UPDATE 2-Venezuela bank law makes nationalizations easierhttp://www.reuters.com/article/idUSN1729156220101217
As visions of sugar plums dance through his head, only Barack Obama could possible appreciate the importance of such power usually reserved for fellow despots and aspiring dictators.
To fully recognize how we are now experiencing life in a parallel world, read this article and simply replace the name Chavez with Obama. Look at what has happened in your America over the past two years and you will see how very fragile freedom really is to you and your family.
* Banks must hand 5 percent of profits to social groups (already happening in the U-S)
* Part of package of laws strengthening Chavez control (no laws required--simply appoint like-minded hacks without pesky procedure of background scrutiny by irrelevant citizen elected legislature)
* Parliament due to give him decree powers for a year (Adds details of law, decree powers) (Not necessary, President already has control by executive power)
Embellished by Obiter Dictum
CARACAS, Dec 17 (Reuters) - Venezuela's parliament (US Congress) passed a bill on Friday making it easier for President Hugo Chavez (Barack Obama) to nationalize banks and trim their profits, part of a legislative onslaught to entrench socialism in the oil exporting nation (former industrialized exporting nation).
Later in the day, the National Assembly is also due to grant Chavez (Obama) powers letting him pass laws by decree for a year, a move criticized by opposition parties and the U.S. State Department as autocratic. (the government of Venezuela) For details see [ID:nN16274240].
The banking law creates stringent new operating rules that include forcing banks to hand over 5 percent of their profits every six months to community groups.
It also allows Chavez (Obama) to order the takeover of institutions that he deems problematic, a move previously made by the banking watchdog. Chavez (Obama) has increased the state's role in the sector this year, but a total takeover of banking is unlikely (likely).
"It adopts a group of measures to correct problems that have been produced in the banking sector at the cost of the government's objectives and the welfare of the nation," says the text of the measure approved in the early hours of Friday.
Chavez (Obama) has repeatedly threatened to nationalize any institution that fails to meet his objectives of ending "speculation" in banking and increasing credit to "productive" parts of the population.
Few analysts believe the socialist president plans to nationalize banks outright, but many say he could further increase the state's role in the industry. U.S.-based economists at IHS Global said last week that they believed the risk of nationalizations in the sector was now "very high."
In the past 12 months the government has taken over a dozen (a hundred) small failing banks and paid back deposits to most customers. Chavez (Obama) spent $1 billion (trillion+) last year on the local unit of Spain's Banco Santander (SAN.MC) (non-existent shovel-ready projects). All together, public banks make up about one-third of the industry.
Last week, Chavez (Obama) repeated his warning to banks that they should meet government-set lending targets or face takeover, and he specifically mentioned the local unit of Spain's BBVA (BBVA.MC), (all American citizen's assets) among others.
Once the law is signed by Chavez (Obama) and published in the government's Official Gazette (New York Times), banks' participation in the insurance industry and brokerages will be strictly limited.
Several of the banks that collapsed this year had overextended themselves with takeovers in the insurance sector, or were accused by the authorities of fraudulent activity in brokerages (however, no million dollar bonuses were withheld).
The law also stipulates that banks set up a fund worth 10 percent of their capital to pay for wages and pensions in the event of bankruptcy.
Banks are still profitable in Venezuela (The U-S), although a two-year long recession has tightened their margins. Analysts say the new law makes it harder, but not impossible, for them to operate successfully.