PDVAL Math

For this exercise, assume: You have a $28 million budget for transport. The maximum payload of the Boeing 777 you’re using is 102 tons.  The distance between Buenos Aires and Caracas is 5086 km. The marginal cost (in terms of extra jet-fueled burned) of transporting one ton of cargo over 1000 km. is $91. The…

A Patchwork Orange

Ever notice how chavismo’s instinct, when facing a clear policy failure, is always to see how they can patch it up? Take SITME – the Central Bank’s baroquely controlled alternative to the just-as-baroquely-controlled CADIVI foreign exchange control system. SITME amounts a patch on the old parallel dollar market, which the government tolerated as a patch…

SITME Bond Yield Voodoo

The kicker is that your bank has to document every step of that operation to the Central Bank, which is thereby empowered to effectively control the implicit price you pay for each dollar, and the total amounts involved. That, as I grasp it, is the short version. Now, it seems very clear to me that…

Game Changer

As you see the opposing team running, ball-in-hand, towards your goal, you could be forgiven for concluding that somehow, in the last few minutes, the game you were playing had changed. You may still be wearing soccer uniforms, there may still be 11 of you on a field against 11 on the other side, but…