You don't have to be on LSD to come up with an auction mechanism like SICAD...but it helps

Bizarro_World_001So the first analysis is in on the operation of the new alternative-to-CADIVI dollar auction system. (And yes, I had to put the scare-quotes in bold type because the particular mechanism they’ve come up with resembles a traditional auction in precisely the same way a juice box resembles a Shakespearean sonnet.)

How to Put this? Um. Well, if SICAD was a live auction, it would go something like this.

Auctioneer: I have here one crisp new dollar bill. Let’s see, do I hear any bids?

Bidder 1: Bs.29!

Auctioneer: twenty-nine I have twenty-nine twenty-nine twenty-nine twenty-nine…

Bidder 2: Bs.27!

Auctioneer: twenty-seven twenty-seven twenty-seven can i do better than 27…

Bidder 1: Bs.20!

Auctioneer: twenty twenty twenty I have 20 20 20 20 do I hear…

Bidder 2: Bs. 15!!

Auctioneer: fifteen fifteen fifteen…I have fifteen…any better…going once, going twice…SOLD

For Bs.10 with 90 cents to the gentleman here!

Yup, that’s how auction-like SICAD is…basically, there’s a band – apparently between Bs.9 and Bs.20 or so. If you bid within it, you get dollars at Bs.10.90 – for individuals, more for companies. Otherwise, no.

In other words, BCV is allocating dollars entirely arbitrarily not to the highest bidders, but to bidders within an entirely arbitrary “band”.

That band is never announced – not before the auction, not after. It then assigns the dollars at a single price that’s also arbitrary and also never announced – since that would be illegal, it not being “the” official rate.

And because there’s just one price, some people get dollars  for less than what they bid, but also – and this is some perverse shit – some people have to pay more than their bids!

And if you happen to bid above or below the secret band? NO DOLLAR FOR YOU!

The thing that stands out to me – aside from the perversity of describing this bodrio as an auction is that this will add yet another layer of mad perversity to the carpeta calvary. Imagine, you can put together a beauuuutiful importer’s carpeta with your pro-forma invoices from your suppliers and everything and then the price you’re assigned dollars at is just different from everything you’ve based your paperwork on! So what’s going to happen when you get audited?

Shudder, folks, just shudder…