www.upi.com By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 3/6/2003 8:08 AM

RIO DE JANEIRO, Brazil, March 6 (UPI) -- Markets were mixed across Latin America this week as bargain hunters moved in to buy up cheap shares but external worries of war in the Mideast weighed on investors.

In Mexico, the Latin American country most integrated with the U.S. economy, the peso hit a record low on Wednesday.

Analysts say that fear over potential military action in Iraq is punishing Mexico's market the most in the region.

Mexico's peso lost nearly 1 percent Wednesday to end at 11.23 to the dollar. The currency has shed more than 7 percent this year, and one-fifth of its value since last April.

Markets across the region were spooked Wednesday by diplomatic fireworks as France, Russia and Germany vowed to block a United Nations resolution authorizing use of force in Iraq, and the United States responded that it was determined to disarm Saddam Hussein.

The main concerns, as they are around the globe, are how far a war in Iraq would pump up oil prices, and whether the risk aversion of investors in a time of war will drain foreign cash out of Latin America's emerging markets.

A domestic storm hit Argentina on Wednesday as the supreme court there ruled against the government in its conversion of dollar-denominated banking accounts into pesos.

The San Luis province brought a lawsuit against state-run Banco de la Nacion after the province's accounts -- like every other account in Argentina -- were converted from dollars to pesos.

Depositors have been seeking reversal of the decree, as accounts were converted at 1.4 pesos per dollar. The market price of the peso is hovering around 3.2 to the dollar.

Analysts expect the banking sector to suffer mightily if Wednesday's ruling sparks more such lawsuits. Most analysts estimate lawsuits seeking a combined total of $10 billion or more from banks.

It's not clear how the bank ruling may affect Argentina's hard-fought debt-rollover agreement with the International Monetary Fund.

Fund officials are known to be in opposition to a ruling that would force banks to reconvert accounts.

The IMF didn't return inquiries from United Press International on Wednesday, and a fund spokesman refused comment on the matter at a news conference in Washington on Tuesday.

However, an IMF delegation visiting Argentina this week released a statement saying that Argentina's economic plans were "on track" and that it is likely to push ahead completion of the first review of the country's $6.78 billion debt-rollover agreement.

"The financial program supported by the fund is on track, and all end-January quantitative performance criteria were observed with comfortable margins," the IMF statement said.

In Brazil, where markets were shuttered for most of the trading week because of the raucous Carnival holiday, some modestly good news came in the form of a debt upgrade on Wednesday.

J.P. Morgan Chase & Co. said it was upping Brazilian debt to neutral from underweight. The investment bank said it was impressed with the commitment of President Luiz Inacio Lula da Silva to economic austerity.

As for the markets, Brazil's Bovespa stock index rose 1.3 percent last Thursday to 10,126, as investors took cues from Wall Street. Long-distance carrier Embratel rose 4.4 percent. Private bank Unibanco climbed 4.7 percent.

Investors sent the Bovespa up 1.3 percent to 10,280 ahead of the Carnival holiday. Optimism ruled the day, as Morgan Stanley upgraded the country's debt and the government announced a large primary budget surplus for January. Phone giant Telemar rose 2.1 percent.

Brazil's markets were closed Monday and Tuesday for Carnival.

The Bovespa, in a half-day of trading Wednesday, rose 0.24 percent to 10,305.5. The Bradesco bank gained nearly 2 percent, power company Eletrobras added 3.6 percent, while oil giant Petrobras fell 2.5 percent.

In Mexico, the IPC index ended last Thursday up 0.5 percent at 5,900 in light trade. Fixed-line phone company Telmex rose nearly 1 percent, while cement maker Cemex jumped more than 3 percent. On Friday, the index rose to 5,927, as mobile phone operator America Movil lifted the market by gaining 3.5 percent.

The IPC closed flat Monday at 5,926.7. Broadcaster Televisa gained 1.1 percent, while retailer Wal-Mart de Mexico lost 1.7 percent.

Heavy losses in New York on Tuesday drove the IPC down 0.3 percent to 5,911. America Movil lost 0.8 percent, while brewer Modelo lost nearly 1 percent.

Wednesday brought a slight gain to 5,914 for the IPC as investors were sidelined by Iraq woes. Modelo gained 1.26 percent, while the country's No. 2 mobile phone company Iusacell added 2.7 percent.

Argentina's Merval index dropped 1.2 percent to 578.9 on Thursday. Banking shares were hit, as a row grew between the sector and the government over reimbursement for last year's banking freeze. Grupo Financiero Galicia, which controls the nation's largest bank, shed 3.7 percent.

On Friday the index rose 2.57 percent to 593.8. Chemical company Indupa gained 12.5 percent after posting a healthy profit for 2002, sending the market up.

The Merval was flat Monday, ending at 593.9 in thin and rocky trade. Banco Frances lost 2.7 percent. Tuesday saw a gain of 0.44 percent to 596.6. Banco Galicia gained 2.8 percent as investors gained some confidence in the sector.

On Wednesday, the index fell 0.23 percent to 595.1. Galicia fell 3.35 percent, hit hard with the supreme court ruling on banking account conversions. Food group Molinos lost 2.85 percent.

Chile's IPSA index rose 0.9 percent to 1,007 Thursday. Brewer CCU gained 2 percent. On Friday, the index gained 0.8 percent to 1,015. Power generator Endesa gained 2 percent.

Monday brought a slight loss to 1,014 for the IPSA. CCU gained 1.4 percent, while telecom CTC Chile shed nearly 1 percent. On Tuesday, the index ended flat at 1,013. Electricity company Enersis -- which controls Endesa -- shed 2.5 percent.

Wednesday brought a flat close of 1,013 in uneventful trade.

The IBC index in Venezuela ticked up 0.1 percent to 8,157 Thursday. Friday brought a gain of 4.3 percent to 8,509 in light trading.

The market was closed Monday and Tuesday for the holiday, then lost 4.16 percent to 8,156 on Wednesday as Nacional Telefonos de Venezuela -- which represents 40 percent of the index -- lost 2.7 percent.

www.vheadline.com Posted: Thursday, March 06, 2003 By: Steven Hunt

US-based commentarist Steven Hunt writes: The Financial Times is supposed to be some of the best reporting from the UK.  However, Andrew Webb-Vidal's piece entitled "Terror Groups Relocating to US's Backyard", dated March 4, 2003,  is mere crass ideology disguised as astute analysis.

Vidal-Webb quotes General James Hill, head honcho at the US Southern Command, as sounding the alarm that Middle Eastern terrorist groups are jeopardizing US security by establishing a foot hold in Latin America.  Hill, points to Venezuela's Margarita Island as one of the new "terrorist" hotspots.

So in the first few paragraphs of the story we, the average readers, have the central point, spoken from the mount of the most powerful military commander in the Americas:  terrorists have set up shop on Margarita Island.

Vidal-Webb makes explicit that certain "security experts" (that tellingly go unnamed) say that "as yet" no regional governments can definitively be said to be aiding these Middle Eastern terrorists.  But the FT reporter states that US officials (again, un-named) are "worried that weak state institutions are making the region a haven for operatives" with links to al-Qaeda, Osama's group.

The "weak state institutions", or the specific states, are not singled out by Vidal-Webb.  But, of course, since Venezuela is singled out in this story, any competent reader would assume that Venezuela has "weak state institutions."

If there would be any doubt in the reader's mind as to which states pose the US a problem, than those are laid to rest when the reporter quotes Fernando Falcon, a former Venezuelan state security police chief.  Falcon ominously states that "If I were al-Qaeda, I would be setting up in Venezuela right now."

Again, dear VHeadline readers, pay attention to what gets included and what is omitted:  Webb-Vidal never interviews anyone involved in Venezuelan state security, not one person.  However, the reporters chooses to give voice to a "former" police chief.

A competent reporter, knowing a little about the recent political tumult in Venezuela, might think to ask whether or not former chief Falcon or his political allies have anything to gain by smearing the current government as inept or villainous adjuncts to terror; or as weak in the area of intelligence and enforcement.

(If I were al-Qaeda, I would head straight to Honduras.  The US military has a huge presence in the country and almost everyone is on the make for bribes from foreigners.  Moreover, with the US presence in that country, it would be one of the last places that the US "experts" would think that terrorists would hide.  More, the country is desperately poor--money can buy almost anything, even anonymity.  Moreover, Honduras is a lot closer to the US than is Venezuela.  It would be faster to ship chemical or nuclear weapons from Central America.  If Honduras is good enough for US supported terrorists, for example, the Contras, than it should be adjudged good enough for Third World terrorists from the Middle East.)

Just so we can understand the ideological framework in which Webb-Vidal's vaunted US General Hill is operating within, it is important to understand what this military stooge considers "terrorist".  Hill states that Colombia saw "more terrorist attacks than all the other nations in the world combined."

What General Hill does not point out is that most attacks in Colombia that saw the death of non-combatants, innocent civilians, were carried out by pro-government and pro-US partisans--the rightwing paramilitaries that are documented as having ties to the military, and are responsible for roughly two-thirds of all civilian deaths.

This is one of those "omitted" facts that the US corporate press usually does not see fit to include in stories about the Colombian civil war.

After General Hills statements to the effect that the Colombian conflict could be won, while the US ends up "losing the battle in the rest of the region."

Curiously, Webb-Vidal takes this very ominous warning from the General as  indicating that "the Colombian conflict is becoming enmeshed with increasingly violent political tensions in Venezuela."

Just how this political conflict in Venezuela is connected with the Colombian civil war, the reporter does not say.  But in the next paragraph he highlights two historical "facts": (a) that two powerful bombs went off in the Colombian and Spanish diplomatic missions; and (b) that the attacks followed shortly after President Chavez criticized Colombia, Spain, and the US for involving themselves in Venezuelan affairs.

Thus, like spokespersons for the US government tried to imply, the reporter suggests a casual connection between Chavez's admonishments and the bombings.

Though the FT reporter does present the opinion of the Chavez government about the blast, he quotes--again, unnamed--"intelligence sources in Miami that the terrorists behind the bombings were either left-wing Colombian guerrillas, or a group from the Chavez government!

So there you have it, "intelligence sources in Miami" have the final say in the FT story as to who the likely culprits behind the bombings were.  Since the Colombian, US, and Venezuelan rightwing has long smeared the Chavez government with helping and coddling the FARC.  The average reader is lead to assume that the Venezuelan government is a weak security link that allows the proliferation of Middle East terrorists, and also, that the Chavez government itself was responsible for bombing the diplomatic seats of Colombia and Spain.

Most disturbing and inexcusable, however, is that Webb-Vidal does not think that it is necessary to name the Miami "intelligence" contacts he uses for his report.  They could very well be very rightwing groups that have a history of terrorist attacks on Cuba, we will never know.

Webb-Vidal uses the precious last paragraphs--the ones that tend to leave the greatest impression on the reader--for highlighting the developing US presence in Colombia.  However, what is ostensibly the reason for the US Colombian presence, the war on "drugs", goes unmentioned by Webb-Vidal.  We are given information that Colombian military men have been investigating the movement of FARC rebels into Venezuela.

In the last paragraph we are given a quote from a Mr. Robert Steele, described as "a former deputy director of US Marine intelligence and the private sector advisor":

     "We have cold war mindsets that are not adequate for        today.  The US thinks of Latin America as a benign        backyard.  They are wrong.  It is a nightmare ready to        go north, and the Americans don't understand that."

With Steele's interesting interpretation of Latin America as "a nightmare ready to go north" what are we, the average readers, supposed to come away with from the story.

(1) That Venezuela is a gathering point for terrorists. (2) Venezuela's government is an ideal place for terrorists. (3) That the Chavez government, or its allies, are likely involved with terrorists attacks against the diplomatic seats of Spain and Colombia. (4)  As the noble battle against terrorism is won in Colombia, it is likely to spread throughout the adjacent countries, especially Venezuela. (5) That the US government and its citizens in the north should pay special attention to Latin America because the area has weak, or pro-terrorist states that are planning to cause havoc to innocent civilians in the US.

Again, dear reader, the US public and people in "allied", wealthy nations are being set up--if the lying, fascistic, and morally-defunct elites of the world get their way,  the Chavez regime will become another target in the "war on terrorism".  From Webb-Vidal's unscrupulous reporting we can already see the broad trajectory of what US intelligence and their Venezuelan buddies, the extremists in the opposition, have planned.

Smear the government as "weak" and incapable of controlling terrorists (Middle Eastern or otherwise;  label Chavez as an undemocratic thug, an enemy of human freedom and freedom of the press; talk up or manufacture tensions (between Colombia and Venezuela, Chavez and the opposition); conflate regional terrorism--that is predicated on antagonisms rooted in economics, racism, and social classes--with the US-led global "war on terrorism."

Look for further economic and social destabilization--these are the requisites if the opposition is to ever be successful in any "fair" elections.

Remember, the US would rather not have to deal with an outright invasion, that scenario would yield too many dead US servicemen, such an endeavor would loose favor with a public still shell-shocked from Vietnam.

Thus, the US intelligence "black-braggers" and their ideological cohorts in Venezuela are hoping to cause enough chaos so as to promote a military coup.

None of the above described scenarios are already "written onto the pages of history".  By studying and understanding propaganda, US imperialism and covert actions, we can reasonable understand and counter the ongoing destabilization.

However, more people need to avail themselves of alternative, non-corporate sources of information.  Moreover, commonality, mutual-aid, and authentic solidarity are essential.

They are but a puny, fearful, selfish, and immoral group of fascist agitators and coup-mongers.  But not all the opposition are, however.  Many are merely fearful that historically subordinate groups of people are finally asserting themselves proactively.  In their fear they want to believe those in the opposition that are duplicitous and essentially against democracy.

Where the right-wing has historically deployed death-squads we need to release an even more deadly weapon: love-squads.  Love-squads are people, operating individually or in groups, that are capable of describing the goals of the Bolivarian revolutions to those that have been grossly lied to.

We can share with them our ideals, describe our projects, and more importantly, work to help them in any way that we reasonably can.

Love and cooperation will always triumph over fear and oppression.

This we must believe, but more importantly, really live.

Steven Hunt ecocentricsolutions@earthlink.com

www.msnbc.com

LONDON, Mar. 6 — World oil prices rose towards historical highs on Thursday as the United States suggested that Iraq may have only days to decide to disarm or face war.

• Oil after Saddam: All bets are in • A Russian-American pipe dream • Iraqi oil, American bonanza • The Saudis: Between Iraq and ... • U.S. politics: Is the fix in?        

FUTURES TRADERS fear an attack on the world’s eighth largest oil exporter could trigger a supply shock at a time when global inventories are at historical lows.        U.S. crude, which hit a 12-year high around $40 last week, was 31 cents higher at $37.00. International benchmark Brent crude oil rose 51 cents to $33.51 per barrel, barely 40 cents below a two-year high hit last week.        “There are certainly a lot of people who think the likelihood of a military operation before the end of March is high,” said Adam Sieminski of Deutsche Bank investment bank.        U.S. Secretary of State Colin Powell sought to blunt opposition to war by arguing that Iraqi President Saddam Hussein had not made a decision to disarm.        “Nothing we have seen... indicates that Saddam Hussein has taken the strategic and political decision to disarm,” he said in a speech on Wednesday.        “We will see in the next few days whether or not he understands the situation he is in and he makes that choice.”        Chief United Nations weapons inspector Hans Blix is due to deliver his next report on Friday, and the United States wants the Security Council to vote on a war mandate next week.

Gas prices climb on fears of war with Iraq March 6, 2003 — Consumers are growing worried as gas prices continue to climb. NBC’s Jim Cummins reports, and Tom Kloza of the Oil Price Information Service tells ’’Today’s’’ Katie Couric what market forces are at work.         POWELL VS. BLIX        Powell’s harsh assessment of Iraqi cooperation contrasted with comments by Blix, who said Iraq had stepped up disarmament recently.        Blix said he would release “benchmarks” for disarmament on Friday, but Powell resisted the idea saying: “We’ve given him enough measures... I think we can pretty much judge now that he is not complying.”        Washington and London have about 300,000 troops in the Gulf ready to attack Iraq for allegedly hiding programmes to develop nuclear, biological and chemical weapons.        The threat to Gulf oil supplies comes at a time when global oil stocks have slumped below normal levels because of a prolonged strike in exporter Venezuela, and an unusually cold winter in the northern hemisphere.

   Latest U.S. government data show stocks of distillates, including heating oil, falling to the lowest level since 1963 on strong winter demand.

       Crude stocks in the world’s largest consumer are already at their lowest in 27 years.        Fears of war and a supply crunch have sent world oil prices up by a third in the last three months, driving up energy costs at a time of fragile growth in many rich economies.        The Organization for Economic Cooperation and Development, which represents most major industrialised nations, said on Thursday the world economy would be hit if the Iraq crisis led to a sustained period of high oil prices.        The Organization of the Petroleum Exporting Countries, which controls two-thirds of world exports, has pledged to fill any shortfall should war disrupt supplies from Iraq, which now sells around two million barrels daily.        But industry analysts say OPEC may not have enough to cover if war on Iraq also affects supplies from other Gulf countries, and importing countries may have to fall back on their huge emergency stockpiles to fill the gap.

  More Oil & Energy news •  Oil spill industry on Iraq standby •  Dousing the flames of an Iraqi war •  Gas prices set to hit record highs •  Saudi, IEA agree to tap OPEC first •  OPEC likely to suspend quotas

reuters.com Thu March 6, 2003 07:47 AM ET By Peg Mackey

DUBAI (Reuters) - As war clouds darken over Iraq, oil markets are obsessing over whether or not OPEC is able to cover a supply crunch and prevent the need for consumer countries to tap emergency strategic reserves.

Optimists say the producer group will be able to shoulder the supply burden alone because the world's thirst for oil will ease during spring.

"OPEC will have more than enough capacity to cover a loss in Iraqi exports plus a small outage in Kuwaiti supplies," said Gary Ross of New York consultancy PIRA Energy.

"That's because the excess capacity of Saudi Arabia and the UAE will combine with a seasonal decline in oil demand of 2-2.5 million barrels per day in the second quarter."

Pessimists, however, say oil markets will remain unconvinced in the stressful early days of battle.

And world consumers have cause for concern if they look only at the spare capacity figures of the Organization of the Petroleum Exporting Countries.

Two output increases this year to cover shortages from strike-hit Venezuela have left the cartel with a cushion of just two million bpd, a Reuters survey estimates. That is just enough to cover a break in Iraqi oil exports.

"OPEC is very close to its immediate full capacity," said Leo Drollas of London's Center for Global Energy Studies (CGES).

"And if Kuwait shuts its northern fields they may not have more than one million bpd to put on the market to cover for Iraq -- and that is not enough."

Iraq's Gulf neighbor Kuwait has said it could shut up to a third of its 2.1 million bpd of output as a safety precaution when the bombs start dropping.

STRATEGIC RESERVES

That stoppage would make it more difficult for OPEC to handle a shortage and make more likely the release of emergency reserves held by industrialized importers.

If OPEC has insufficient spare, those countries, represented by the Paris-based International Energy Agency (IEA), have said they will release crude from strategic inventories for the first time since the 1991 Gulf War.

"The IEA should release oil to prevent prices spiking," said Drollas. "They should have done it when Venezuelan exports were interrupted. And if they don't do it with Iraq, they should disband the IEA."

OPEC is doing its utmost to avoid a repeat of the Gulf War when the IEA released crude to coincide with the allied attack on Iraq, triggering a huge drop in oil prices.

Cartel officials have vowed the group will pump flat out if a war halts Iraqi exports. The head of the IEA, Claude Mandil, has met with Saudi Oil Minister Ali al-Naimi and OPEC Secretary-General Alvaro Silva.

Saudi Arabia will press OPEC, at a meeting next week, to set up a contingency for war that would suspend output quotas once hostilities start.

The only OPEC producer with any significant spare capacity it will be down to Riyadh to determine how many extra barrels are released into world markets.

Saudi Oil Minister Ali al-Naimi has said the kingdom is able to boost flows to 10 million bpd and can sustain maximum capacity of 10.5 million bpd within months.

"It has never been a problem to get to 10 million bpd. We've been there before," said a senior Saudi oil executive. "And pumping beyond that is within the range of our production capacity."

The Saudi executive said much of the kingdom's spare volume is located offshore in the northern Gulf fields of Zuluf, which pumps Arab Medium, and Safaniyah, which produces Arab Heavy.

Several other fields could also be tapped for extra oil.

The kingdom, the world's biggest oil exporter, now is pumping at just over nine million bpd, insiders say.

reuters.com Thu March 6, 2003 07:12 AM ET By Tom Ashby

LONDON (Reuters) - World oil prices rose toward historical highs on Thursday as the United States suggested that Iraq may have only days to decide to disarm or face war.

Futures traders fear an attack on the world's eighth largest oil exporter could trigger a supply shock at a time when global inventories are at historical lows.

International benchmark Brent crude oil rose 55 cents to $33.55 per barrel, just 40 cents below a two-year high hit last week. U.S. crude, which hit a 12-year high around $40 last week, was 31 cents higher at $37.00.

"There are certainly a lot of people who think the likelihood of a military operation before the end of March is high," said Adam Sieminski of Deutsche Bank investment bank.

Secretary of State Colin Powell sought to blunt opposition to war by arguing that Iraqi President Saddam Hussein had not made a decision to disarm.

"Nothing we have seen... indicates that Saddam Hussein has taken the strategic and political decision to disarm," he said in a speech on Wednesday.

"We will see in the next few days whether or not he understands the situation he is in and he makes that choice."

Chief United Nations weapons inspector Hans Blix is due to deliver his next report on Friday, and the United States wants the Security Council to vote on a war mandate next week.

POWELL CONTRASTS WITH BLIX

Powell's harsh assessment of Iraqi cooperation contrasted with comments by Blix, who said Iraq had stepped up disarmament recently.

Blix said he would release "benchmarks" for disarmament on Friday, but Powell resisted the idea saying: "We've given him enough measures... I think we can pretty much judge now that he is not complying."

Washington and London have about 300,000 troops in the Gulf ready to attack Iraq for allegedly hiding programs to develop nuclear, biological and chemical weapons.

The threat to Gulf oil supplies comes at a time when global oil stocks have slumped below normal levels because of a prolonged strike in exporter Venezuela, and an unusually cold winter in the northern hemisphere.

Latest U.S. government data show stocks of distillates, including heating oil, falling to the lowest level since 1963 on strong winter demand.

Crude stocks in the world's largest consumer are already at their lowest in 27 years.

Fears of war and a supply crunch have sent world oil prices up by a third in the last three months, driving up energy costs at a time of fragile growth in many rich economies.

The Organization for Economic Cooperation and Development, which represents most major industrialized nations, said on Thursday the world economy would be hit if the Iraq crisis led to a sustained period of high oil prices.

The Organization of the Petroleum Exporting Countries, which controls two-thirds of world exports, has pledged to fill any shortfall should war disrupt supplies from Iraq, which now sells around two million barrels daily.

But industry analysts say OPEC may not have enough to cover if war on Iraq also affects supplies from other Gulf countries, and importing countries may have to fall back on their huge emergency stockpiles to fill the gap.