 |
Emerging Markets |
Posted by
BradyNet
(
Friday, October 3, '03
)
| |
|
|
*NEW*
Stay on top of important market events with the IdeaGlobal/BradyNet Economic Calendar
|
 | How to Hamstring a Hyperpower 10-03-03 (Yahoo) THE AMERICAN ECONOMY seems bedeviled by twin towers. The terrorist destruction of the World Trade Center has left a residue of homeland security costs that will be a drag on the economy for years to come.
|
| The painful reality the IMF ignores 10-03-03 (Yahoo) The fund has again failed in its most urgent task - to reform itself
|
| Household incomes and 2004 10-03-03 (Yahoo) The Census Bureau reported on Friday that the inflation-adjusted median household income declined for the third consecutive year, while the nation's poverty rate increased for the second year in a row.
|
| Jobless, Factory Data Show Wobbly Economy 10-03-03 (Yahoo) WASHINGTON (Reuters) - The number of Americans lining up to claim jobless benefits rose in the latest week, while manufacturers' new orders fell sharply in August, the government said on Thursday in reports showing a wobbly economic recovery.
|
| Global Economy: Europe, Japan Lift Hopes 10-02-03 (Yahoo) LONDON (Reuters) - Manufacturers in Europe and Japan won more orders and made more goods in September, according to surveys on Wednesday, going some way to offset doubts about the strength of a U.S.-led economic recovery.
|
| Students Get Early Start On Postgrad Job Search 10-02-03 (Washington Post) Paolo del Mundo said he had tuned out the noise and the competition as he stood in line at a recent University of Maryland job fair in College Park, hoping to catch the eye of the recruiter from a technology firm.
|
| Jobless Claims Are Highest in 2 Weeks 10-02-03 (Yahoo) WASHINGTON - New claims for unemployment insurance moved higher last week as laid-off workers who had been prevented from filing because of Hurricane Isabel finally made it into state offices to apply for benefits.
|
| Brazil Economy Sees Worst Years Since 98 10-02-03 (Yahoo) SAO PAULO, Brazil - Brazil's economy will probably grow less than 1 percent this year, representing the worst performance for South America's largest country in five years, the central bank said Tuesday.
|
| Chinese Girls Toil Brings Pain, Not Riches 10-02-03 (NY Times) NSHAN, China — Each eyelash was assembled from 464 inch-long strands of human hair, delicately placed in a crisscross pattern on a thin strip of transparent glue. Completing a pair often took an hour. Even with 14-hour shifts most girls could not produce enough for a modest bonus.
|
| The curse of an oil economy 10-02-03 (Yahoo) WASHINGTON - America is jeopardizing the long-term health and stability of Iraq and, what's worse, it doesn't even know it.
|
| Iraq oil work to cost extra $1bn 10-02-03 (BBC) An extra $1bn (£603m) will be needed if Iraq's oil output is to be restored to pre-war levels by the end of next year, a senior Coalition Provisional Authority official has been reported as saying.
|
| |
Newest messages appear on top.
10-02-03
Advice55:
seems like petrobras found a lot of oil again... Brazil will be autosuficient in oil very soon......
10-02-03
Advice55:
Opti, in relation to USTreasuries I think this link that Fox found looks better, did you see it?http://www.bonds-online.com/asp/new...
10-02-03
carib:
Savo: I guess nobody wrote that low interest rates mean necessarily high growth rate: in Japan the rate is 0 and the growth close to 0 too. In China rates are higher, and growth is close to 10%.
Point is, given the size of Brazil debt, high interest rates are a killer, because the debt snowballs, and taxes go up to produce a primary surplus, which is negative for growth.
In mid 2002 Brasil was close to an irreversible crisis, mostly because of political uncertainty. This generated a year of high rates, and debt growth. Now a virtuous circle is possible, under certain conditions. We shall see if it materialises.
Concerning Guano, IMHO the issue is twofolds: 1) dollarization did not eliminate inflation, which makes guano-products less competitive. 2) Increased oil production implies more foreign investment, that up to now can be seen in the OCP, but not yet in the next leg...about which Lucio recently gave optimistic forecasts speaking in New York. Again: let us see if it materializes in time, as reason would suggest.
10-02-03
wally:
<PILLZ: Going to a white night party in BRX ( Saint-Louis ) see you demain>is perhaps <Peterson> throwing the party with the motto "white with envy"? :~)))
10-02-03
wally:
<savo> i think for most of the colores (including me) it is not the question presently whether Brazil will "make it" but worth an investment based on weighing risk/reward ratio which under prevailing circumstances is very interesting.
10-02-03
savonarola:
carib...your Guano posting is another proof of the argument I am trying to present. That low rates today are no guarantee of growth. Active rates in Guano are something like 12% domestically. There is still some inflation so real rates are below that. Yet Guano is not growing.... because the world is not growing. Economies are inter-linked. Thinking that lower rates in Brazil will do the magic that they are unable to do in the rest of the world is in my opinion overoptimistic.
10-02-03
savonarola:
gaucho...<that current returns are worth the risk >should read ...that current returns are <not> worth the risk ...
10-02-03
savonarola:
Gaucho... to prove that I don't disagree with the chance the Brazil manages to turn the boat around is that I still have 25% of the exposure I had at its pick of 2002. I just think that current returns are worth the risk that Brazil fails ones again as it has done cyclically every two or three years over the last 15.Contrary to a lot of people, I can live without having any exposure in Brazil. I had no Brazil from mid 95 to last year.
Regarding hypothesis I don not have any. My way of investing is not by trying to construct models. I simply, and stress <simply>, try to find
a) bonds that monkeys have sold due to risk management and mark to market constraints, and
b) restructuring plays, ie bonds that investors have sold due to panic, preferably performing bonds, but ocassionaly non performing ones.
a) and b) are obviously linked.
All I try to do is to find bonds whose price reflect an almost certain default, that I don not believe are going to default. I have my share of mistakes by the way.
I understand that some Colores feel that this time Brazil will make it. All I say to that is that in my opinion, Brazil is not even close yet <to have finished not making it>. It is still a long way off from <starting to make it> to be sure that <it will make it>.
10-02-03
carib:
One could now argue that in case Guano GDP stops growing, and real interest rates (in guanovia, that means in dollars) remain high, guano would default with a primary surplus of 4,25% of GDP....The concern is temperated by the fact that interest rates on most of guano public debt are not that high, but aggravated by the fact that Guano would have to pay rates higher than Lula, in case they wanted to issue more bonds.
New private investments in the oil sector appear to be the key. IMHO.
10-02-03
carib:
Oct. 2 (Bloomberg) -- Ecuador's economy shrank for a second consecutive quarter, contracting 0.5 percent from the same period a year earlier, led by declines in production of oil, fish and agricultural goods, the central bank said. Gross domestic product fell 0.8 percent from the second quarter and dropped a revised of 0.1 percent from the first three months of the year, the bank said in its quarterly report. Oil output tumbled 10 percent, fishing declined 4.l percent and agriculture sagged 2.7 percent from a year earlier.
``This really is a disappointing result and confirms fears that the economy isn't performing very well,'' said Maria de la Paz Vela, an economic analyst at the Quito-based consultancy Multiplica. ``The growth target of 2.5 percent for the year seems increasingly unrealistic. What is going to be key is boosting oil production in the second half of this year and in 2004.''
10-02-03
Gaucho1:
<I have no theory... I am only pointing out the fact that all the talking about Brazil having a 4.25% primary surplus is a bit ludicrous given that it only pays a bit more than one third of the interest bill, making Brazil's situation worse than that of Germany or France.>Savo: rahter than <theory>, it might be more interesting to debate <hypotheses>.
The 4.25% primary surplus is the amount required to reduce debt/GDP, over time, provided certain hypotheses, the two major ones being real interest rates of 10% and GDP growth of 3%.
This year, real interest rates and growth, at about 20% and zero respectively, have fallen far short of the above hypotheses. As a result, debt rose some 4% of GDP.
From your postings, I gather your most likely future scenario is an extrapolation of current conditions, with similar growth rates and similar real interest rates going into the future. If such a scenario turns out true, debt/GDP will grow explosively and 4.25% is, indeed, <ludicrous>.
In other words, if you think this year was the rule and not the exception, you should definitely be sceptical of a <virtuous cycle>.
If, however, you believe that the conditions shaping 2003 were largely circumstantial, and are unlikely to be repeated in the future; if you believe future growth will not be zero, and real interest rates will not remain at 20%-- then the 4.25% might not be so <ludicrous>. 4.25% might just be enough to make debt/GDP fall.
If risk perception is affected more by the rate of change of debt/GDP than the actual level of debt/GDP (which I assume to be the case, provided the level of debt stays lower than a certain threshold), then a fall in debt/GDP could indeed trigger a virtuous cycle.
So may I suggest we state our hypotheses, and the rationale behind them.
10-02-03
SPAL:
< But when someone introduces a good idea, thanking does not hurt. > no of course not - I will have to get to a Fiji one of these days or alternatively let me know if you are passing through Miami ...
10-02-03
PILLZ:
Going to a white night party in BRX ( Saint-Louis ) see you demain...
the ploblem is I must find white clothes, if not I can't enter..
10-02-03
carib:
The day Mendoza pays back her bond in full, for instance, we should hold a <Nautilus tanksgiving party>...underwater, maybe...
10-02-03
carib:
SPAL: the whole idea is exactly.... freely exchanging ideas, no doubt.
But when someone introduces a good idea, thanking does not hurt.
A good party can not hurt either, I guess, if the company is good.
10-02-03
SPAL:
< 10-02-03 carib: SPAL: where and when the <colores SPAL thanksgiving party>? > !! Carib I get all the fun and information I need just participating with my amigos here ... and no thanks needed ... I get more than my fair share of ideas from you guys.
10-02-03
carib:
SPAL: where and when the <colores SPAL thanksgiving party>?
10-02-03
SPAL:
< 10-02-03 Alexander: no problem, if readers do their own DD on securities mentioned here > works for me ...
10-02-03
Alexander:
no problem, if readers do their own DD on securities mentioned here
10-02-03
SPAL:
< 10-02-03 Amateur: Sold my last 1500 BLX at 12.50. It was a beautiful ride. Chapeaux, Spal. > let's find some more like this!!
10-02-03
carib:
Peterson: BLX <pigshit> gave this humble Colore a small profit of 200.000$.
I know this sounds like a miserable pittance for a very wealthy man like you. But I guess most of us will be happy with a similar deal once a week, every week. Please bear with us and, just occasionally, post reference to the last trade that netted you above 5 millions...just to keep us envious and respectful.
10-02-03
SPAL:
<10-02-03 Alexander: <<<is not yours but I know I benefit when I hear your ideas! >>>> problem is, if things go wrong, I wouldn't want ppl to lose money cause of me..... > well in my case I post also with the hope of getting criticism ... or help with timing!! Everyone has losers, but I think the average colore bats better than 50/50 ...
10-02-03
Alexander:
<<<is not yours but I know I benefit when I hear your ideas! >>>>problem is, if things go wrong, I wouldn't want ppl to lose money cause of me.....
10-02-03
SPAL:
<10-02-03 Peterson: When will ridiculous bragging about making couple dollars with pigshit stop ? This board is already known as " Where Braggarts meet when they doubled their Pocket Money ". > Peterson I have NEVER heard anything vaguely constructive, interesting or entertaining from you ... making you exactly what ...
10-02-03
SPAL:
<10-02-03 Alexander: <<<mua mua shit > more dumbshit bragging required Alex! >>>
dear friend Shpal, YOU started that bragging !!
;-)))) > Alex - it is really not meant as bragging - in some senses it is just a running tally of some investment ideas as they pan out and the price update indicate when momentum has hit the micro-market I am in ... as you know there is a major overlay of emotion when equities trade. I guess I am also just trying to share the feel of a market ... in any case you are one of the very best bare knuckle investors around ... perhaps my style of "bragging" is not yours but I know I benefit when I hear your ideas!
10-02-03
carib:
Conseco above 20 $...
10-02-03
carib:
Savo: Obviously, one cannot disagree with math...except in Ladronia, where math has recently been declared illegal.
My comment just tried to indicate that, assuming Gaucho's postings (real rates down to 6%, GDP growth up to 3%) will turn reality next year (in case they do not, blame Palocci, not Gaucho) then your point (Brasil fiscal primary surplus only covers 1/3 of interest bill) no longer applies.
Of course, all this sounds like a statement by Mr de La Palisse...
If your point is that it's impossible for brasil to grow 3% with real rates at 6%...on that I would humbly disagree. Possible, it is possible, but that does not mean it will necessarily happen.
10-02-03
Alexander:
Du sagst es
10-02-03
Peterson:
When will ridiculous bragging about making couple dollars with pigshit stop ? This board is already known as " Where Braggarts meet when they doubled their Pocket Money ".
10-02-03
savonarola:
carib...<Savo would have to revise his theory>What theory?
I have no theory... I am only pointing out the fact that all the talking about Brazil having a 4.25% primary surplus is a bit ludicrous given that it only pays a bit more than one third of the interest bill, making Brazil's situation worse than that of Germany or France.
Of course that gap would close if interest rates go down and growth rate goes up. But.. isn't that a bit obvious?
2 +2 is 4 .. what a pitty.. I needed it to be 5.... I know!.. let's do 2 + 3 !
The big issue is how Brazil can get rates down being as of now a borrowing machine, with contracting GDP and from what we can imagine, also falling tax collection. That is what we call a <vicious cycle>.
Given a stock of debt and a borrowing requirement a recesion means falling tax collection which increases and not reduces the borrowing requirement pushing rates up and not down and so on so forth.
Imagining that Brazil manages to get rates down by whatever mechanism, then comes the second problem... ignite growth. A puzzle that Japan, the US and Europe have been unable to resolve even with <negative> real interest rates. Will Brazil be able to solve it with <positive> real rates of 5 to 6% ?????
10-02-03
Amateur:
<colores SPAL thanksgiving party>. Count me in, any place in the western hemisphere. How about Brazil early December, or MarchApril in Europe?
10-02-03
Amateur:
BLX, Carib, Spal, I agree with Carib, thats why I fixed my exit point at 12.50. < one could argue that it's close to fully priced>. Earnings of the last quarter -net of recovery of bad loan provisions-, were ard 10 cents per share. Allow for some further improvement, and even 60 cents/year EPS make 12 a full value. Am I missing something, Spal?
10-02-03
carib:
Amateur: I think we have to organize a <colores SPAL thanksgiving party>...
10-02-03
Amateur:
Sold my last 1500 BLX at 12.50. It was a beautiful ride. Chapeaux, Spal.
10-02-03
PILLZ:
Carib, I would sell the shares and buy calls, so you pocket your profit and have the opportunity till March to enloy the fiesta..
10-02-03
Alexander:
<<<mua mua shit > more dumbshit bragging required Alex! >>>dear friend Shpal, YOU started that bragging !!
;-))))
10-02-03
carib:
CNO calls strike 20 now up, following the share price.
Fortunately my order was not hit before the option desk in Europe closed.
maybe now it's better to sell calls @22,5...
10-02-03
carib:
Gaucho: <real interest rates 5-6%>....deduct taxes, and it means a 3% primary surplus, with 3% growth is enough for balancing the budget...Savo would have to revise his theory...but wishes and reality do not always coincide.
10-02-03
cirun:
<schpal> could you plaease eksplain <a signal that a <refi> is in the wings> dont understand <refi>, that means refinanciation? or revaluation? Thanks, Am not an nativ english.
10-02-03
carib:
Fox: <Blx>,...I do not know. The last quarter had a very good EPS, because there one the one time off income from the liquidation of part of the Arg credit portfolio.
Now one could argue that it's close to fully priced, given the number of shares is almost doubled. in terms of <old BLX shares> the actual price is now close to 18...a long way up from the 2 and change where we bought it...
Pity we did not buy a million shares...
10-02-03
Gaucho1:
6% real interest rate sooner than market expects?<16:01 PALOCCI: REFORMAS E ESFORÇO FISCAL PODEM GARANTIR JURO REAL 5% A 6%Brasília, 2 - Após defender a votação ainda este ano da reforma tributária, o ministro da Fazenda, Antonio Palocci, afirmou que a aprovação das duas reformas - a tributária e a previdenciária - aliada ao esforço fiscal que está sendo feito pelo governo "garantirá um futuro de crescimento onde o Brasil possa ter juros reais na faixa de 5% a 6%". Ele fez tal avaliação em entrevista ao deixar o almoço com os senadores do PMDB. (James Allen)>
Index of older articles by date
*NEW* Historical archive from 1998-1999
Please read our disclaimer.
Home Page |
BradyNet Pro |
Search |
CyberExchange
Forfaiting |
Closing Prices |
Live Prices |
New Issues |
Ratings
BradyNet Tour |
BradyNet FORUMs |
BradyNet Email Directory |
Index (Site Map)
Analysis & Research |
BradyNet Center |
News |
Jobs
General Correspondence: bradynet@bradynet.com
Questions/Problems? support@bradynet.com
This site copyright © 1995-2000 BradyNet.com
