The Color of the Market

Emerging Markets

Other Forums:
What's New
Bond Discussions
Newslink

Posted by BradyNet ( Thursday, June 17, '04 )

*NEW* Stay on top of important market events with the IdeaGlobal/BradyNet Economic Calendar

GLOBAL MARKET HIGHLIGHTS

Drastic drops in gas prices not expected 06-17-04 (Yahoo) Oil and gasoline prices have likely peaked after recently hitting record highs, but they are unlikely to fall drastically, the head of the Energy Department's statistical arm said Tuesday.

Euro Area Inflation Rises to 2.5 Percent 06-17-04 (Yahoo) Inflation in the euro zone jumped to an annual rate of 2.5 percent in May from 2 percent in April, due mostly to rising costs of fuel and oil products across Europe,

Inflation a top threat to economy 06-17-04 (Yahoo) Consumer prices have risen at a 5.5 percent annual pace for the past three months, rippling from plywood to dairy section.

Consumer Prices Surge at Fastest Rate in 3 Years 06-16-04 (NY Times) rices paid by consumers in May rose at their fastest rate in more than three years, the Labor Department reported today.

Greenspan: Economy Must Deal With Threats 06-16-04 (Yahoo) Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said Tuesday the central bank must stand ready to deal with a large number of possible threats to the economy, including another terrorist attack on U.S. soil.

Survey: Companies Optimistic on 3Q Hiring 06-16-04 (Yahoo) U.S. companies expect to add jobs at a healthy pace this summer to satisfy demand for their goods and services, a new survey shows.

LATIN AMERICA

Brazils foreign policy 06-17-04 (Yahoo) Brazil is bidding for big-power status. What sort of power does it want to be?

While risky, Chavez recall shows global pressure works 06-16-04 (Yahoo) Venezuelan President Hugo Ch�vez's consent to a recall vote has stunned most observers of Latin America. Diplomats, journalists, academics, and Wall Street analysts were in nearly universal agreement that the autocratic leader would stop at nothing to prevent a referendum on his presidency.

Brazils Silva Renews Call to Fight Hunger 06-16-04 (Yahoo) Brazil's president renewed his call Tuesday for an international fund to eliminate hunger and said a tax should be placed on arms sales and international financial transactions to fund development in the Third World.

EASTERN EUROPE

ASIA

Worlds most expensive cities led by Tokyo, London 06-17-04 (Yahoo) Those three cities ranked as the most expensive in the world, according to the latest annual cost-of-living survey released Monday by Mercer Human Resource Consulting.

OIL PRICES

OPEC Pledges to Increase Oil Production 06-17-04 (Yahoo) OPEC (news - web sites) signaled it would boost oil production and said it would ask other major oil producers outside the group such as Mexico to do so as well to make up for lost crude exports from sabotaged pipelines in Iraq

Experts Fear Terror Impact on Saudi Oil 06-16-04 (Yahoo) Shopping in Saudi Arabia's bazaars is out. So is dining at Saudi restaurants. With terror attacks on the rise against foreigners in the kingdom, expatriate oil workers are taking greater precautions and venturing less often outside their fortified compounds.

Fossil fuels the futures energy 06-16-04 (Yahoo) Australia would be dependent on fossil fuels for generations, Prime Minister John Howard said yesterday as he announced fuel tax breaks for business but rejected calls for a higher renewable energy target.

Attacks halt Iraq oil exports 06-16-04 (BBC) Sabotage attacks on a southern Iraqi oil pipeline have sharply reduced oil exports, the oil minister says.

Newest messages appear on top.

06-17-04 carib: Advice: when the US had the equivalent of present day Brasil per capita GDP...public expenditure in the US was 7% of GDP (it was 1913). Today, Brasil public expenditure is 30% of GDP. My opinion is public expenditure =20% of GDP would be much better for Brasil growth. After all, they are competing with Asia...

06-17-04 eletrico: <why hurry?> Just for the sheer pleasure of doing so.

06-17-04 Fox: <"fast" is a relative matter> why hurry?

06-17-04 amigo latino: < Victor :�..these dr social organizations simply can not compete with the private sector (conep)�.>

I agree with you. The heads of social orgaqnizations do not have the ability or true interest in understanding the issues involved, and fight for the interests of the poor.

06-17-04 H.Advice: I included the name of gaucho in my last posting, but any colore can give their inputs, it is because he was the only one to ask especifically to me a quastion regarding that issue of MPC.

Regards

06-17-04 victorn: http://www.radarshop.com/home.asp

<El nuevo Quintezz XT7000 Z-2 es el hermano mayor del Quintezz Z-1 que se vende con mucho �xito en Espagna.> WHO or WHAT is Espagna? some new pasta? :-)

06-17-04 H.Advice: Gaucho, finally I got some time to write. Well let us start with the beggening.

Marginal Propensity to Consume of a country is defined as the first derivative of the consumption function of this country, in economic terms it means how mutch of any ADDITIONAL USD in GDP will be spent in consumption.

Soo, if a country has a consumption function as C(Y) = 10bi + 0,8 (Y), the MPC of this country is 0,8 or 80%.

Very good, but the MPC of any country depends on the Income distribution of that country. If a country is poor, but has a very bad income distribution, the MPC will be low, even being this country as poor as Brazil, or Argentina, or Iraq. This happens simply because, when GDP grows 1 dolar, this dolar, or 90% of that dolar, goes to the pocket of the ones that already have money and low MPC. In the end of the day, for a country to have a good, or high MPC it needs to distribute income first of all.

And why countries would like to have high MPC? Soo What is the relevance of all this MPC debate over economic policies?

The answear lies on the Keynesian Multiplier, that states that any change on economic policies (Fiscal and/or Monetary) will have a larger impact on growth as larger is the keynesian multiplier. AS the multplier is 1/1-c were c is the marginal propensity to consume, as larger the marginal propensity to consume larger the multiplier and more efficient will be the changes in any economic policy in terms of GDP growth with no inflation.

In other words, if you are dealing with a country that has a large MPC and a large multiplier, you can reduce only a little interest rates to atchive a stronger economic growth path with no inflation, compared to a country that has a smaller MPC.

This is why Brazil and Argentina, to exemplify with 2 known cases, can not atchive constant and vigorous growth paths on the medium term run, even having a lot of "potential". Bazil needs to distribute income first of all....

We can continue this debate latter, hope you enjoy this first words.

Regards

06-17-04 victorn: amigo <They need to be <<<debated amply throughtout the society>>> and therefore need some time> with all due respect, i don't think you understand in what type of country you are residing. this is the kind of thing politicians do when these social organizations are organized effectively to serve their own needs, etc. like in argy after per�n, where politicians have had no other choice to debate such issues with such organizations. but dr is not argy, and these dr social organizations simply can not compete with the private sector (conep).

06-17-04 PILLZ: Ruspan this GPS fixed radar detector is legal (it not only tell you that there is a radar, also how much max. you may drive, its a normal GPS, its updates on new the fixed radar every month..

06-17-04 ruspan: Pillz, thanks for the radar info, very interesting stuff, they only luck automatic police radar destroing unit :-)

06-17-04 PILLZ: <UNITED STATES CAN CO SR SUB NT SER B DUE 10/01/2010 12.375% INTEREST DATES APR, OCT 01 GRBS REF # 040617-B8250 04/01/01 DATED DATE >

sold it today at 90

06-17-04 PILLZ: Same in Salton, bought it 2 weeks ago at 62, sold it yesterday at 73.25 life is diff.

06-17-04 eletrico: <are you living in Belgium >No, I�m living in Brazil, and that is why both circuits are so far away.

06-17-04 PILLZ: <Pill: BTW: did you buy the JLFrench schweine? > yes, a few monthts ago, Rogue sold it today for me at 68.25

06-17-04 PILLZ: Carib, RCN I bought it at diff. prices from 18 to 30.. it was a crazy ride, now I am concentrated in Ablax, Level, Calpine , Charter, Bally and Sbarro, and will add Delta at lower prices with hedge in selling tons of calls..

06-17-04 carib: bot some <sea urchins> today...

06-17-04 carib: Pill: BTW: did you buy the JLFrench schweine?

06-17-04 carib: Pill: I must have missed your postings suggesting RCN @25.. :-((

06-17-04 PILLZ: <By the way, both circuits are far away from my home... > are you living in Belgium ?

06-17-04 PILLZ: <Victorn: because @50% profit I usually start selling...unless I am 100% sure the price will go up more. In that case however, instead of selling, I buy more... :-) NB: I have the impression master-Pill started selling RCN even lower... >

Carib, good impression, but i still hold some, but don't forget I am at +250% plofit, I think once you go up to 60, the upside potential is vely speculative..

06-17-04 eletrico: <better go to Zolder> Never have been there. I've been at a trackday at Spa, with a hired prototype, a few years ago. By the way, both circuits are far away from my home...

06-17-04 eletrico: <<bumps> who or wat it is >Stupid devices that some clueless traffic authorities plant on Brazilian roads.

06-17-04 amigo latino: <Clinton pronounces his economic plan as his greatest accomplishment of his eight years in office.

"I kept score, how many people's lives were better off," he tells Rather. "People actually had the ability to do more things than ever before.>

06-17-04 davidetre: <carib: Davide: Mendoza indications 68-70 today> Ok Thanks

06-17-04 amigo latino: <On Wednesday, Clinton told an audience of about 1,000 people at a screening of a documentary about his presidency in New York that he became an enemy of right wing America in an attack led by Whitewater prosecutor Kenneth Starr. The film was first shown Tuesday in Little Rock, Ark.

Clinton said Starr was "the instrument of a grand design." The documentary, "The Hunting of the President," portrays Clinton as the target of a political smear campaign. One of the filmmakers, Harry Thomason, is a close friend of Clinton's.

"When the Berlin wall fell, the perpetual right in America, which always needs an enemy, didn't have an enemy any more, so I had to serve as the next best thing," Clinton said. >

06-17-04 carib: Davide: Mendoza indications 68-70 today

06-17-04 PILLZ: Ruspan, this is for the fixed radar, GPS pilot detector

http://www.radarshop.com/radardetec...

06-17-04 carib: Amateur: great minds think alike :-)

06-17-04 carib: Amigo: Nautilus say: <cronista article=shit>. This observation appears to confirm Nautilus opinion. I have no opinion.

06-17-04 Amateur: Amigo, The 2007 has no guarantee, royalties or otherwise. Forget this article. As Nauti rightly pointed out, the newslady is talking b.....t, just re-cooking old clippings. <Quitar a los nuevos bonos la garant�a de regal�as que llevan los bonos actuales....> The rest of the article is probably as inaccurate as this portion.

06-17-04 amigo latino: <carib: Amigo: not that I know of...>

carib, following is from El Cronista article:

<La propuesta cobra la siguiente forma:

Estirar el vencimiento del bono entre 8 y 10 a�os, desde el 2007 al 2015-2017.

Cambiar el bono bullet (con pago �ntegro de capital al final) por uno amortizable, con pagos parciales de capital trimestrales a partir del 2006.

Reducir el cup�n de intereses original de 10%, a uno con tasas entre 5,5% y 6%.

Quitar a los nuevos bonos la garant�a de regal�as que llevan los bonos actuales....>

06-17-04 PILLZ: <bumps> who or wat it is

electrico, ofcause if you want to speed at 275, better go to Zolder, I never go more then 260 on the highway :-)

06-17-04 PILLZ: Ruspan

http://www.radarshop.com/radardetec...

Carib, now there is also transit German plates for one year and you can pronlonge it , how many years :-) the Swiss plates are good , but to sell the car you must go back to Swiss, with Germany , you can buy and sell it in Belgium :-)

06-17-04 amigo latino: <victorn: amigo, nothing beats the private sector pressuring the govt��.>

Victor, Mejia does not like CONEP because they wanted the bank thieves to be prosecuted, criticised the bailout of the 70 plus big deposits, wanted clean elections. Mejia�s reply is that the people who make the govt officials corrupt are the big businesses looking for illegal govt favors.

Business wants < aprobar la reforma fiscal y propuso ampliar la base del Impuesto sobre la Transferencia de Bienes Industrializados y Servicios (ITBIS)>: Reform is a deceptive term. It implies changing something not optimal into optimal. The reform in DR context includes reducing taxes on the business and increasing the base for imposing ITBIS, meaning charging ITBIS on food and medicines. I think that this is an inappropriate time to saddle the poor with more taxes. Many people right now cannot afford to buy medicines and many food items(ex: milk , in fact half of population cannot afford to buy even small quantities of milk). So far the reforms have been discussed solely among business people, IMF staff and some well connected well�to-do economists, and without doubt in five star hotels. They need to be debated amply throughtout the society and therefore need some time. They cannot be rushed!

06-17-04 davidetre: <Amigo, or Carib>. Please. Actual prices of Mendoza?

06-17-04 eletrico: I hate bumps AND speed limits also. That�s why I said that, to avoid trouble, it's better to enjoy trackday events.

06-17-04 carib: <color of the road>,,,, well, Eletrico, I hate bumps...but someone driving @200+ on a road where the speed limit is 50...is asking for trouble...

06-17-04 carib: Amigo: not that I know of...

06-17-04 amigo latino: Carib, does the current Mendoza bond has some kind of oil guaranty (in the prospectus)?

06-17-04 eletrico: Bumps not only damage suspensions, also they increase accidents rather than reducing the number of deaths. Just figure someone coming at 200 KM/H +, not being able to brake in time and losing control of the vehicle.

06-17-04 carib: Eletrico:
I am not sure if <bumps> decrease speeding...but I am sure they increase: 1) damage to car suspensions (and fees to car repair shops) 2) use of swearwords, of political, sexual or religious connotations... :-(

06-17-04 carib: I am not aware that the Mendoza exchange offer has been issued. first Colore who gets facts, rather than rumors, I am sure will post :-)

06-17-04 rolfkoch: carib, k1...tnx;
but this is the old prospectus not that for the exchangeoffer ?

06-17-04 ruspan: Vic: <BCN chopper pictures> Good to know it, it means we're really in ussr 70th, taking your license for 3 faults included. :-) Next step would be the country falling apart and no speed limits again :-)

06-17-04 ruspan: Carib:<Did <old USSR> have highways where one could drive 200 KM/H +?> No, and my bike would not go over 160 anyway :-) The whole thing was slower but we didn't mind, going "fast" is a relative matter :-)

06-17-04 eletrico: <bumps would be very stupid, and dangerous> Bumps are dangerous and stupid anywhere, especially on poor-illuminated roads, at night. For those confirmed petrolheads who love speeding(like myself), better go to trackday events.

06-17-04 k1: Rolf: Stuffit Expander http://www.aladdinsys.com/

06-17-04 eletrico: Merrill Lynch on RIO:
RIO; $44.00; C-1-7
12-Month Price Objective: $80.00 (29-Jan-2004) EPS (Dec): 2003A $4.70; 2004E $4.82; 2005E $5.75 P/E (Dec): 2003A 9.4x; 2004E 9.1x; 2005E 7.7x

...
...Potential acquisition of Noranda could be dilutive to shareholders We believe that CVRD�s potential acquisition of Noranda could be dilutive to CVRD�s shareholders as we estimate that CVRD would pay 5.2X-5.3X EV/EBITDA for Noranda based on ML�s 05E while CVRD is currently trading at 4.0X also based on our 05E. Our analysis take into account a 20% premium to the average share price of Noranda as of last month, or equivalent to $19.3/ADR (10% premium to yesterday�s close at $17.5/ADR) as well as ~US$400-600 million of proceeds from asset divestitures (potentially American Racing Equipment and Norandal USA), which wouldn�t be core for the new company, in our view.
This transaction, if it occurs, would have a neutral impact on CVRD�s multiples if the company pays ~$12.7/ADR of Noranda, or equivalent to a 27% discount to yesterday�s close, which we believe is very unlikely. If CVRD were to pay our estimated price of ~$19.3 we would expect our NPV on CVRD to decline by a minimum of $2.60-$5.00/ADR depending on the stake in Noranda (current NPV $61/ADR)...

...We reiterate our BUY investment opinion on CVRD as we believe that the share price already reflects the impact of CVRD�s potential acquisition of Noranda.

06-17-04 carib: Rolf: i sent to Amateur my file, compressed with stuffit.

06-17-04 rolfkoch: tnx amateur,but what is this file-format ?

06-17-04 Amateur: Mendoza prospectus mailed to Web.De. now. First attempt failed, second seems to have succeeded.

06-17-04 carib: Vic: <6)> is what they do in my island, and in some rural roads in Brasil. However, on a highway, bumps would be very stupid, and dangerous.

Index of older articles by date
*NEW* Historical archive from 1998-1999

Please read our disclaimer.

General Correspondence: bradynet@bradynet.com Questions/Problems? support@bradynet.com