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Posted by BradyNet ( Thursday, February 19, '04 )

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GLOBAL MARKET HIGHLIGHTS

World economic confidence at 10 year high, ICC/Ifo poll finds 02-19-04 (Yahoo) Global economic confidence is at a ten year high, according to the results of a survey by the Paris-based International Chamber of Commerce (news - web sites) (ICC) and the Munich-based economic research institute Ifo released here Wednesday by the ICC.

US dollar stumbles to fresh lows 02-19-04 (BBC) The US dollar revived in late New York trading after dropping to a new record low against the euro and also slipping against other world currencies.

White House Backs Off Job-Growth Forecast 02-19-04 (Yahoo) The White House backed away Wednesday from its own prediction that the economy will add 2.6 million new jobs before the end of this year,

Housing Starts Fall 7.9 Pct. in January 02-19-04 (Yahoo) U.S. housing starts fell more sharply than expected in January to the lowest level since August in a sign the housing boom may finally be losing steam, a government report showed on Wednesday.

Growing economy sparks takeover mania 02-18-04 (Yahoo) With huge corporate takeovers back in the headlines, investors are pondering a question not asked since the heady days of early 2000:

US closes gap for cheap business set-up 02-18-04 (Yahoo) The US is closing the gap with other industrialised countries as a cheap place to set up a new business, according to a study by accountants at KPMG.

Foreign investors show confidence in US assets 02-18-04 (Yahoo) Foreign investors gave a vote of confidence in US assets markets last year by increasing the amount of money they invested in the US even as the dollar fell, according to capital flow data from the US Treasury.

LATIN AMERICA

US is trying to overthrow me, says Venezuelan leader 02-19-04 (Yahoo) The Venezuelan President, Hugo Chavez, yesterday angrily accused the United States of being behind a 2002 coup and of helping continuing opposition attempts to overthrow him.

Venezuela Rules Out US Oil Boycott Despite Spat With Bush 02-19-04 (Yahoo) Venezuela has no plans to curtail oil exports to the U.S. despite an ongoing spat with Washington over alleged U.S. interference in domestic politics, Oil Minister Rafael Ramirez said Wednesday.

AFRICA

The Making of an African Petrostate 02-19-04 (NY Times) As night fell and the bright lights of the brand-new oil field wrapped this hamlet in their golden glow, Neurmbaye Elie, a local farmer, pointed across the field before him.

OIL PRICES

Official: Iraq Considers Pipeline With Iran 02-19-04 (Yahoo) Iraqi Oil Minister Ibrahim Bahr al-Uloum said his agency is examining an Iranian proposal to build an oil pipeline in southern Iraq (news - web sites) along the Shatt-al-Arab waterway.

Newest messages appear on top.

02-20-04 carib: Concerning Debt/gdp ratios... I was reading somewhere that Argentina, with the haircutted restructuring...aims to bring the ratio to 100%! Brilliant! Before deval-default, the ratio was about half of that! Beauty of Argy-math!

02-20-04 savonarola: arle.. I don't argu with statistics either. I only take the ones that are not cookable.

I look at the budget deficit. If it doesn't fall, it means that GDP growth did not reduce the interest bill. Meaning that either dent has gone up or GDP has <not> gone up.

The rest I leave it to Schwartsman.

02-20-04 savonarola: and USTs are not bailing <monkeys> out.

02-20-04 arlequim: <The rest is Alexandre Schwartsman mathematical illusion.>;~))

Maybe, but it grew from 55,5% GDP to 58,2 (4,8%+)! But concerning statistics I am not able to discus, I just accept the officials.

02-20-04 savonarola: amateur..<Sofar.>

That is the key point. Lulinda did everything they told him to do, and is still <down under>.

May be he tries a different approach now.

02-20-04 savonarola: carib....there aredifferences... but none that justify believing that Brazil was becoming another Russia.

That was bollocks, but that was the bollocks that allowed Brazil to sissue 34 year paper at 8.5% and have 7 bn in demand.

MD Palocci should have given those dummies the whole amount.

02-20-04 Amateur: <Brazil is a sort of argi that grows 1/3 of it, pays interest on its debt, runs an equivalent budget deficit and grows its debt annually at its coupon rate>

Well Savo dont over-argue yr point. Yours is an accurate description not only of Brasil, but also of the US, France, Italy, Germany, Japan and even our beloved AAA Ecuador. Accurate is not always relevant. Brazil's attitude towards legal rights and debt management are radically different from Argentina's. Sofar.

02-20-04 savonarola: arlequim... do you believe GDP statistics?

I don't .....

How do you measure GDP....

How do you add up, steel production, railway travel, tourism, construction, haircutting, etc...

It is impossible. So they add prices paid.

Now take a guy, lend him 100 euros payabel in 10 years and he will spend them in the Corte Ingles.

GDP will tell you that GDP has grown because Corte Ingles sold more.

All mathematical gimmicks.

Brazil's debt is growing at its coupon rate. The rest is Alexandre Schwartsman mathematical illusion.

02-20-04 carib: Savo: with due respect, Argy is unique. No other country with some measure of democracy that I know of managed becoming steadily poorer (in relative terms) over almost a century... Maybe I am wrong, and Brasil too managed to become poorer (it certainly did in comparison to Asia)...but I do not think to the same extent. At least Brasil exports airplanes too...

02-20-04 savonarola: leo...argi is crap.......

Brazil is .......crap too.

02-20-04 arlequim: C'mom savonarola you push hard! <Brazil is a sort of argi that grows 1/3 of it> but it does no decreases <11%>. I am not saying we are better than our neighbors but I believe there are diferences.

<its debt annually at its coupon rate> as I posted last week, the 8%+ debt was nominal, I mean not relative to GDP wich also had nominal growth!

Only repeating: I tend to agree with you but sometimes you seem misled! ;~)

02-20-04 leo: Let's put it this way:Argy is more similar to Ukraine than to Russia or Brazil.......

02-20-04 savonarola: <Monkeys> bidding up Brazil again desperatly trying to protect their positions.

02-20-04 savonarola: leeeeeeeeeeeeeeeeooooooooooooooo!!!!!!!!!!

Do you compare Brazil with Russia????????

and Ukriane with argi??????????

in which world do you live?

Brazil becoming Russia was the 2003 <mantra> of the <monkeys>. Brazil borrows and Russia doesn't. It like comparing water and oil.

02-20-04 leo: Savo I desagree...comparing ARGY with Brazil is like comparing Russia with Ukraine....imho.

02-20-04 savonarola: On comparative terms..Brazil is a sort of argi that grows 1/3 of it, pays interest on its debt, runs an equivalent budget deficit and grows its debt annually at its coupon rate.

I think that summarises it fairly.

02-20-04 savonarola: danni... we wish BACEN a lot of luck in their endevours.

02-20-04 danni: <Feb. 20 (Bloomberg) -- Brazil's economy grew an estimated 2.5 percent in the fourth quarter from the third quarter as the central bank eases monetary policy to set the country on course for growth, the central bank said>......SAVO Brasil is the same <yesterday, today and forever>!

02-20-04 savonarola: <I>Bovespa ..another 3.9% <down>

02-20-04 savonarola: opti.. apart from Cs and 40s.. the rest show very wide spreads.

02-20-04 savonarola: arlequim....<Incluindo a hip�tese de envolvimento do Ministro da Fazenda, Ant�nio Palocci, com o caso Celso Daniel.">

Medical Doctor devenu economist Mr Palocci is also on the taking?

But wasn't Lulinda all about honesty and transparency?

Brasil is the same <yesterday, today and forever>!

02-20-04 optimist: C bond tight mkt.. first time in a day - 92.4375/.625

Can anyone help with realistic Brz 27 market??

02-20-04 arlequim: Sorry for the language...

"Informe Econ�mico

CARLA FALC�O (Interina)
Se houver amanh�

O fim de semana ser� de muita tens�o para o presidente Lula e sua equipe. Corriam ontem os principais gabinetes do Executivo as mat�rias que tr�s revistas semanais publicar�o neste fim de semana. Quem viu o material garante que se trata de um verdadeiro arsenal de acusa��es contra o governo petista. De envolvimento com donos de bingos na Regi�o Sul a novidades sobre o esc�ndalo Waldomiro Diniz.

Incluindo a hip�tese de envolvimento do Ministro da Fazenda, Ant�nio Palocci, com o caso Celso Daniel."

... is that plunge linked?

02-20-04 savonarola: arlequim..

we are witnessing the 21st buying opportunity in 21 days!

02-20-04 arlequim: G'Day...

...lower lows in Brasil savonarola!

02-20-04 savonarola: <Monkeys> are making extreme efforts to contain the market from collapsing.

They are now between a rock and a hard place. Their bankers told their clients how fantastic brazil has become. And their clients bought new Brazil bonds at 8.5% YTM.

But monkeys bought too. And then continued buying to support the market.

Now the same invesotrs are coming back to liquidate their positions, so <monkeys> have to give a bid. If they don't and let prices fall their own positions will be marked to market at a substantial lose.

They should once and for all accept the fact that they were wrong, liquidate, and start from a lower level.

Brazil hasn't changed.

02-20-04 optimist: Brasil looks vvvery weak.. I ve put some order for Brz 27 for small amount at 94.875...

02-20-04 savonarola: APAGON...<Cash King close to being overthrown?>

To buy brazil?

Certainly not.

02-20-04 Glutt: Compadrito, instead of inspecting Danni's cash you would better switch to usual topic: Fidelkissas and Pinky together or HIV poisons sharks trained by Fidel to bite American surfers and swimmers across the East Coast. At last you would better go shower some girls with stones� yeap?

02-20-04 danni: savonarola: danni...changing as we speak.. now 102 offer......just got back savo...

02-20-04 Cheetah: so nice to see the cheetah wannabees around again...

thanks to BRADYNET NOT ALLOWING US TO MODIFY PASSWORDS...

mau...mau

02-20-04 apagonazo: <savonarola: danni....Bra 40 offered at 100.75.. there you are. It looks too much even for a Brazialian bear like me> Is Cash King close to being overthrown?

02-20-04 Cheetah: " optimist: Danni: i think you can get now your brz40 at 102.. mb even lower.. But it.. is it worth its money?"

opti of course it's orth the good cash (or margin)...remember for danni cash is a COST and it burns away...

just can't figure out why melting away invested in EMB doesn't qualify as a cost for his cash (or margin)...

02-20-04 apagonazo: Posted to coloresfiles info on new Veni issuance

02-20-04 Glutt: savo, would you buy BR then? curious

02-20-04 savonarola: danni...changing as we speak.. now 102 offer.

02-20-04 savonarola: danni....Bra 40 offered at 100.75.. there you are.

It looks too much even for a Brazialian bear like me.

02-20-04 wally: <Brazil's Currency Declines to Six-Month Low Against U.S. Dollar Feb. 20 (Bloomberg) -- Brazil's real fell to a six-month low against the U.S. currency in early trading in Sao Paulo.

The real fell 1.2 percent to 3.0000 per dollar at 7:44 a.m. New York time, boosting its decline in 30 days to 5.4 percent, the worst performance against the dollar among the 16 most-traded currencies.

Earlier it fell as much as 1.3 percent to 3.0035 per dollar, its lowest level since Aug. 21, when it traded at 3.0100 per dollar.

The April Bovespa Stock Index future contract fell 760, or 3.4 percent, to 20,430 on Sao Paulo's BM&F commodities and futures exchange.

Brazil's benchmark bond maturing in 2040 fell 2.80 cents on the dollar to 100.00, boosting the yield to 11.00 percent, according to J.P. Morgan Chase & Co.<<<>>>>

02-20-04 Glutt: btw, running deficits is usual business for governments and it does not mean automatic default per se, what is important however is financing those deficits where problems can emerge. So our question boils down to the ability of government to refinance residual gaps at affordable costs or ability to balance in case of absent financing. To that end there may be debt creating financing and non-debt creating financing of deficits or there may be expenditure cuts or revenue increase that help to stay afloat. Governments usually default not because they run deficits but because they do not find enough means to refinance these deficits. I hope this is so obvious that Pele would not argue much about it.

02-20-04 Glutt: <Brasil has fiscal deficit? Go back to basics! > pele, are you telling us that in <brazilian math> 2+2 does not equal 4 ??? otherwise I am afraid you should study a bit, probably read a book or two on the subject. Fiscal balance is usually split to that which excludes interest payments and that one which includes them. Conventionally the first is called primary fiscal balance and it shows difference between fiscal revenues and non-interest expenditure. The second is called fiscal balance which is a broader thing because it results from difference between total revenue minus non-interest and minus interest expense. If a government runs primary surplus but finds itself in a deficit after paying interest on its obligations then it means overall deficit which has to be financed either with borrowed money or money from other sources like privatizations for instance. Although per international definition privatization proceeds are off balance sheet item in case of government budget. Another case is when after making all its expenses government arrives to zero balance which means it lives to own means and does not have to borrow for refinancing purposes. I do not mention redemption bill which does not directly enter budget accounts as an expense though. All in all Brazil continues to run around 3-4% GDP deficit on its fiscal account after paying off interest expense which means Brazil has to borrow or shrink expense. As Brazil is not rich and is not low tax country the potential for doing this is rather limited and Brazil always prefer to refinance with the market than consider balancing fiscal side. So much for fiscal topic amigo Pele

02-20-04 danni: OPTI i dont know but i think i got it , i give my order in the morning & in israel the bank are close so i will know on monday but on the look of it was not worth it

02-20-04 Glutt: <i know but wifey dont care for my trades :~~)))> yeap... women are more like this but this is good thing about them, imagine if your wife would be daily demanding your account statements :--)))

02-20-04 optimist: Danni: i think you can get now your brz40 at 102.. mb even lower.. But it.. is it worth its money? (C bond below 93 offered)

02-20-04 Pelegrino-spo: <Brazil has a fiscal deficit because it pays.> Hahahahhahhahah!!! Brasil has fiscal deficit? Go back to basics!

02-20-04 Pelegrino-spo: <These two countries are one and the same. A marriage made in hell. Thinking that Brazil does well when argie doesn't or viceversa is just dreaming.> Hahahahahaahahahhah!!! Seems like u didnt learn the lesson! But this time u will!

02-20-04 danni: glutt: be worried about your trades this is you and your wife. :--))).....i know but wifey dont care for my trades :~~)))

02-20-04 danni: wally: Bra40 <102.000 102.750> ......i need it 102 ask but i see the market up

02-20-04 Amateur: Galicia: For those interested in the reason why Gal wants 95% even though an APE might make the swap binding for 100% with a 66% majority, today's Cronista reports that the APE viability is questioned also because banks cannot resort to APEs or other bankruptcy procedures. The point is arguable, but the fact is that there is no precedent of a bank ever succeeding to reach a bk deal.

So the 95% is necessary for financial reasons, as Gal management reasonably anticipates that holdouts wont likely be bound by the exchange termr and would be free to sue for full payment.

02-20-04 wally: Bra40 <102.000 102.750>

02-20-04 optimist: sorry for repetitive inputs, but C bond is dropping like a stone.. 92.75-93.125 the makret is..

02-20-04 optimist: Danni: amigo, there's hardly anything more dangerous in this business than counting costs on purchased instruments, taking into account the profit that has been taken ;)) sorry for narration, but it miguides, imo;)

02-20-04 savonarola: Good news on the Galicia restructuring.

Of the US$ 1 bn of bank debt to be exchanged, 692 million have tendered their loans.

Of the $ 350 million of bonds to be exchanged, 262 million have tendered their bonds.

That makes a 70.6% overall, already above the APE 66.7% limit, but still below the 95% that the bank wants to reach.

They have extended the offer for one month until March 17th.

02-20-04 Glutt: Mon, good decision

Danni, no problem, if anyone should be worried about your trades this is you and your wife. :--)))

02-20-04 optimist: C bond 93.125-93.5.. nearly 10! points lost in 2 weeks!

02-20-04 Mon: < Glutt: Mon, then you should reward your 4 year old ....> These kids nowadays... actually, it was an accident but he is computer literate. I think its time to give my kids this computer and buy myself a new one : )

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