Brazzil

The only Myth and Fairy Tale created by the press is the above article.

The author of this article must have some kind of agenda based on his analysis of the Brazilian economy.

His analysis left out a lot of information that underscore the resilience of the Brazilian economy.

He did not mention on his article that Brazil has been able to have such a performance despite operating under very difficult circumstances for example: globalization has been having a major restructuring impact on the Brazilian economy as the enclosed study shows. Here is the analysis of Joseph Carson about the global manufacturing sector and the major negative impact that has been having in the Brazilian economy:


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Manufacturing Payrolls Declining Globally: The Untold Story
By Joseph Carson, Senior Vice President and U.S. Economist
Alliance Capital Management L.P. - October 10, 2003

“According to our analysis, between 1995 and 2002 roughly 22 million jobs were lost globally, a decline of 11%. Yet over the same period, global industrial production jumped more than 30% - a remarkable gain in productivity.

Contrary to conventional U.S. beliefs, the research found that American manufacturing workers weren't the biggest losers. The U.S. lost about two million manufacturing jobs in the 1995-2002 period, an 11% drop. But Brazil had a 20% decline. Japan's factory work force shed 16% of its jobs, while China's was down 15%.

Joseph Carson, director of global economic research at Alliance, says the reasons for the declines are similar across the globe: Gains in technology and competitive pressure have forced factories to become more efficient, allowing them to boost output with far fewer workers. Indeed, even as manufacturing employment declined, says Mr. Carson, global industrial output rose more than 30%.

"The argument that politicians are throwing out there is that we are losing jobs and nobody else is, and that is wrong," says Mr. Carson. "What I found is that the loss of manufacturing jobs that we have seen in the U.S. is not unique. It is part of a global trend that began many years ago."”


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The author of the article also did not mention that the Brazilian economy had been effected in a negative way during various years by the collapse of the Argentinean economy and the negative effect that that collapse had in the countries around Argentina including Brazil.

Despite all that the Brazilian economy managed to hang on, and had a modest performance.

I agree with the policy of the current Central banker in Brazil Henrique Meirelles and he should fight inflation with higher interest rate to keep high rates of inflation to return to the Brazilian economy.

What is happening in the real estate area in Brazil is also something positive for the Brazilian population regarding the availability of long term mortgages and so on…

Only a fool would not see all the improvements being made in the Brazilian economy.

.

It cannot be denied that Brazil's economy like many others in the world like Argentina, Chile etc have benefited from record high demand and prices in the commodities sector. Embraer is an exception to this. Petrobras is a concern globally but again it is in oil. It will take one or two missteps in the commodity market to cool off the "boom." Are we at sustainable growth??

It does not really matter. Defeatists, both foreign and domestic keep saying the same thing over and over again, last year, the year before and so on. Just words, means nothing… Irrelevant in principle and jealous in character.

Brasil has all the resources (natural and man-made) the world wants and desperately needs. To complement, Brasil has no enemies but partners all over the world.

The author of this article still thinking 15 years ago, when for the most, the Brasilian economy was solely dependent on the US and EU. Those days are over, forever gone!

Lula, stay the course…

Costinha

Background do autor:
“I spent two years at Boston College and accumulated a lot of debt, so these awards are invaluable, especially since studying abroad is part of my honors capstone experience through Commonwealth College. It allows me to satisfy my thesis requirement and graduate with honors this fall.”

Torres, who in 1989 moved with his family from Brazil to Amherst, originally chose to study business at BC after high school. “After two years I came to the realization that the business world did not suit my interests,” he says. “I decided to transfer to UMass Amherst to pursue my passion for politics that began after a trip back to Brazil in 1998—which is what my father had suggested all along. I have two older brothers, Afranio and Rob, who are alumni. And my mother got her master’s in bilingual education here as well, so we are well aware of the quality of the educational experience.”
http://www.umass.edu/sbs/academics/students/torres.htm

Of course business doesn't suit the author's interest! Exactly what happens to the locals here in Brazil. They want to study sociology, Philosophy... Work? Business? Sacre Bleu! This is the work for the dropouts like me.
I worked as a contractor abroad for the past 25 years. Although dropping out at 7th grade I made more money that PhD in US colleges. Why? Am I a genius? No! Those diplomadinhos have never been competition for me.
That's why you erradicate poverty. (You don't know the place I rise from!!) By working hard and tek on any foreign competition.

I am an expat in Brasil. I have been visiting Brasil for 23 years and now live here for 2 years. I am not an economist but one need not be such to see the amazing and wonderful progress Brasil has made over these years.
Yes, interest rates do hold back economic progress. Yet I can understand Lula wanting to fight inflation first. I remember those days of Weimar money. It was a horror for all but truly awful for the working poor.
Something new and creative will have to be done with the currency and interest rates. The infrastructure is undeveloped and needs massive improvement. Education is dreary.
Yet, when all is said and down two things have remained constant in Brasil. The wealthy don't care a damn about the poor and corruption is massive. These two things will prevent Brasil from ever acheiving permanent improvement.

I just finished my 12 page paper on Brazil for International Marketing and must say that this article is quite good. Overall, the coming decades will support the Gerdaus, the Vale Rios, and Petrobras commodity type corporations in Brazil as resources are becoming evermore scare and countries like China will be demanding them in unprecedented quantities. From the outside Brazil looks pretty good economically, but the private sector and wealth distribution is still the worst in South America. Besides the wealthy who are unusually selfish, the people have to want to work. You do not need a PHD to understand that the Japanese and the Americans have a higher standard of living becuase they come from work cultures and work more than other nations that are less developed and do not like to work as much. No that certain pockets of work culture in Sao Paulo and other cities do not exist in Brazil, it is just that they are the exception. But who said life was all about work? A 1st world Brazil would be kinda boring.

Boring as opposed to what??? Corruption? Violence? Poverty?

- The Chinese currency, the Yuan is not trading at 8,23 against the US$
but at 6,83 !!!!
The last time it traded at 8,23 was in July....2005. Or 3 years ago.
Quite a difference in price...and time INaccuracies !
I bet the article writer did not check the sources, or the
- The Brazilian average worker income of Brl 1208.- is ONLY for the 6 metropolitan areas......representing 40 % of all the workers. .
Therefore the average income is MUCH LOWER on a national basis. But of course the IBGE are accomplices of Bin the Crook and dont publish the NATIONAL average....ON PURPOSE. Cheating and hiding...is Bin the Crook...name of the game.
Stats further manipulated because the Brl 1208.- represents ONLY the registered workers.
But it happens that in Brazil 60 % of the workers are in the informal economy and therefore NOT registered. If not registered...they dont appear...by definition !
That would further reduce the national average estimates a second time.... also by definition.

I bet the article writer did not check HIS sources, not even the dates they were published. A Simple Proof is the Yuan currency rate of 8,23 to the US$.... the junkie has mentionned.
There are many other BIG errors, but coming from a new JUNKIE reporter,
Brazilian or not...... is quite normal !!!!



Also, one thing that makes me constantly laugh is the Brazilian foreign currencies reserves.
Brazil had then a top of US$ 92 billion of fgn curr. reserves...by April 1999, ...... weeks before they DEPEGGED their currency and let it collapse by 73 %.
Funny...but so it is !!!!!
Even more funny is that US$ 92 billion at the then exchange rate (April 1999) .....is not far away from Us$ 200 billion....AT TODAY (July 200 EXCHANGE RATE.
Better yet, in 1999 the country GDP was lower than today GDP.
Meaning the then $ 90 billion fgn curr. reserves where comparatively HIGHER than TODAY !!!!
Wellll ... ss said....that did not prevent them to let their currency simply COLLAPSE !!!!!

and to Sullivan : Ohhhh yes....I bet there are more favelas than years ago. But you probably have never gone there !!!!
I can even add that the SP and Rio favelas are somewhat "luxurious" slums....when compared with favelas in ALL other Brazilians cities.
No doubt you did not go there...either !!!!
Sure in Ipanema, Copacabana, and chic areas in SP, many luxurious buildings have been developped....for the 5-10 % minority.
But so few...for the 90-95 % majority !!!!!!

The man with itchy genItalia living north of Italia.

Hey…. Herpie, you are due for another enema!

Costa

China :
Early in 2006, their government INCREASED their TOTAL GDP estimates by around 15 or 20 % for the whole previous 3 years....due to internal errors. Strange....but so THEY DECIDED.
Great isnt it ?
Yessssss......but in 2007 the World Bank REDUCED the China TOTAL GDP by around 20 %....to better reflect reality.....as the World Bank said !!!!

Obviously that give a tricky idea to the Brazilians cheaters.

Welllll....early in 2007, Brazil was so ashamed of their GDP growth rate....they simply changed the formula to SHOW IT HEALTHIER....than previously reported but of course ONLY FROM the years Bin the Crook started in his new job as President.


YESSSSSSSS.....If one look closer between the old and new methodology......it is very strange that BEFORE Bin the Crook, the new method has mostly REDUCED the GDP growth rate, AND INCREASED IT....FROM 2003 DATE BIN THE CROOK TOOK HIS NEW JOB !!!!!!!

Welll....nothing will stop Bin the Crook to cheat, lie and hide on a permanent basis !

Brazil did EXACTLY what China did :
They RAISED their TOTAL GDP.

The proof is right below.....in Brazilian language :
A revisão da metodologia do PIB (Produto Interno Bruto) nacional elevou a posição do Brasil no ranking das maiores economias mundiais, segundo apontou levantamento da consultoria econômica Austin Rating.

O PIB em valores em 2005, segundo a nova série das contas nacionais, ficou estimado em R$ 2,148 trilhões. Na série antiga, o PIB havia ficado em R$ 1,937 trilhão.


A little bit easy copy cat than China !!!!!


LAUGH---LAUGH....LAUGH....LAUGH.....

Viva Bin the Crook and his 4000 liars and thieves !!!!

The article above was well written, yes, a small mistake as ch.c. has pointed out with regards to China's currency, but well written.

I am beginning to wonder if you are really an economist when you write statements as follow, and others that you have written in the past.

"I agree with the policy of the current Central banker in Brazil Henrique Meirelles and he should fight inflation with higher interest rate to keep high rates of inflation to return to the Brazilian economy."

'What is happening in the real estate area in Brazil is also something positive for the Brazilian population regarding the availability of long term mortgages and so on… "

Please explain to us how high interest rates and lack of economic growth, which produce jobs, enable Brazilians to afford any type of morgages, long term or short term.

Just got to read the article and the comments. Lets not mind the author´s background nor the errors pointed out by Ch.c (thank God he is not Daniel Torres´s Thesis adviser ). I found the article interesting and some questions asked by the commentators thought provoking.Please permit me to summarize some questions without specifically citing names:

1.

It cannot be denied that Brazil's economy like many others in the world like Argentina, Chile etc have benefited from record high demand and prices in the commodities sector. Embraer is an exception to this. Petrobras is a concern globally but again it is in oil. It will take one or two missteps in the commodity market to cool off the "boom." Are we at sustainable growth??

Are we at a sustainable growth? A great question.

2.

Of course business doesn't suit the author's interest! Exactly what happens to the locals here in Brazil. They want to study sociology, Philosophy... Work? Business? Sacre Bleu! This is the work for the dropouts like me.

Where are we going to find jobs for graduates of Sociology, Philosophy, etc? Are we not going the same way as Saudi Arabia, Pakistan, etc; who churn out religious scholars?

3)

Boring as opposed to what??? Corruption? Violence? Poverty?

May sound sarcastic, but an extremely valid question.Do we want to remain an "exciting country" with those three factors corroding our society?

4.

"I agree with the policy of the current Central banker in Brazil Henrique Meirelles and he should fight inflation with higher interest rate to keep high rates of inflation to return to the Brazilian economy."

'What is happening in the real estate area in Brazil is also something positive for the Brazilian population regarding the availability of long term mortgages and so on… "

"Please explain to us how high interest rates and lack of economic growth, which produce jobs, enable Brazilians to afford any type of morgages, long term or short term." I am also curious to get the explanation!

I think it is a good article and some great questions were asked and it would be interesting to put forth the same to our country´s planners!

A few small mistakes aside, a great article as it says what those living here see and feel day to day. Adjusted for population growth and new workers entering the market and inflation, we are not growing right now, just becoming more indebted to the banks with limited access to capital at appropriate interest rates to grow our businesses.

Adjusted for population growth and new workers entering the market and inflation, we are not growing right now, just becoming more indebted to the banks with limited access to capital at appropriate interest rates to grow our businesses.

Joseph speaks for all those small and middle sized businesses who are struggling to stay afloat, without expecting any government handouts. Good comment.

I have had quite a bite more to write in reference to what Joseph and you wrote, but I decided not to do so but instead wait for Ricardo's answer to my comments first. I think Ricardo is to far removed from the economic realities on the ground in Brazil and the daily life struggles that is taking place in "the Brazilian economic 'miracle.'"

I think he needs to return to Brazil and spend a minimum of one month (two months would be better) on the ground, travelling from the north to the south, so that he could get a better perspective of what is actually taking place.

I agree but Ricardo would certainly need a guide. Someone who would take him in places to meet real people / see for himself their real life and not just to visit the glass towered types like Abe. I'd be happy to do so. I think one month would not be enough but that's all I get each year.

I have had quite a bite more to write in reference to what Joseph and you wrote, but I decided not to do so but instead wait for Ricardo's answer to my comments first.

I am also waiting for Ricardo´s reply as I thought it is strange that he is supporting the decision of Meirelles to increase the SELIC rate to 13% to "curb" the inflation. My prediction is that this rate is going up further by the year end to around 14-16% (though Ch.c had questioned me a few weeks ago about my forecast). One should remember that it is an election year (municipal) here and until then we could count on the inflation rate to be kept down (artificially) and then nobody knows how it is going to behave.

btw, what did you think of the latest (and probably the last) Doha round of talks? I read that Argentina is furious with Brazil!

I think he needs to return to Brazil and spend a minimum of one month (two months would be better) on the ground, travelling from the north to the south, so that he could get a better perspective of what is actually taking place.

He should come back and spend a couple years....that would change his tune.

1) He disappeared for now....unable to answer our questions and comments.
2) Ricardo is a great junkie as I said so many times. He has such a long term view....that he changes his visions...every 6 months ! Hmmmm and better yet.....he is 100 % sure, as he wrote himself...that HE is right. Such as nationalizing Petrobras at the time of high crude oil prices. Probably to DE-nationalize it again when prices will be low again !!!! Yessssss pay the existing shareholders, locals and foreigns, a fair price when oil is high. And resell the company at a fair price when oil prices will be low...is Ricardo long term vision.
3) Wellll...he doesnt understand that with NO trust, the FDI will evaporate....not only in oil exploration....by definition. But he had not this vision...for now...of course !!!! Hmmmmm
4) It also happens that Petrobras will need over Us$ 200 billion in foreign money to develop their Tupi and Carioca oil fields. But Ricardo has not raised the question to himself of how this money is going to be found...if Petrobras is nationalized. Hmmmm
5) Ricardo, 6 months ago, had a great long term vision of why China with their foreign currencies reserves should invest US$ 200 billion...only in Brazil....of course. But he has of course not raised the possibility that the US$ 200 billion in fgn currencies Brazil has.....SHOULD/COULD BE USED...of course !!!! Hmmmmm....I wonder if Ricardo...doesnt need more fertilizers in the feijado filling his whole
brains !!!!!


And I can only repeat that having the WORLD highest interests rates...after inflation, and on top of that with the Brazilian Banks lending rates, with also the world highest spreads (on top of the Government Highest Borrowing rates) is beneficial to entrepreneurs, borrowers and mortgage rates...UNLESS they are GOVERNBMENT SUBSIDIZED....one way or the other !

And the higher....after inflation....borrowings rates are.....
A) the higher it will cost to the government on their annual budget, reducing their ability to develop infrastructure, healthcare, education, low cost housings.
B) the higher the re-lending costs will be to entrepreneurs etc etc
C) the higher the defaults rate will be, obliging banks to further increase their already high profit margin rates (spread)!!!!

Things the genius Ricardo had no time to think about...yet !!!!

Welll......my conclusion is simple :
- The Brazilian currency has not been strong due to the economic NON prowess, but simply by offering the World Highest Interests Rates...after inflation. And these rates are penalizing the whole economy.
No one, or few at best in Brazil, understand the Risk Free Investment strategy. Which in its basic form means :
- If I can invest, risk free with government bonds at lets say 14,5 n;nually for 5 years, my reward on my riskier investments (stocks or investments in private business) should be several percents HIGHER than the risk free rate of return.

Hmmmm....doubtful that the genius Ricardo has ever once thought about that. Because he simply knows nothing about investing....neither as an entrepreneur, nor as a clever long term investor.

And I can only repeat that having the WORLD highest interests rates...after inflation, and on top of that with the Brazilian Banks lending rates, with also the world highest spreads (on top of the Government Highest Borrowing rates) is beneficial to entrepreneurs, borrowers and mortgage rates...UNLESS they are GOVERNBMENT SUBSIDIZED....one way or the other !

Ch.c, you got me here. Is it "UNLESS they are Government subsidized" or "PROVIDED they are Government subsidized"?

Ch.c has punched me out by writing about all of the issues that I intended to address after Ricardo had answered my question including the issue of renationalizing Petrobras. I wish I had gotten a chance to make the comments myself, but it is done.

Now, we continue to wait for answers Ricardo. Please educate us.

"what did you think of the latest (and probably the last) Doha round of talks? I read that Argentina is furious with Brazil!"

I have to admit that I have not been paying attention to "the latest (and probably the last) Doha round of talks." I guess it is because I am not optimistic that they will be sucessful. Hopefully I will be proven wrong. Lets see.

Thanks for the reply. But please read my last question to Ch.c. Did he mean "UNLESS" or "PROVIDED"? Or is my English going down the drain?

Ah, re your comment:

Ch.c has punched me out by writing about all of the issues that I intended to address after Ricardo had answered my question including the issue of renationalizing Petrobras. I wish I had gotten a chance to make the comments myself, but it is done.

Count on Ch.c to come barging in like a bull in a China shop

You are right the correct word should be "PROVIDED." I cannot believe Ch.c let that one slip by.

I am leaving for St. Kitts tommorrow morning and expect to be off of the internet for the month I am there. I was hoping Ricardo would have addressed our comments and questions before I left. Anyway, upon my return I look forward to his answers. See you here in a month.

I am leaving for St. Kitts tommorrow morning and expect to be off of the internet for the month I am there. I was hoping Ricardo would have addressed our comments and questions before I left. Anyway, upon my return I look forward to his answers. See you here in a month.

I guess you are going to spend your one month vacation at home. Have a great stay in St.Kitts with your family. When are you scheduled to sail again to the ME?

You are right the correct word should be "PROVIDED." I cannot believe Ch.c let that one slip by.

I understood him perfectly well, but just wanted to make sure that the newcomers did too regarding his position on the high interest rates that can discourage potential entrepreneurs from launching projects that generate jobs. That is what Joseph was talking about, wasn't he?

Anyway, all the best and have a nice stay in St.Kitts and look forward to be in touch.

I hear a lot of talk about interest rates, which is nice, and always relevant to a certain point. But the reality is that what Brazil really needs is reform that facilitates business and infrastructure development. There's too much bureaucracy. Tax reform is also urgently needed, which leads to one of the big, if not biggest problem in Brazil - excessive government spending.
Those are the real concerns to tackle in order to achieve long term, sustainable growth.

Hi Ricardo C. Amara,

I have read your article, “The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil”. I think that it is breath taking to read your article. Please keep your hands off China.

With all the respect, if you ask Brazilian government to nationalize PBR, why should China invest in Brazil? You ask China to invest in Brazilian water. After so many years, when water is in high demand, you may ask Brazilian government to nationalize water after oil!

You ask China to invest on your dream of nuclear reactor, high speed Internet … etc. Why does not China invest in China? You are only a dreamer.

You also ask Brazilian government to adopt the New Asian Currency. You do not even have any understanding of Asia. I would say in 50 years time that Asia would not have that new Asian Currency. Chinese Yuan is not a free float currency.

Please keep your hands off China and Brazil as well. China is going to be a capitalist country. Why should China invest in a backward looking country, which you suggest.

Your PBR nationalization plan just simply keeps any foreign investment off Brazil in the future.

Regards,

Tom

If any emerging economies will benefit from the collapse of America, there will be two, possibly three giants: China and India; pure and simple. Possibly the reformed (still powerful) Russians will also find a place among the new big guys, primarily because it has big guns.

Brazil, despite all this recent overconfidence, will be lucky enough if it gets at all a place at the “Kiddies Table” during a Thanksgiving dinner party. More than likely, the kitty Brazilians will be well fed, and allowed to roam around a bit, but always under the watchful gaze of one of the grown ups at the big table; liable to be spoken down by a frowning any adult at any time, if found being naughty or feuding with the other emerging kids.

Aim for achieving Regional Hegemony! I think this is the most Brazilians can hope for.
As the U.S follows England’s path of decline from about a hundred years ago, the time is now due for more than one billion proud Chinese zealots to take the Yankee’s leading spot.

It’s a very likely scenario! With that in mind, I’d suggest Brazilians just start behaving now and stop roaming to loud or too far, lest the Chinese may already on the watch.

The forces at the core leading forward two of the emerging giants' great cause are their respective Communist Parties; even where it’s no longer officially in power.

The theoretical basis guiding their thinking remains Marxism-Leninism, despite the current, fancy imperialist surfaces, which in the end, will be shed like a dragon’s skin, so that their peoples can fully embrace the return of the true cause and resume the true path.

Since the successful national revolutions, there have been, naturally, communist parties in both great nations, without which the Marxist-Leninist revolutionary theory would not have been developed and inculcated into so many for so long. Once the dialectical forces inevitably trigger the materialistic carcass to drop, a new reformed covering will emerge based on its true foundation, as set by the wisdom of Lening and Mao.

But right now,it is time for Brazilians to enjoy the best Olympics the planet has ever seen, and reflect upon its future, the forthcoming age of Enlightment under a new world order.