Paint The Town (Venice) Red: Firsters Rail Against Capitalism

UPDATE: A picture of the lovely couple. Chavez blows kisses while Oliver Stone...naw that's just too easy.



Looking at the headlines from the Venice Film Festival, its hard not to notice the strong anti-capitalist theme throughout. Hollywood's favorite dictator, Hugo Chavez, is there and he brought his personal media consultant, Oliver Stone, with a fresh "documentary" about the beloved leaders "great life story."

Up on the screen, its Michael Moore's latest, "Capitalism, A Love Story."
A 2 plus hour scab picking exercise that concludes "Capitalism is an evil, and you cannot regulate evil."

Taken as a whole, this Venice Film Festival looks like a gussied up political rally for Hate America Firsters...or just Firsters.

As the master scab picker, Moore has gutlessly picked subjects that play to his Firster base. Why not examine the horrors of political repression by modern-day dictators or the treatment of women in Muslim countries. Instead Moore chooses to make films that come across as being made by an overweight, hormonal teenager who is angry at a slightly overbearing father. Good thing for him he keeps choosing his father subjects well, because the really evil ones cut peoples throats, or worse - disinvite you to those fabulous Hollywood parties with the 10 count shrimp.

And how about ol' reliable, Oliver Stone. His "documentary" plays like a pre-teen girls' love letter complete with XOXOXO and a Hello Kitty stamp. Stone, the Lion of Hollywood Firsters, lovingly presents Hugo's story as Venezuela's "peaceful revolution" since Chavez came to power in 1998: that "he(Chavez), who grew up in a peasant family, is an emblematic figure of bottom-up change."

I guess being a Firster is like living a life of a perpetual child: you know where the dangers are and are able to avoid them while living at home and complaining about Dad.

The Trouble With Rubles

The big bluff is almost over. For the last several years Russian leader Putin (I'm not sure what he is calling himself these days) has put on a show of force - promising a return to Russian greatness. From warships in the Panama Canal Zone to attacks in Georgia, the Russians have been everywhere trying to reassert their old influence. And there have been the assassinations to intimidate and punish political rivals and enemies.

The growing problem for Putin is that his economy is a one trick petro pony (they have lots of other mineral resourced too, but that didn't work well with pony). All of it: minerals, crude oil have sharply declined in value and while the Russians are putting up a bold face, the economic reality will have them mothballing those ships and watching their currency devalue further.

To illustrate, the following graph shows how many rubles a dollar would buy. It's a 180 day graph and it shows the accelerating problem since August. Built at exchange-rates.org.



In some cases, workers are not getting paid and the protest in Vladivostok is an ominous sign for the Kremlin...especially since starting in that area is always a good strategy in Risk.

Putin will continue to crush dissent because he probably believes this downturn in commodity prices is short-term. Like Washington, Moscow is pumping cash into selected companies to try and buy their way out of this downturn. And also like Washington, these guys don't seem to understand that if you are willing to give your money away for nothing, it will have no value and the impact of all of this "stimulus" is deficits and a longer recession.

These troubles in Russia signal even bigger trouble for smaller countries built on the same strongman/petro economy. Venezuela has something like $65 barrel oil built into their budget. PDVSA (Petróleos de Venezuela, S.A.), Venezuela’s state-owned petroleum company does not have the resources to develop their oil fields. Hugo has directed much of the PDVSA revenue to support his expanded social programs. Hugo will accelerate the problem if crude prices stay in the $30's for an extended period of time.

With a little perspective, one might see the positives of this global recession. Just one year ago, Putin and Hugo were looking to become regional, if not global, forces based solely on $140 oil. A 75% hair cut has funny way of curbing ambitions.

Oil prices will rebound. The global economy will recover and futures will turn up as soon as demand starts to rise - literally within days. The problem for Russia is the long-term impact to the structure of their economy. With each of these downturns, Russia is losing the social and industrial infrastructure that is not being replaced during good times because they do not have a dynamic or inventive system.

The best analogy of the economic situation in Russia is a real estate flipper being upside down on all of his mortgages. Even if, over time, the value of the homes come up to the prices you paid, the costs of holding the homes in the mean-time probably means you are bankrupt. So too with Russia. The fixed costs of the economy are established and Russia will print the Rubles it needs to run the government-owned economy. The result is further currency deflation and of course the inflation of real goods. A double whammy for an economy based on government spending.

There is probably something of a warning in there for the US as well, but why worry about Rubles? They don't hurt anybody.

Hugo: Drive By Dictator

Hollywood's 2nd favorite beloved leader was riding in his limo and spotted a nearly complete shopping mall in Caracas and said:

"They had already built a monster there," Chavez said. "I passed by there just recently and said, 'What is this? My God!"'

Which, of course, is Blago speak for "I don't remember getting any kickbacks on this project?"

Best quote from the AP writer (Via FoxNews), "[This] illustrates Chavez's tendency to govern from his gut, and to leap in when he thinks other government agencies — in this case city planners — aren't doing their job.

Of course with the ever expanding number of "Czars" we should expect similar "rule from the gut" kind of governance. Did I really see a middle class czar position named by Obama? Ugh.