Why insist on playing with fire, which is precisely what this
government and its so-called allies are doing when so much time and effort are wasted on a
nearly pointless cabinet shuffle, while vital matters at hand go unresolved?
By Brazzil Magazine

Seven editions in three years of existence have confirmed the São Paulo
Morumbi Fashion as the most important display for fashion in Brazil. The latest exhibition
held in the Pinacotheque of the Ibirapuera Park from July 4 to July 7 to show the 2000
Spring-Summer collections from the main national labels counted on British supermodel Kate
Moss, whose girl-next-door looks and humility made her the toast of the party. But this
reinforcement wasn’t needed.

White was the color of choice and inspiration was sought in the romanticism and
childhood of the ’80s. Dresses were of all lengths. When color was needed the favorites
were yellow and orange. There were even sunglasses with yellow lenses.

Fashion writers were curious to see what Alexandre Herchcovitch—one of the most
respected fashion designers—had to show. They were not disappointed with his complex
style and use of transparencies and whites mixed with orange tones. Herchcovitch, who used
to be an enfant terrible creating among other eccentricities the pants that let
pubic hair show, was back though much better behaved. He seems to have adhered to haute

M. Officer went for the shocking effect and the show-it-as-it-is look by eliminating
the dressing room and making its models change clothes on stage, among the hangers that
are known as araras (macaws) in the fashion world, making the act of denuding part
of the show. The revealing spectacle—with futuristic wardrobe for the models—was
a joint effort by stylist Carlos Miele and iconoclast pop artist Nelson Leirner, whose
work is representing Brazil in the Venice Biennial, one of the world’s most important art

Inspired by erotic British photographer David Hamilton and his nymphets,
Ellus present a collection it called "sexy innocence" with lots of worn jeans,
white shirts and T-shirts. It was Ellus who hired Kate Moss to model with exclusivity for
the company. But Brazilian Renata Maciel shone as brightly as the British model.

The fashion industry in Brazil has come of age. There are 22 companies generating $300
million in businesses a year while creating 1.4 million jobs. Many Brazilian models and
designers are also getting international attention, among them designer Ocimar Versolatto
who has made a name for himself in Paris. Beverly Hill’s Giorgio has signed a $500,000
exclusive contract with Brazilian Fause Haten to sell his clothes in the U.S. Gisele
Bündchen and Isabeli Fontana are two of the best-known models overseas. Fontana was
chosen by Vogue as a promise for the new century.


For five months the public was subject to a publicity barrage touting the virtues of
the privatization of telephone services in Brazil. Famous and pretty faces, catchy jingles
and TV spots talked about a new era of free competition and better communications. But
when it came time for a first taste of the promised goods it was chaos.

July 3, a Saturday, the day the new long distance service started, only 6.2 million
calls from a total of 29.7 million were completed. During the following days the situation
got even worse. On Wednesday, President Fernando Henrique Cardoso intervened, giving an
ultimatum of three more days for the problems to be fixed, first making sure that this was
the time the companies themselves thought was necessary to normalize the situation.
Normalize seems like such a strong word. The telephone blackout brought to light a little
known fact of the Brazilian communications world: not completing a connection half the
time you try is considered normal.

For a whole week, people trying to call long distance became frustrated from having to
listen to busy signals, recordings announcing the impossibility of completing the call,
and sometimes paying to talk to a person in another city or even another state than whom
he intended. The government blamed the new concessionaires while they pointed the finger
at each other and at the government.

The private telephone companies knew how risky the switch would be. Not only was there
not enough time for all the needed tests, but the firms were also having trouble getting
knowledgeable technicians to do the work. Embratel, the state long-distance carrier, which
continues to offer its services together with the private firms, is accused of rushing
things. Despite holding the monopoly of all long distance, Embratel had to distribute 70
percent of this market to the regional telephone companies and they seemed eager to get
out of that deal. The government company also wants to have a lead on its service before
January 2002 when competition will be wide open with regional firms being allowed to
handle long distance calls to areas outside their concession territory.

For several months residents of São Paulo, where almost half of the country’s
telephone calls are made, have been fuming at Telefónica, the Spanish conglomerate that
took over the system in 1998. The new company was quick in adding two million lines to the
five million already in operation in the city to supply a population hungry for
telephones, but the addition was accompanied by several problems including constant busy
signals, crossed lines and lines that went dead for days.

Their sloppiness resulted in fines. And Telefónica—together with the Rio
concessionaire—had to fork out $1.7 million. The federal government is again
threatening million dollar fines that might reach as high as $23 million against those
responsible for the most recent snafu. These companies are also being pressured through
the state and local Procons, consumer protection agencies, to pay damages to their
customers who lost business or had other losses due to their inability to make calls soon
after the switch.

Embratel has been mentioned as the biggest sinner of them all. Despite all the problems
of privatization it’s believed that it will democratize telephone in Brazil. It’s expected
that by the year 2002 there will 33 lines for every 100 Brazilians instead of the 13 that
are available today.


Washing machines were still a novelty and most Brazilians were happy—or didn’t
know better—with the traditional funny-smelling bar soaps used to wash their clothes
when Unilever—an Anglo-Dutch conglomerate—introduced OMO to the country. That
was in 1957. Brought from England, clothes detergent OMO was an abbreviation for Old
Mother Owl and the packaging itself contained a drawing of such a bird. Since then OMO has
become the hands-down favorite laundry detergent in the country representing half of the
400,000 tons of laundry soap produced annually in Brazil.

More than that, Gessy Lever, the Brazilian subsidiary of Unilever, dominates 80% of the
laundry detergent market with names like Ala, Minerva, Campeiro, Brilhante, and naturally,
OMO. Procter and Gamble comes in second with 12%, selling Bold, Pop, and Ace. The rest of
the market is shared by Arisco (3.5%), Sanbra (2.2%) and all the others (3.7%). The
overwhelming OMO leadership has endured some competition in the past, but most of the
products simply disappeared while others only were able to get some modest space on the
supermarket shelves.

Intent on changing this equation Procter and Gamble is gambling heavily that it can
compete with Unilever in Brazil and in the neighborhood. (Unilever has over 500
subsidiaries in 90 countries and is one of Europe’s largest multinationals selling more
than Sony, Nestle, Coca-Cola and also outselling its main competitor American Procter
& Gamble.) To be able to do this the Yankee company has launched Ariel simultaneously
in Brazil, Argentina, and Chile.

Ariel is already the soap leader in all of Latin America with 35% of the sales in the
area. This offensive has renewed Gessy Lever’s determination to remain the top-seller in
Brazil and the company is increasing its already significant marketing expenses to
guarantee that this happens. Procter & Gamble says it will be spending $120 million
dollars in marketing to guarantee the success of its product. Five million free samples of
the product have already been distributed.

Will the American company succeed? They seem to be ready to spend on marketing at least
as much as the competition. They have an annual budget of $30 million for this purpose. In
an interview with economy magazine Exame, Antônio Kriegel, Gessy Lever’s
detergents director, talked about the mood and intentions of his company: "We intend
to make them have the biggest losses in the history of Cincinnati," in a reference to
the city in which Procter and Gamble is headquartered.

Things don’t bode well for 150-year-old P&G. Their ten-year presence in Brazil has
been a succession of gross mistakes. It has changed chairmen four times in one decade.
They were not able to buy Anakol, which produces Kolynos, the toothpaste leader in Brazil
and on the other hand bought Phebo, an upscale but obsolete toilet soap. They also tried
unsuccessfully to sell a diaper that was too sophisticated and expensive for the Brazilian


They don’t make deals like that, not in Brazil anyway. The largest beer maker in the
country gobbled up the second place creating in the process the third largest beer company
in the world in a $4.5 billion deal, the biggest ever in the country. Together they will
have 71.6% of the Brazilian beer market, which has provoked shouts of "monopoly"
from the public, but mainly from the smaller competitors that have names like Schincariol
and Kaiser.

Welcome to globalization Brazilian style. Due to the passion these beers arouse in
consumers, the recent announcement that Brahma and Antarctica would share the same board
of directors under the name Ambev (American Beverages) led some to compare the acquisition
to their favorite soccer team being bought by its main adversary. Both companies are
centenary institutions. While Companhia Antarctica Paulista was founded in 1885, by a
group of friends from São Paulo, Companhia Cervejaria Brahma was created three years
later in Rio by Swiss Joseph Villiger.

Brahma employs 9,700 people, produces 4.3 billion liters of beer yearly, has 28
factories and had $42.2 million of profit in the first quarter of 1999. On the other hand,
Antarctica has 6,800 workers, makes 2.1 billion liters of beer a year, has 22 factories
and had a profit of $9.95 million in the first quarter. Brahma is already the world’s 8th
largest beer maker and Antarctica the 15th. Combined they will lose in size only to
American Anheuser-Bush and Holland’s Heineken.

For decades, Brazilians willing to drink a beer had to answer the question:
"Antarctica or Brahma?" More recently the choices increased, but both continued
to be overwhelmingly the favorites. Brahma and Antarctica have been engaged in an ad war
since the beginning of the century. That fight got louder in the ’50s and nastier in
recent years. Many celebrities were used to sing the virtues of both sides.

When Brahma launched it Malzbier in 1914 the beverage was presented as "especially
recommended to nursing moms." Antarctica started to sell its Guaraná soft drink in
1921, something that was copied by Brahma six years later.

This decade the dispute between Washington Olivetto’s W/Brasil ad agency, which had the
Antarctica account, and Eduardo Fischer’s Fischer, Justus, on the Brahma side made school.
The war was never so heated as during the 1994 soccer World Cup in the U.S. when the
stadiums were invaded by fans of both beers. Brahma was presented as "Number 1"
while Antarctica was "The National Preference." Another rivalry had to do with
Carnaval. Brahma has been sponsoring the Carnaval in Rio while Antarctica chose the
Salvador (state of Bahia) one.


Curiously, the idea to merge the companies came from a man who drinks only mineral
water, abstaining completely from beer or soft drink. He is 59-year-old Jorge Paulo
Lemann, the chairman of Brahma. Lemann was naturally looking overseas. The international
vocation of the new company can be seen in the fact that it was born with three names to
fit diverse markets. It will be called Companhia de Bebidas das Américas, in Brazil;
Compañía de Bebidas de las Américas in Latin America and American Beverage Company in
the United States and the rest of the world.

Brahma had everything going for it. After introducing streamlined and modern concepts
of management it had a 30% increase in profits in 1998 while Antarctica suffered a 20%
decline. Convincing Antarctica to accept the merger was not easy though. Many had tried
unsuccessfully in the past, including American Anheuser-Busch whose best deal was to
secure a partnership with the beer company—this arrangement will end now—mainly
due to what was seen as arrogance by the Yankees.

Brazilians are not big beer guzzlers. While Germans drink 140 liters of beer per capita
a year, and Americans consume 80 liters, Brazilians survive with 50 liters. On another
front Brahma and Antarctica are also soft drink producers, each one producing 1.2 millions
liters of soda a year. Combined they represent 14.6% of the soft drink market, which is
still no serious competition for Coca Cola (46.5%). Pepsi has miserly 4.8% share.

The merger will not happen before the Cade (Conselho Administrativo de Defesa
Econômica—Administrative Counsel of Economic Defense) studies the case—it has
120 days to do this—but nobody believes there will be a veto, since President Cardoso
has already hailed the merger and encouraged other similar deals. He also will be the one
to sign the final authorization.

World’s Top Ten Beer
Producers in 1998

Production in millions of hectoliters

Anheuser-Busch (US) 121.3
Heineken (Holland) 79.1
AmBev (Brazil) 64.0
Miller (US) 52.9
SAB (South Africa) 43.0
Interbrew (Belgium) 36.8
Carlsberg (Denmark) 33.7
Grupo Modelo (Mexico) 30.0
Kirin (Japan) 29.2
Foster’s (Australia) 28.7



Earnings: $5.73 billion

Actives: $4.5 billion

Employees: 17 mil

Factories: 50

Production in liters: 8.9 billion

Beer and chopp (as draft beer is called in Brazil) has inspired
some of Brazil’s greatest composers, who not only imbibed the potion as well as sang about
it. While Paulista (from São Paulo) composer Adoniran Barbosa only drank Antarctica, some
icons of bossa nova like Tom Jobim, Vinicius de Moraes, and João Gilberto were
Brahma guys. Caetano Veloso and Chico Buarque de Hollanda even wrote a famous ditty in
which they celebrate the Brazilian way of life and Brahma:

Vai Levando

Caetano Veloso and
Chico Buarque

Mesmo com toda fama
Com toda Brahma
Com toda cama
Com toda lama
A gente vai levando
A gente vai levando
A gente vai levando essa chama

Mesmo com todo emblema
Todo problema
Todo sistema
Todo Ipanema
A gente vai levando
A gente vai levando
A gente vai levando essa gema

Mesmo com nada feito
Com a sala escura
Com um nó no peito
Com a cara dura
Não tem mais jeito
A gente não tem cura

Mesmo com toda via
Com todo dia
Com todo ia
Quando não ia
A gente vai levando
A gente vai levando
Vai levando
Vai levando essa guia

Keep on going

Even with all the fame
With all the Brahma
With all the bed
With all the mud
We keep on going
We keep on going
We keep on taking this flame

Even with all the emblem
All the problem
All the system
All Ipanema
We keep on going
We keep on going
We keep on taking the gem

Even with nothing done
With the room dark
With a knot in the chest
With a straight face
There is no way
We have no cure

Even with all the road
With the whole day
With all the going
When not going
We keep on going
We keep on going
Keep on taking
Keep on taking this way

The merger has made some people recall with nostalgia a phrase attributed to Vicente
Matheus, the late president of the Corinthians soccer club: "We would like to thank
Antarctica for having sent us these little Brahmas." The same phrase wouldn’t be
funny at all today, just a portrait of a new reality.


A Proud

It was in Cuernavaca, Mexico, the same city that became famous in the beginning of the
20th century for being the center of Emiliano Zapata’s uprising for agrarian reform, where
Brazilian leftist revolutionary and House Representative Francisco Julião chose to live
and ended up dying on July 10, 1999 from a heart attack at age 84 while in the kitchen
preparing spaghetti—his favorite dish—for a friend. Accused of subversion, the
lawyer and leader of the Peasant Leagues—together with Pernambuco governor Miguel
Arraes—was jailed, stripped of his political rights and forced into exile after the
1964 military coup.

He used to defend agrarian reform forcefully arguing that it had to be done "by
law or by force." Julião went into exile to Mexico City and stayed there until 1979
when he was amnestied by the military regime. Back to Pernambuco he once again tried
unsuccessfully to be elected a representative. His old friends from the left abandoned him
and Julião, disappointed, in 1987, once again headed to Mexico.

The Peasant Leagues originated in the little town of Vitória de Santo Antão in the
interior of Pernambuco state in 1954. Peasant José Ortêncio, who with 140 other families
leased the Engenho Galiléia farm, created with his colleagues the SAPP (Sociedade
Agrícola de Plantadores e Pecuaristas de Pernambuco—Agricultural Society of Planters
and Cattle Raisers of Pernambuco). Harassed and roughed up by the police they looked for
help among their House Representatives. Francisco Julião from the PSB (Partido Socialista
Brasileiro—Brazilian Socialist Party) offered his support. He had been elected to the
post of deputado federal (House Representative) first in 1950.

The press started calling the new organization led by Julião Peasant League since it
looked like a similar movement from the ’50s, which had that name. Their main demand in
the beginning was merely that peasants got minimum wage and that women were paid the same
as men. By 1962 the movement had spread to 13 states under the leadership of Julião. The
next year they created the Conferência das Ligas Camponesas do Brasil and had planned a
national congress for 1964, but then the military took over in April and the leagues
became extinct.

At the time, despite laws on the books assuring their rights to wages, peasants were
"hired" through a method called "regime de cambão", in which
the landowner acquired the worker for a low price in an auction similar to those used to
sell black slaves in the past. The hired hand was then forced to work just for food during
ten days.

Julião was writing his memories and kept on writing them until the day before his
death. The first volume, which tells how the Peasant League started, is finished and
should be published at the end of the year. He had moved to Cuernavaca three years ago
where he lived with his Mexican wife Marta, whom he had met soon after going into exile.
Both were divorced and had children from their previous marriages. He, six; she, ten.

500 Years

Tourism minister Rafael Greca, cried when he heard the country duo Chitãozinho &
Xororó singing "500 Anos" (500 Years) on the phone. He had asked the successful
singer-composers in March to write the official hymn for the celebration of the 500 years
of the discovery of Brazil, which will be celebrated in the year 2000. And they were
giving him a first taste of the completed work.

Paulo Debétio and Paulinho Rezende wrote the lyrics for "500 Years." The
song talks about the wanderings of a cowboy throughout the country’s history starting with
the arrival of Portuguese Pedro Álvares Cabral to the state of Bahia in 1500 up to the
Independence of Brazil in 1822.

The news about the moved minister brought plenty of attention to the tune, most of it,
however, negative. Other composers complained about the way the choice was made without
using a competition or a commission of notables to pick the winner.

Rio Assemblyman Chico Alencar, who also teaches history and is one of the co-writers of
the upcoming multivolume book A Redescoberta do Brasil (Brazil’s Rediscovery), criticized
what he called the "official and jingoistic" tone of the composition. Talking to
Rio’s daily O Globo, Tom Jobim’s partner, Paulo César Pinheiro, didn’t think it was
important to get an official song: "From Pixinguinha up to now we have excellent
compositions that can be used for the date. I cite for example "Aquarela do
Brasil" ("Brazil"), Ari Barroso’s masterpiece. Anyway, a competition would
have been the best way."

Chitãozinho & Xororó credited the criticism to jealousy from composers who are
not as popular as they are and to prejudice against the sertaneja genre of music
that they do. "Everyone has his own space," they said. "If the minister
invited us it was because he likes our work. This is our merit, something we conquered
throughout our career."

500 Anos

O meu país é uma arena
Onde eu bebo água fresca
Nas cacimbas do sertão
Sou berranteiro andarilho,
sou matreiro
Sou peão, sou boiadeiro
na poeira desse chão
E lá se vão 500 anos de galope
Não duvide que eu tope
Contar tudo que eu já vi
No meu cavalo por esse
Brasil afora
Eu passeio pela história
Do Oiapoque ao Chuí
Eu vi chegando caravelas
do futuro
Lá no meu Porto Seguro
Quando o sol trazia luz
Vi bandeirantes atrás
de ouro e diamante
Nos lugares mais distantes
Da terra de Santa Cruz
Andei nos pampas
Vi a Guerra dos Farrapos
E por um triz eu não escapo
No meu ligeiro alazão
Vi Tiradentes, vi Antônio
Lampião, índio guerreiro
Padre Cícero Romão
Eu vi Zumbi, nego arisco
dos Palmares
Feito uma oração
De um cavaleiro, escutei
um grito forte
De independência ou morte
À beira de um riachão
Eu sou o tempo
Fui eu que mudou
os ventos
Mas já são outros 500
E eu vou cantar noutra canção

500 Years

My country is a
giant arena
Where I drink fresh water
In the backlands’ cisterns
I am a boisterous wanderer,
I am cagey
I am peon, I am cowboy
in the soil’s dust
There we have 500 years of gallop
Don’t you doubt that I dare
Telling all I have seen
On my horse
throughout Brazil
I walk through history
From Oiapoque to Chuí
I saw caravelles from the
future arriving
There in my Porto Seguro
When the sun brought light
I saw fortune soldiers looking
for gold and diamond
In faraway places
Of the Holy Cross land
I walked on the pampas
I saw the Ragtag War
And I barely escaped
On my swift sorrel
I saw Tiradentes, I saw Antônio
Lampião, warring Indian
Father Cícero Romão
I saw Zumbi, elusive black
from Palmares
As a prayer
From a knight, I heard
a mighty shout
Of independence or death
On the banks of a brook
I am the time
I am the one who changed
the winds
But this is another story
And I will sing it in another song


How much would it cost to eradicate poverty in Brazil? The government was curious to
know and a little more than a year ago ordered a study from a consortium of private
companies and universities led by the firms Bozz, Allen & Hamilton, Bechtel
International, and ABN Amro Bank. The preliminary findings are coming in and according to
the surveyors the price tag to wipe out poverty is equivalent to the Brazilian GDP: $800
billion, to be laid out in eight years. Experts from the Budget and Management Ministry
have already added, however, that the Brazilian social debt is inestimable. The study also
proposes the development (at a cost of $165 billion) of 350 regional projects. But the
federal government would cover only 18% of their costs, with the rest coming from states,
municipalities and the private sector.

According to the Cardoso administration’s Pluriannual Plan, which covers the 2000-2003
period and is being presented in August to Congress, the government intends to spend 12.5%
of the GDP in the social area, what would represent roughly $100 billion. The government
has established some goals for the next few years including the end of illiteracy by 2003.
While on average children in Brazil stay five years in school this should increase to
eight years by the year 2007.

At the same time Brazil has been in the middle of a debate around an idea by the
president of the Senate Antônio Carlos Magalhães to create a tax to fight poverty.
President Fernando Henrique Cardoso himself joined the battle saying that the idea is
impractical and that he had presented a similar project to tax large fortunes 10 years ago
when he was a senator. To the scorn voiced by Luiz Inácio Lula da Silva, PT’s (Partido
dos Trabalhadores—Workers’ Party) honor president, who called the senator’s proposal
a "marketing ploy", Magalhães responded: "He lives off peoples’ misery and
poverty. I want to eradicate all this."

According to the Prodasen (Centro de Informática e Processamento de Dados do Senado
Federal—Information and Data Processing Center of the Federal Senate) there are at
least 12 bills dealing with the subject being studied at the moment, some for as long as
10 years.

Down But Up

In another front of poverty, changes in the methodology used by the UN have downgraded
Brazil’s position in the world’s rank of development despite the fact that all the
economic and social indexes have improved since 1995 when the previous report was
conducted. The just-released index, which classifies countries according to their GDP,
education and health, removed Brazil from the company of the developed nations where it
was placed last year. Brazil now belongs to the second of the three groups in which the
174 countries analyzed are divided. Based on data from 1997, the country comes in 79th
place with a 0.739 HDI (Human Development Index), placing it between Saudi Arabia and
Peru. The country is now considered to have medium human development. Brazil occupied 62nd
place in the previous report when it had a 0.809 HDI.

From 1995 to 1997 the per capita income adjusted for ability to buy in Brazil has
increased from $5,928 to $6,480. During the same period life expectation grew from 66.6
years to 66.9 and the literacy rate increased from 83.3% to 84%.

And, surprise, dispelling the notion that the Brazilian private sector does not invest
in social programs, a new study conducted by Ceats/USP (Centro de Estudos em
Administração do Terceiro Setor, da Universidade de São Paulo—Center of Studies in
Administration from the Third Sector of University of São Paulo) shows that 56% of the
companies doing business in the country have social and community programs. The work,
however, shows also there is plenty of room for more to be done since 43% of the firms
confessed to doing nothing in the social area.

While 61% of the multinationals invest in social work, and 56% of the private domestic
companies to the same, only 42% of the public concerns reserved any money for social
efforts. Children’s’ issues are the favorite area in which these resources are used. The
Ceats/USP study reveals that 40.29% of all the projects deal with education. In second
place comes health, consuming 26.01% of the resources.

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