Reuters, 01.05.03, 7:55 PM ET By Hugh Bronstein

NEW YORK, Jan 5 (Reuters) - With the exception of Venezuela, where a national strike is strangling the economy, emerging market bond prices were expected to rise this week as as investors bet that the new president of Brazil will shed his radical past and govern responsibly.

President Luiz Inacio Lula da Silva, a one-time hard left union boss who won October's election after steering his campaign toward the political center, was seen winning over the markets with his recent pledges of fiscal restraint.

"The general tone of the market will be better, with Brazil grinding higher and most of the other credits remaining firm," said Christian Stracke, lead emerging markets analyst at CreditSights, a Wall Street research firm.

"The only wild card is Venezuela, but I don't see any contagion effect," Stracke said. "Even if Venezuela drops another five points I don't see that having anything to do with the rest of the market." While Venezuelan bonds have stumbled recently amid intensified opposition to President Hugo Chavez, Brazilian bonds have gained ground on Lula's reassurances that he will not abandon prudent policies in his quest to improve the lot of ordinary Brazilians. He was sworn in New Year's Day.

"The market is giving Lula the benefit of the doubt," said Walter Molano, head of research at BCP Securities, a Latin American broker dealer based in Greenwich, Connecticut.

Benchmark Brazil C bonds <BRAZILC=RR> ended last week bid just above 68. The bonds took investors on a stomach-churning ride in 2002, starting the year in the mid 70s only to be beaten down into the 40s several months ago when fear of Lula was at its highest.

"I think C bonds are poised to break through 70," Molano said. The Lula government has pledged to place pension reform high on the agenda when Congress reconvenes in February. Brazil's bloated social security system is one of the greatest drains on its public finances.

But Martin Schubert, chairman of the Miami-based European Inter-American Finance Corp., warned that Brazil C bonds are pressing up against resistance "based upon technically overbought conditions."

"To me these C bond prices look too high," Schubert said. "Prices have moved up from substantially lower levels on Lula's new cabinet, which has yet to be tested."

VENEZUELA WRITHES, BONDS FALL Thousands of supporters of President Chavez marched in Caracas on Sunday to protest the fatal shooting of two men in clashes related to the work-stoppage.

The killings intensified feuding during the five-week-old strike which has crippled the oil sector of the world's No. 5 petroleum exporter. Foes of Chavez have vowed to keep up the shutdown until he resigns or calls early elections.

Chavez was elected in 1998 after vowing to wrest control from the country's corrupt elite and enact reforms to help the poor. But opposition has grown amid charges the president wants to establish a Cuban-style authoritarian state.

Venezuela DCB bonds <VENDCB=RR>, which traded as high as 83 before the strike, weakened to a bid of 77-1/4 at the start of last week. They closed Friday at a bid of 72-3/4.

"I think DCB will trade lower this week but the pace of the selloff should slow," Stracke said. "I don't think they'll trade much lower than 70 because the market has more or less priced in the fact that Venezuela will have a serious cash crunch in the next three to six months that could challenge its ability to make external debt payments."

Many investors say Chavez is probably on the way out and that Venezuelan bonds are poised to rally on that development. But as the work-stoppage continues optimism is wearing thin.

"The strike could still push Chavez out, but even if it did it would be against a background of serious political instability and economic chaos," Stracke said. "If the strike does not push him out, the government will have to struggle with the slump in oil revenues. So there's no positive scenario for Venezuela that seems probable." Investors will also focus this week on Ecuador, whose bonds rallied on Friday after Mauricio Pozo, a Wall Street favorite, was named as incoming finance minister.

ARGENTINA BACK IN THE NEWS Wall Street is watching to see if Argentina will manage to make a $1 billion payment it owes to the International Monetary Fund on Jan. 17.

The once-prosperous South American nation has come to be held in low regard by the market since defaulting on its private creditors a year ago and more recently on the World Bank.

Top IMF and U.S. Treasury officials said on Saturday they were trying to work out an IMF loan deal with Argentina but talks with the country were not complete.

"Without a new credit agreement with the IMF the Argentina debt situation will fall into a deeper abyss and (the country's) FRB bonds could trade down to the 15 area," Schubert said.

The bonds <ARGFRB=RR> closed last week bid at 20-5/8.

CARACAS, Venezuela (AP) --Thousands of government supporters chanted "Justice! Popular justice!" Sunday at a funeral for two men killed at a political rally amid a month-old strike aimed at toppling the president.

Vice President Jose Vicente Rangel and several Cabinet ministers helped carry the flag-draped coffins of Oscar Gomez Aponte, 24 and Jairo Gregorio Moran, 23.

Thousands followed the coffins waving Venezuelan flags, pumping their fists and chanting. On the way to the cemetery, the procession stopped at the Melia hotel, where Organization of American States Secretary-General Cesar Gaviria is staying, leaving a letter denouncing the recent violence.

Gaviria is brokering negotiations between the government and the opposition on ending the general strike against President Hugo Chavez that has crippled the oil-rich country's economy and virtually dried up gasoline supplies.

Opposition leaders blame Chavez's leftist policies for a deep recession and accuse him of trying to accumulate too much power. They want him to resign or hold a nonbinding referendum on his rule, which he says would be unconstitutional.

Gomez Aponte and Moran died during a melee Friday between Chavez supporters, opposition marchers and security officials. Both sides blamed each other for the bloodshed. At least 78 people were injured.

The violence erupted when several hundred presidential supporters threw rocks, bottles and fireworks at thousands of opposition marchers outside the Fuerte Tiuna military headquarters in Caracas.

Police fought to keep the two sides apart, firing rubber bullets and tear gas into the crowd. Gunfire rang out. The government said it came from police, but opposition protesters insisted it came from Chavez supporters.

"These compatriots were slain savagely, and all suspicion falls on police," the vice president said Sunday at the burial.

Two police officers also were wounded Saturday when gunfire broke out during Gomez Aponte's wake. Chavez supporters fired on police after the government blamed the Caracas police for the Friday deaths, police chief Henry Vivas said.

Officers returned fire using rubber bullets and tear gas. The government claimed one woman died, but Caracas Fire Chief Rodolfo Briceno couldn't confirm that.

Chavez tried to take over the city police force -- which reports to an opposition mayor -- last fall. The Supreme Court ordered Chavez to restore the force's autonomy, but Rangel said the government was considering retaking it.

He also urged Chavez supporters not to be provoked into violence by opposition leaders, whom the government accused of trying to use the strike to prompt a coup similar to one that briefly ousted the president in April.

"Do not be provoked. These are delicate times," Rangel said.

The strike, which began December 2 and includes some 35,000 employees of the state oil monopoly Petroleos de Venezuela, or PDVSA, has paralyzed oil exports and helped drive international oil prices above $30 a barrel. Venezuela is the world's fifth-largest oil exporter and a top supplier to the United States.

The government has fired dozens of striking oil workers and claims it is restarting production.

On Saturday, a tanker carrying 350,000 barrels of oil left for Cuba, PDVSA President Ali Rodriguez said in an interview published Sunday in the El Universal newspaper. Another ship was being loaded with 600,000 barrels destined for the United States.

Venezuela usually exports about 3 million barrels a day.

Chavez said Friday he might consider imposing martial law to try to break the strike and halt escalating political violence.

Meanwhile, leaders of the Democratic Coordinator opposition movement called on Venezuelans to donate between $1.80 and $3.50 to hold the referendum on February 2 as planned.

The opposition presented more than 150,000 signatures to election authorities November 6 to call for the referendum, but the National Elections Council says the Chavez-controlled Parliament hasn't authorized $22 million needed to pay for it.

Chavez, a former paratrooper who was elected in 1998 and re-elected two years later, has challenged the legality of the referendum at the Supreme Court.

by militaresdemocraticos Sun, Jan 5 2003, 11:18pm

All over Venezuela, ordinary voters are outraged by the latest proof of terrorist connections between their country's ruler Hugo Chavez and Al Qaeda, Osama Bin Laden's global terrorist network.

Chavez Under Fire For Al Qaeda Financing

$1M to Al Qaeda: Front page news All over Venezuela, ordinary voters are outraged by the latest proof of terrorist connections between their country's ruler Hugo Chavez and Al Qaeda, Osama Bin Laden's global terrorist network.

Sunday, the nation awoke to find the scandal top news in all states. "Financing of terrorists", screamed the huge headline of La Voz, from Miranda state. In Aragua state, El Siglo announced on its front page that "Chavez gave one million dollars to Al Qaeda". And in Carabobo state, Notitarde came out with an "Edicion Extraordinaria", a special edition, which was headlined: "Chavez gave 900 thousand dollars to Bin Laden's terrorist network". The paper referred to the $900,000 in cash for Al Qaeda and later mentioned the additional $100,000 in food and tents for the Taliban, for a total of one million in assistance. El Nacional, in Caracas, reported that the records of the investigation will be shared with the U.S. State Department in its fight against international terrorism and rogue states sponsoring terrorism.

Faced with the proof of his Al Qaeda financing, Hugo Chavez has so far maintained a complete silence. The "no comment" order extends to his entire inner circle: None of his other collaborators named in the Al Qaeda files have yet commented either. This curious silence follows the pattern of the 9/11 aftermath, when he vanished from sight for days and was the last Latin leader to make a statement.

But to the nation's press, the Chavez / Al Qaeda connection is front page news, and the embattled leader is drawing fire for not wanting to face his actions. " - Zany dictator Hugo Chavez has really gone off the rails this time," said Caracas street vendor Felipe Lopez, 28, while studying the documentation published by dozens of the country's newspapers. "Dictatorial thugs like Hugo Chavez are dangerous to his own people and to the rest of the world."

Desperate for change, voters have renewed their call for free and democratic elections. Hugo Chavez, showing his dictatorial streak, has publicly announced that he will not call elections anytime soon, that he will not finance such elections, and in the event that elections were to be held anyway, he will not abide by their outcome.

Soledad Bravo, a popular Venezuelan folk singer and former Chavez supporter, distanced herself from the strongman, and urged the world to act: " - Freeing ourselves from Chavez is our duty to history."

Background briefings on the Chavez - Al Qaeda connection:

• How did Hugo Chavez react to Al Qaeda's 9/11 terrorist attacks?
• Terror threat from Venezuela: Al Qaeda involved
• 9/11: Chavez financed Al Qaeda, details of $1M donation emerge
• More Facts Uncovered in Chavez - Al Qaeda Collaboration

January 05, 2003

All that is required for evil to succeed is for good men to do nothing. The worst sin is to not speak up and not act when the liberty of a whole people is at stake.

Army Captain Alfredo David Salazar Bohorquez My personal page Chavez in Hiding: Will Not Explain His $1M Al Qaeda Financing More Facts Uncovered in Chavez - Al Qaeda Collaboration 9/11: Chavez financed Al Qaeda, details of $1M donation emerge Venezuelan Conflict Worsens, American Embassy Evacuates Staff Chavez: "Even if 90% votes me out, I will not go" 10-year Prison Terms For Protest Marchers in Venezuela Bio-weapons lab in Venezuela for Saddam and Castro Gold Reserves Looted from Venezuela's Central Bank A news story article has been published: Chavez in Hiding: Will Not Explain His $1M Al Qaeda Financing By Johan Freitas, in Caracas In a pattern that closely follows his reaction to 9/11, Venezuelan strongman Hugo Chavez has gone into hiding...

add your comments

COMMENTS

no source given for this nonsense by fuinseog Sun, Jan 5 2003, 11:48pm

but if you want news about Venezuela see

www.narconews.com

and

www.vheadline.com

(No sign of this "story" from a quick google search either.)

  Venezuela by B. Dillon Sun, Jan 5 2003, 11:52pm

No kidding - because this is going down as we type..

Google will catch up...

related link: www.militaresdemocraticos.com/en/index.html

The Associated Press Venezuela Jan. 5 —

In a holiday shopping season made dreary by Venezuela's general strike, one item was and remains particularly hot:

The bicycle.

Before the strike, streets in the capital were usually choked with beat-up buses, taxis, cargo trucks and cars, and a gasoline shortage in this oil-rich nation seemed unthinkable.

But the Caracas traffic jams and the gasoline vanished when Venezuela's largest labor union and business chamber began a general strike Dec. 2 to demand President Hugo Chavez' resignation.

While motorists wait to fill their tanks in mile-long lines outside service stations, bike stores have been swamped as Venezuelans adopt an alternate form of transportation.

Frank Gonzalez, co-owner of a store in Caracas' upscale Las Mercedes district, said he's never seen such a spike in year-end sales.

"We are selling three or four times as many bikes as we did last year. The demand is incredible. I've never seen a boom like this," said Gonzalez, smiling. His store was bustling with activity.

"What's happening is great for us, but it's terrible for the country," said Gonzalez's business partner, Mauricio Racchini.

Under normal circumstances, bike sales usually double during the holiday season. But in 2002, sales soared well beyond that, thanks mostly to middle-class Venezuelans with some money to spare from year-end bonuses, store owners said.

"Sales are up 300 to 400 percent this year, almost all of it bikes ... and some in-line skates," said Javier Rodriguez, owner of a sports store selling everything from top-of-the-line mountain bikes to used surfboards.

Biking quickly became fashionable at opposition-led marches and street demonstrations. If protesters aren't walking, they're usually pedaling.

"It's fun protesting and riding at the same time," said Patricia Rago, a 39-year-old economist. "Besides, this is a great way to get exercise."

Some Chavez opponents even have created a group called Cyclists for Freedom. They organize "Cyclemarches" of up to 13 miles with rest stops.

And while the bike enjoys new popularity, cars sales not surprisingly have dropped.

The latest statistics from the Venezuelan Automobile Industry Chamber show Venezuelans bought 111,247 cars from January to October 2002, 33 percent less than the same period a year before.

Statistics for November and December have not been released, most likely another result of the strike.

Then, there are the Venezuelans who have never been able to afford a car. In poor areas isolated rural regions and impoverished city slums bikes have long been a necessity.

No new bicycles gleam in the dusty window displays of a rundown shop in Caracas' La Pastora neighborhood. Inside, customers look over spare parts and a few children's bikes with training wheels.

"Business is up, but it's mostly repairs. People here don't have the resources to purchase new bikes," said Emilio Luque, an employee and cyclist.

Most Venezuelans with formal jobs make the monthly minimum wage of $125.00. Roughly half of Venezuelans work in the informal sector hawking items on sidewalks.

For Freddy Machado, a rusty oversize tricycle is his livelihood.

"I need this to survive. Forget recreation, I don't have the time or energy," said Machado, 59, as he pedaled his trike through the trash-strewn streets of downtown Caracas selling bananas, mangos and pineapples from a large basket.

On the Net: Cyclists for Freedom (in Spanish):

Thousands of President Chavez Supporters Bury Victims of Political Violence in Venezuela The Associated Press

Thousands of government supporters chanted "Justice! Popular justice!" Sunday at a funeral for two men killed at a political rally amid a month-old strike aimed at toppling the president.

Vice President Jose Vicente Rangel and several Cabinet ministers helped carry the flag-draped coffins of Oscar Gomez Aponte, 24 and Jairo Gregorio Moran, 23.

Thousands followed the coffins waving Venezuelan flags, pumping their fists and chanting. On the way to the cemetery, the procession stopped at the Melia hotel, where Organization of American States Secretary-General Cesar Gaviria is staying, leaving a letter denouncing the recent violence.

Gaviria is brokering negotiations between the government and the opposition on ending the general strike against President Hugo Chavez that has crippled the oil-rich country's economy and virtually dried up gasoline supplies.

Opposition leaders blame Chavez's leftist policies for a deep recession and accuse him of trying to accumulate too much power. They want him to resign or hold a nonbinding referendum on his rule, which he says would be unconstitutional.

Gomez Aponte and Moran died during a melee Friday between Chavez supporters, opposition marchers and security officials. Both sides blamed each other for the bloodshed. At least 78 people were injured.

The violence erupted when several hundred presidential supporters threw rocks, bottles and fireworks at thousands of opposition marchers outside the Fuerte Tiuna military headquarters in Caracas.

Police fought to keep the two sides apart, firing rubber bullets and tear gas into the crowd. Gunfire rang out. The government said it came from police, but opposition protesters insisted it came from Chavez supporters.

"These compatriots were slain savagely, and all suspicion falls on police," the vice president said Sunday at the burial.

Two police officers also were wounded Saturday when gunfire broke out during Gomez Aponte's wake. Chavez supporters fired on police after the government blamed the Caracas police for the Friday deaths, police chief Henry Vivas said.

Officers returned fire using rubber bullets and tear gas. The government claimed one woman died, but Caracas Fire Chief Rodolfo Briceno couldn't confirm that.

Chavez tried to take over the city police force which reports to an opposition mayor last fall. The Supreme Court ordered Chavez to restore the force's autonomy, but Rangel said the government was considering retaking it.

He also urged Chavez supporters not to be provoked into violence by opposition leaders, whom the government accused of trying to use the strike to prompt a coup similar to one that briefly ousted the president in April.

"Do not be provoked. These are delicate times," Rangel said.

The strike, which began Dec. 2 and includes some 35,000 employees of the state oil monopoly Petroleos de Venezuela, or PDVSA, has paralyzed oil exports and helped drive international oil prices above $30 a barrel. Venezuela is the world's fifth-largest oil exporter and a top supplier to the United States.

The government has fired dozens of striking oil workers and claims it is restarting production.

On Saturday, a tanker carrying 350,000 barrels of oil left for Cuba, PDVSA President Ali Rodriguez said in an interview published Sunday in the El Universal newspaper. Another ship was being loaded with 600,000 barrels destined for the United States.

Venezuela usually exports about 3 million barrels a day.

Chavez said Friday he might consider imposing martial law to try to break the strike and halt escalating political violence.

Meanwhile, leaders of the Democratic Coordinator opposition movement called on Venezuelans to donate between $1.80 and $3.50 to hold the referendum on Feb. 2 as planned.

The opposition presented over 150,000 signatures to election authorities Nov. 6 to call for the referendum, but the National Elections Council says the Chavez-controlled Parliament hasn't authorized $22 million needed to pay for it.

Chavez, a former paratrooper who was elected in 1998 and re-elected two years later, has challenged the legality of the referendum at the Supreme Court.