Archive for the ‘Brazil’ Category

Analysis – Brazil’s new economy chief will need space from Rousseff

| November 26th, 2014 | No Comments »
Article originally appeared in Reuters


(Reuters) – When Brazilian President Dilma Rousseff first considered replacing Finance Minister Guido Mantega two years ago, a top aide confided that any good candidate for the job would have to meet two requirements.

First, a good personal relationship with Rousseff, a notoriously gruff and demanding manager known for making subordinates break down in tears.

And second, accept that “Dilma likes to be the minister” – that as a trained economist with a fervent belief in a strong state, she would insist on making many policy decisions, even minor ones, herself.

Rousseff is expected to finally replace Mantega this week with respected banker Joaquim Levy. But it’s unclear whether the job description has really changed since then and whether Levy will have the power and independence to execute the pro-business shift that investors are hoping for.

A government official told Reuters that Rousseff, who won re-election last ... Read More

Rousseff Veto Signals More Brazil Fiscal Control Next Term

| November 26th, 2014 | No Comments »

By Raymond Colitt and Arnaldo Galvao

Brazil’s President Dilma Rousseff vetoed a budget law, signaling increased fiscal discipline as she prepares to nominate Banco Bradesco SA asset management chief Joaquim Levy as her finance minister.

The bill that was approved by congress on Nov. 5 would have allowed tax cuts without identifying revenue sources to offset them. Justifying the veto that was published today in the Official Gazette, Rousseff said the bill had been proposed at a time when revenue was rising.

“Therefore, the veto is justified because of a change in the economic cycle,” Rousseff wrote in the gazette.

Brazil’s budget deficit in September was the widest in more than a decade as the government increased spending and extended subsidized credit to fuel growth that is forecast to slow to 0.3 percent this year. The veto is the first sign that Rousseff is moving toward increased fiscal discipline in ... Read More

Brazil’s Rousseff Seen Naming Joaquim Levy as Finance Minister

| November 25th, 2014 | No Comments »
Wall Street Journal WSJ-01


SÃO PAULO—Brazilian President Dilma Rousseff is set to name Joaquim Levy, a former treasury secretary and prominent banker, as the country’s next finance minister, a move aimed at bolstering Brazil’s credibility amid slowing growth, rising inflation and falling markets, an official said.

Ms. Rousseff will name Mr. Levy as Thursday, possibly with other appointments for her second term that starts in January, the official said. Mr. Levy couldn’t be reached for comment.

The 53-year-old economist will succeed Finance Minister Guido Mantega to assume the top economic post at a crucial time for a resource-rich country hitting a downturn amid declining commodity prices. Brazil is mired in a toxic mix of near-zero growth and rising inflation, and its currency has lost more than a third of its value during Ms. Rousseff’s first term.

Job one for the next finance minister will be preserving Brazil’s coveted investment grade credit ratings. Economists say the ... Read More

Petrobras scam allegations weigh on Brazil as blacklist fears rise

| November 25th, 2014 | No Comments »
Financial Times

By Joe Leahy in São Paulo

When black money market dealer Alberto Youssef was arrested by police in March, he was carrying seven mobile phones with another 30 in a desk in his office, an officer involved in the case said.

The reason the jailed conspirator in what is emerging as Brazil’s biggest corruption scandal might have needed so many phones is becoming clearer after police this month raided the offices of Brazil’s major construction companies, arresting scores of officials and executives in the process.

The builders being investigated in the scam, in which Mr Youssef allegedly co-operated with former Petrobras director Paulo Roberto Costa to skim billions of dollars off the state-owned oil company to pay kickbacks to politicians, are responsible for much of Brazil’s infrastructure projects, from airports and nuclear submarine bases to stadiums for the 2016 Olympics.

The arrests have caused concern not only at home but among international investors. If ... Read More

Brazil’s Rousseff struggling to limit Petrobras scandal’s damage

| November 24th, 2014 | No Comments »
Article originally appeared in Reuters

By Brian Winter and Anthony Boadle

SAO PAULO/BRASILIA (Reuters) – President Dilma Rousseff expects a bribery scandal at state-run oil company Petrobras to deteriorate in coming months, aides say, with arrests possible for some political allies and potentially serious damage to an economy that is already struggling.

Prosecutors say corrupt officials siphoned billions of dollars from Petroleo Brasileiro SA, as the company is formally known, into the coffers of several parties including Rousseff’s Workers’ Party.

The probe has already resulted in the arrest of two former Petrobras officials as well as executives from eight of Brazil’s 10 biggest construction companies, which prosecutors say were part of the scheme. More arrests are expected.

“The only thing we know is that things will get worse,” a senior official close to Rousseff told Reuters.

Rousseff was chairwoman of Petrobras’ board from 2003 to 2010, but she ... Read More

The $31 Billion Bet Against Brazil’s New Finance Minister

| November 24th, 2014 | No Comments »

By Ye Xie and Filipe Pacheco

Whoever is tapped by Brazilian President Dilma Rousseff to oversee the government’s finances in her second term, one thing is clear: There’s plenty of work to be done to win over currency investors.

While the real gained the most in three weeks on Nov. 21 amid optimism the looming cabinet shuffle will help shore up Brazil’s economy, foreigners are betting on more declines after the currency weakened to a nine-year low this month. Overseas holdings of futures contracts wagering against the real have soared 30 percent since Sept. 29 to $31.3 billion as of last week, according to data compiled by the Sao Paulo bourse. That’s just 8.6 percent shy of August’s record high.

A surge in government spending, coupled with Rousseff’s intervention in Latin America’s biggest economy, has left Brazil with its widest budget deficit in a decade and near-zero growth. ... Read More

3 Reasons Why Brazil’s State-Controlled Oil Giant Petrobras Should Be Privatized

| November 21st, 2014 | No Comments »


One of the most famous songs by the late Brazilian rock star and songwriter Raul Seixas is entitled ‘Rent,’ in reference to what he considered to be the best solution for Brazil: literally, to rent the country for foreigners. The song was composed in 1980, at a time when Brazil was going through a difficult economic period marked by hyperinflation.

Fast-forward to 2014.

Today the ghost of price increases gone out of control has come back to haunt Brazilians, partly due to a government-sponsored rise in fuel prices that resulted in consumer prices advancing 6.54% in the 12 months through mid-November, down from a rise of 6.62% through the previous month but still above the 6.5% ceiling of Brazil’s Central Bank target, according to the median of 22 market forecasts for the IPCA-15 inflation index.

Add to that a total lack of confidence from investors, ... Read More

Petrobras scandal: Brazil’s energy giant under pressure

| November 21st, 2014 | No Comments »

By Ruth Costas

Brazil’s state-run oil giant Petrobras has always been a company of superlatives.

In recent years, it has become not only the largest but also one of the most internationally recognised firms in Latin America.

It has discovered huge deep-water oil reserves, which experts predict could turn Brazil into a top energy player.

And in one of the biggest share sales in history it raised $70bn in 2010.

But recent investigations by the Brazilian Federal Police and public prosecutors have added an unfortunate addition to this record.

They have put Petrobras at the centre of what is thought to be one of the biggest corruption scandals in Brazil’s history.

“This [scandal] may change the country forever,” President Dilma Rousseff acknowledged during the recent G20 summit in Australia.

A number of Petrobras directors are accused of taking bribes from construction companies and funnelling funds to parties of the ruling coalition.

The investigation – ... Read More

Brazil Official Sees Alleged Petrobras Corruption Scheme Reaching $1.6 Billion

| November 20th, 2014 | No Comments »
Wall Street Journal WSJ-01


SÃO PAULO—The alleged corruption scheme said to involve kickbacks from contracts at Brazil’s state-controlled energy giant Petroleo Brasileiro SA, or Petrobras , may have totaled as much as 4 billion Brazilian reais ($1.6 billion), according to the head of the country’s budget watchdog.

Brazil’s Court of Accounts, which is known by its Portugese initials TCU, is helping the country’s federal police investigate allegations of payments to politicians with money skimmed from Petrobras contracts, according to TCU President Joao Augusto Nardes.

The value calculated by Mr. Nardes includes money allegedly overcharged on contracts involving the purchase of a refinery in Texas and the construction of a petrochemical complex in Rio de Janeiro state and three refineries in other locations in Brazil.

“This case is the biggest corruption scheme evaluated in the history of the TCU, in terms of the financial amount involved and also regarding the huge number of people involved,” Mr. Nardes told The ... Read More

Brazil Inflation Pleasantly Surprises, But Economy In ‘Perilous State’

| November 20th, 2014 | No Comments »


A pleasant surprise out of Brazil Wednesday for market watchers: inflation fell to 6.4% on the year, better than anyone imagined.

The news helped provide the iShares MSCI Brazil (EWZ) with some buoyancy today, up 0.83% while the MSCI Emerging Markets Index is trading in the red. Declining inflation likely means the Central Bank will not tighten as quickly as initially thought. Consensus still has rates rising to 12% from 11.25% today.

November IPCA-15 inflation was 0.38% month over month, which returns us to the 12 month inflation rate of 6.42% from the 6.62% in the previous month. The slowdown from October, when inflation rose 0.48%, came mainly from the food and housing groups. Today’s inflation data means the Central Bank’s rate hike cycle should be a short rather than a longer one. Bruno Rovai, a Barclays Capital fixed income analyst in New York, ... Read More

Brazil’s Petrobras vows overhaul amid graft allegations

| November 18th, 2014 | No Comments »

The head of Brazil’s state-owned oil company, Petrobras, Graca Foster, promised to improve the way it is is run as it struggles to deal with a huge corruption scandal.

Ms Foster said the company would create a compliance division to track internal processes.

On Friday 23 people were arrested on suspicion of money-laundering and corruption.

Among them were executives of Brazil’s biggest construction companies.

“We are going through a very difficult moment in the company, but we are convinced that we will have better management after we structure and implement all of these managerial processes,” said Graca Foster.

The scandal was a sensitive issue for Brazil’s President Dilma Rousseff in last month’s presidential election.

She was challenged several times over the issue and has said she had no knowledge of the kickback scheme which allegedly paid out to several political parties, including her own ruling Workers Party.

She was forced to admit there was evidence of wrongdoing ... Read More

Ibovespa Declines on Speculation Petrobras Will Face Penalties

| November 18th, 2014 | No Comments »

By Denyse Godoy

The Ibovespa fell for a third day as oil producer Petroleo Brasileiro SA said it may face penalties for not releasing financial results on the scheduled date.

Power utility Centrais Eletricas Brasileiras SA, known as Eletrobras, slid to a two-year low after reporting a loss. Banco do Brasil SA, Latin America’s largest bank by assets, rose after Cielo SA said it’s negotiating to manage the lender’s card business.

The Ibovespa retreated 1 percent to 51,256.99 today in Sao Paulo. Petrobras, as state-run Petroleo Brasileiro is known, was the biggest contributor to the decline after Chief Financial Officer Almir Barbassa said the company may be investigated by Brazil’s securities regulator for not publishing its third-quarter results on Nov. 14.

“There is a lot of concern regarding a possible punishment and what the company will do to recover from the losses,” Raphael Figueredo, an analyst at brokerage firm ... Read More

Dilma’s doldrums

| November 17th, 2014 | No Comments »
The Economist

AS SHE hobnobs with the other G20 heads of state in Brisbane this weekend, Dilma Rousseff, re-elected last month to a second four-year term as Brazil’s president, will have precious little besides her (narrow) victory to boast about. Every day seems to bring more evidence of just how big a mess she has left herself. Official data released in the past three weeks have shown a bulging budget deficit, falling industrial production and rising poverty. Even the job market, until recently a rare bright spot, with unemployment near historic lows of around 5%, is beginning to falter. This week payroll numbers showed a net loss of 30,000 jobs in October, the worst result for the month since 1999 and well below the average market expectations of a gain of 56,000.

Days before a kerfuffle broke out over a bill sent to Congress that would let Ms Rousseff ... Read More

Latin American Violence: After Mexico, Brazil Could Be Next

| November 14th, 2014 | No Comments »
World Crunch-01


SAO PAULO — During my time in the early 1980s as a correspondent for Folha de S. Paulo in Buenos Aires, I covered more demonstrations of the “Mothers of the Plaza de Mayo” — and then of the “Grandmothers” — than I could count. Brave women, their faces furrowed by time and pain, their heads covered with white scarves, asking for the return of their sons and grandsons who had disappeared under the regime’s repression.

In truth, they had all been killed, but again and again the cries came, “You took them alive, we want them back alive.”

I heard similar shouts in Chile and Uruguay, other countries where the repressive regime’s savagery produced victims on an industrial scale. The dictatorships are gone in these three countries and in the rest of Latin America — with the exception of Cuba — and the cries were gradually replaced by official ... Read More

Brazil’s Real Falls to Nine-Year Low Before Finance Appointment

| November 13th, 2014 | No Comments »

By Filipe Pacheco

Brazil’s real dropped to the lowest level in nine years as investors awaited President Dilma Rousseff’s appointment of a new finance minister amid a slowdown in Latin America’s largest economy.

The currency lost 0.2 percent to 2.5733 per U.S. dollar at 11:55 a.m. in Sao Paulo, the weakest level on a closing basis since April 2005. Swap rates, a gauge of expectations for changes in borrowing costs, climbed 0.05 percentage point to 12.82 percent on the contract maturing in January 2017.

The replacement for the departing Finance Minister Guido Mantega will face the challenge of reviving growth, slowing above-target inflation and stemming deficits that are threatening the country’s investment-grade status. One-month implied volatility on options for the real, reflecting projected shifts in the exchange rate, remained the highest among 16 major currencies tracked by Bloomberg.

“There are too many uncertainties, and the new economic team will have the ... Read More

Is Hezbollah smuggling weapons to Brazil?

| November 11th, 2014 | No Comments »
The Jerusalem Post-01

Hezbollah is being investigated in Brazil for the illegal trade of firearms, Brazil’s influential O Globo newspaper reported on Sunday.

According to the report in the Rio de Janeiro-based paper, Federal investigators in Brazil have been probing possible ties between Lebanon and criminal gangs in Brazil for the past eight years.

Hezbollah-linked groups allegedly began smuggling arms into Brazil back in 2006, according to federal documents obtained by O Globo, which suggest that Lebanon’s lucrative drug trade played a key role in funding the illegal trade.

The intelligence community said they had a mountain of evidence to support these claims.

The Brazil-bound weapons ultimately reached jails, from which the criminal gangs operated, in exchange for “protection of any foreigners [already] detained in prisons,” as well as a slice of the profit. Beyond smuggling arms, Hezbollah reportedly helped negotiate deals to attain explosive devices for terror schemes.

The report first surfaced after US officials looked into Lebanon’s illegal drug trade and found links between Brazilian criminals financing Hezbollah.

Click ... Read More

Election Over, Battle for Brazil Rages

| November 11th, 2014 | No Comments »
Bloomberg By Mac Margolis Last week I sat down with a Brazilian acquaintance who was shaking his head over the state of national politics. A graduate of a military high school, he’d been getting e-mails from former classmates, many of them now retired army officers, who were irate over the recent presidential elections.

“We need to kick these no-good Petistas out of office,” one bristled, using the derogatory shorthand for members of the ruling Workers Party, or PT in Portuguese.

You’d think such partisan tub-thumping from the Oct. 26 race  might have subsided by now. And yet the battle for Brazil rages. On Nov. 1, some 2,500 protestors marched down Avenida Paulista, an important Sao Paulo boulevard. Some of their placards warned of an imminent radical takeover in the vein of Venezuela’s so-called Bolivarian revolution for 21st Century Socialism. Others clamored for the impeachment of newly re-elected President Dilma Rousseff.

“Golpistas!” (coup plotters!) and “Facistas!”, answered the “Dilmistas” ... Read More

Cuba’s Slave Trade in Doctors

| November 10th, 2014 | No Comments »
Wall Street Journal WSJ-01


Western cultures don’t approve of human trafficking, which the Merriam-Webster dictionary defines as “organized criminal activity in which human beings are treated as possessions to be controlled and exploited.” Yet it’s hard to find any journalist, politician, development bureaucrat or labor activist anywhere in the world who has so much as batted an eye at the extensive human-trafficking racket now being run out of Havana. This is worth more attention as Cuban doctors are being celebrated for their work in Africa during the Ebola crisis.

Cuba is winning accolades for its international “doctor diplomacy,” in which it sends temporary medical professionals abroad—ostensibly to help poor countries battle disease and improve health care. But the doctors are not a gift from Cuba. Havana is paid for its medical missions by either the host country, in the case of Venezuela, or by donor countries that send funds to the World Health ... Read More

Republicans Should Signal Leadership, at Home and Abroad

| November 10th, 2014 | No Comments »
Roll Call

The 2014 midterm elections were a rejection of the policies of President Barack Obama. And the Republican takeover of the Senate is a repudiation of the gridlock in Congress symbolized by the bare-knuckles tactics of outgoing Majority Leader Harry Reid.

The new Republican Senate leadership should move swiftly to seize the high ground and signal it is ready to do the peoples’ business. Quick action on several international issues — the Keystone XL pipeline, trade promotion authority and long-delayed ambassadorial nominations — are bipartisan actions that Republicans should put on the table even before they take over in January.

Although opinion polls show voters favor Republican positions on the economy, foreign policy and security, the party’s brand needs burnishing. As Obama hints at a more confrontational tone that could undermine any hope of making Washington work, Republicans can rise above Obama’s blame game by working with Democrats on tangible initiatives to bolster America’s ... Read More

Brasil: Renuncia comandante de policía de Río de Janeiro

| November 7th, 2014 | No Comments »
El Nuevo Herald


El comandante de la policía militar del estado de Río de Janeiro renunció en medio de denuncias de que aceptó sobornos para no investigar casos de narcotráfico y otros crímenes.

El coronel José Luis Castro Menezes renunció y será reemplazado por el coronel Alberto Pinheiro.

Pedro Dantas, del Departamento de Salud Pública, dijo que Menezes no ha sido acusado oficialmente de ningún delito, y que su reemplazo se debió a cambios que están siendo adoptados en la fuerza policial. No dio más detalles.

Veinticuatro policías han sido arrestados en el caso de los sobornos.

De click aquí para tener acceso a artículo ... Read More
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