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8/16/10

In which IKN explains some very basic economics to the West coast Canadian newspaper, The Vancouver Sun (this week's coveted award)

IKN apologizes for using the very same chart twice in one day, but needs must. Here's the chart used in this post early this morning which lays out the trade balance between Colombia and Venezuela.

The reason for the reiteration is this article published today in The Vancouver Sun. The note, written by one Johnathan Manthorpe, doesn't really say much one way or the other. It's a flimsy and non-insightful report that talks in very general terms about Colombia, its recent change at the top and last week's meet between newboy Santos and some dude named Hugo Chávez who you might have heard of before.

Manthorpe's text here isn't great, but it's the dumbass title stuck on the note that gets the Coveted Award. Just to make sure the wider readership is aware, it's not normal to see the journalist write the title of any given article. That honour is usually left to a sub-editor that handles the report and it's here where the Coveted Award gets won. The title given to Manthorpe's report is:

"Colombia's economic prospects attract even its enemies"

So now, dumbass squared sub-ed, I'm addressing you. I'm also going to do this in a very simple style so that even your underemployed neurons might catch on. Are you ready?

1) Look at that chart above.

2) You see the title? It says "Colombian Trade Surplus with Venezuela".

3) That means that every year, Colombia has a trade surplus with Venezuela.

4) That means that Colombia sells more to Venezuela every year than the other way around.

5) For example, in 2008 Colombia sold U$5,000m (thereabouts) more to Venezuela than Venezuela sold to Colombia

6) Are you with me so far, dumbass?

7) That means that Colombia has more to lose than Venezuela if trade is stopped between the two countries.

8) Which is exactly what's been happening this year. The trade surplus has dropped hard, with the first six months of 2010 only showing around $700m in favour of Colombia. A big annualized drop.

9) That's because Chávez got pissed with Uribe and blocked a lot of trade.

10) Still with me, dumbass?

11) So when Chávez went to meet Santos last week, take a wild, flying guess as to who was far more interested in getting trade moving between the two countries?

Look, we all know that you guys up there hate Chávez and think that colour TVs must be hard to come by in the Socialist hellhole known as Venezuela, but, dumbass sub-ed, your moronic title is wrong by a factor of very very lots. If anything it should read "Venezuela's economic prospects attract even its enemies" because Chávezlandia is one hell of a big market for Colombian goods and services. And rightly or wrongly, on a macroeconomic level Chávez's trade embargoes on Colombian products this year have hurt Colombia far more than they have his home country.

So, anonymous sub-ed of The Vancouver Sun, you win this week's coveted award. You have the audacity to handle articles in the paper's biz section without having the most basic of clues about the subject? Well here's what you get as a reward. Enjoy.