel slick while real ones are rough and durable.
The printing plant in Colombia was discovered as the result of a tip to the U.S. Customs Service that about $1 million was about to be smuggled into Florida.
The tip was passed to the Secret Service office in Bogota, from whichAgent Rafael Barros followed the ring's courier on a Jan. 25 flight to Miami.
"This was on the fly, and decisions were being made quickly between offices, and for federal agencies that's somewhat unique," Billings said.
In South Florida, Secret Service agents arrested Oscar Beltran, a Miami resident, after the courier gave him the money. Beltran agreed to deliver the bills as planned to a Colombian living in Orlando, according to records.
Early the next morning, Alejandro Ballen drove into the 7-Eleven parking lot and was arrested after accepting the bag of counterfeit bills, according to court records.
Ballen, 37, is a university-educated engineer who fled to the United States in the 1990s after FARC guerrillas killed his father for failing to pay protection on the family's farm near Cali. He was in the process of selling the land to the counterfeiting ring for enough money to continue living in the United States, agents said.
Ballen agreed to help the Secret Service and made a series of monitored telephone calls to ring members in Colombia and New York City.
On Feb. 14, Ballen delivered the money to an area of Queens, known as "Little Bogota," where agents arrested two more Colombian nationals. All are charged with conspiring to distribute counterfeit money.
"This was a significant case not only for Orlando but for the Secret Service at large," Cavis said. "Wherever the case went, be it Tampa, Bogota, Miami, New York or back to Orlando, we moved quickly and effectively."
Your money: Is it real or counterfeit?
(DAVID WERSINGER/ORLANDO SENTINEL)
Mar 1, 2003
www.orlandosentinel.com
Editorial researcher Norman Duarte contributed to this report. Henry Pierson Curtis can be reached at 407-420-5257 or hcurtis@orlandosentinel.com.
Chavez's Ace -- Venezuelan Leader Taps Bolivar Myths, Cults
athena.tbwt.com
By Alicia Torres
Pacific News Service
Article Dated 2/28/2003
Editor's Note: Beyond gaining support from the military and portions of the underclass, Venezuelan President Hugo Chavez has channeled the historical, mythical, and to some, mystical figure of 19th century General Simon Bolivar. PNS contributor Alicia Torres examines a popular religion with indigenous roots to find one secret to Chavez's continuing rule. Torres has published several books of poetry in Venezuela and was a columnist for Caracas daily El Universal. She currently lives in the San Francisco Bay Area.
As Venezuela's fate seems locked between President Hugo Chavez's militant, underclass supporters and the middle class, media and business communities arrayed against him, a third force lurks behind the scenes.
Pacing the labyrinth of Venezuela's popular imagination, the unnamed actor is the magical, long-dead General Simon Bolívar, the nation's founding father. The Bolivar myth, skillfully channeled by Chavez, is key to the former paratrooper's grip on power.
After leading a failed and bloody coup attempt in 1992, Chavez famously spent many months in jail and emerged from his "captivity" with a powerful rhetorical and symbolic ace card. Reaching into the confusing current of Venezuela's political history, he found one untainted image, a myth untouched by decades of rampant political corruption and squandering of the country's vast oil wealth, a messy recent history that started long before Chavez.
Hugo Chavez's deft ability to incorporate into his campaign persona the historical legacy of the brilliant general who liberated half of South America from the control of the 19th century Spanish empire helped propel Chavez to the Venezuelan presidency in 1998 with over 80 percent of the vote. Today, Chavez's cult of personality is centered on his image as Bolívar's heir, the modern-day liberator of Venezuela's poorest.
In the United States, no figure commands the same kind of reverence as Bolívar does in Venezuela. The country's currency, plazas and universities carry his name. His maxims are taught in schools, broadcast on radio and emblazoned on government buildings. Bolívar is a liberator idealized in oral culture by small-town storytellers, and in the lyrics of traditional music such as contrapunto.
Chavistas, as the president's supporters are known, call the areas they control the "liberated zones of the Bolivarian Republic" and adorn offices and homes with giant portraits of Bolívar. Chavez trumpets Bolívar's dream of a politically unified South America, calls his political movement the Bolivarian Revolution and he has organized poor neighborhoods into political cells called Bolivarian Circles.
And, as Chavez well knows, besides the historical Bolivar there is a supernatural one, a figure of popular religious devotion who takes his place alongside other cult figures on home altars.
Alongside the Catholic religion, another spiritual tradition thrives in Venezuela, a popular religion with indigenous, African and Catholic roots called the religion of María Lionza. Based on the worship by Indians of a fertility goddess known as María Lionza, the syncretic faith predates any other touchstone of Venezuela's national identity. Many Venezuelans would not inhabit a home lacking an altar to the religion's principal divinities, each of which represents Venezuela's vibrant ethnic mixture of white, Indian, and black.
These religious altars usually feature a portrait of Simón Bolívar, and the religion's priests hold ceremonies in which the spirit of Bolívar is channeled through a medium who coughs when the general is present, since Bolívar had tuberculosis.
The official Bolívar celebrated in textbooks, statues and hymns still elicits the respect and devotion of Venezuelans, even if they inhabit luxury apartments. But in the figure of Chavez, some in Venezuela, including some of the nation's poorest, also see the spirit of Bolívar incarnate. The tradition of María Lionza has fed Chavez's grip on the country's imagination.
Chavez encourages this by echoing Bolívar's words and making his nationally televised speeches with a portrait of Bolívar placed next to his head. Venezuelans joke that Chavez always sets an extra place at his dinner table for Bolívar, and say that he parades the long hallways of his presidential mansion wearing the famed general's cape. Whether the stories are true or not, Chavez is definitely obsessed with Bolívar's legacy and exploits it to maintain power.
The president's posturing as a 21st century manifestation of Bolívar has helped radicalize the conflict in Venezuela. On one side, he is still revered by a significant part of the population as Venezuela's last hope -- a second liberator. The enraged opposition, on the other hand, thinks Chavez has betrayed Bolívar's legacy and 50 years of Venezuelan democracy with his authoritarian style and incendiary class rhetoric. It's one reason the new Bolivarian Revolution is in danger of ending in a civil war.
(c) Copyright PNS
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