MercoPress. South Atlantic News Agency
S&P warns Brazil could lose investment-grade rating as economic slippage continues
Standard & Poor's on Tuesday said Brazil could lose its coveted investment-grade rating in the coming year if fallout from a number of corruption investigations further stymies economic growth and the implementation of austerity measures. Read full article
Comments
Disclaimer & comment rulesThey will lose investment grade.
Jul 29th, 2015 - 11:46 am - Link - Report abuse 0They will use reserves to try to support the BReal
This guy will resign.
Levy was suckered into this position by DumbAss, who originally didn't want him until the business sector forced her. He is literally Brazil's only hope with the rating agencies following the disastrous actions of The Liar Mantega who lied about the economy to maintain grades until it all fell apart when the truth was out.
Jul 29th, 2015 - 01:23 pm - Link - Report abuse 0Will Levy stay? I don't know but he has been misled by DumbAss and The Chief Crook Lula over the bribes situation and it would not surprise me if he goes.
Brazil are in a very difficult situation here and are very likely to suffer catastrophic systemic failure of the financial sector at the very least.
But they have worked for it and they deserve it.
I think there's someone blowing in their ears. It was for them to have lowered the note of Brazil. Rating agencies in Brazil have done it.
Jul 29th, 2015 - 03:04 pm - Link - Report abuse 0Do you know why?
Simply because the Western capitalist world does not interest us more. So, no matter what they do. Because anything they do is only postpone death of Western capitalism.
They maintain investment grade not because of us, but for themselves. A bubble of speculation is theirs, not ours. We continue to sell our food, our radio batteries, and our I3 computer. We continue to build ships, rigs and helicopters.
We continue to make progress in our relationship with the BRICS countries. Gradually, day by day.
The West still live in a world forgotten by God.
A video for your enjoyment:
https://www.youtube.com/watch?v=bJupDq7Ip1s&index=2&list=LLmXPTu1f8AdGlizWNiASx2A
@ 3 Brasso
Jul 29th, 2015 - 06:25 pm - Link - Report abuse 0There is NO god you idiot and the West doesn't and couldn't give a fuck about Brazil and the Nuts who run it.
Peace!
@3 brASSHOLE
Jul 29th, 2015 - 09:50 pm - Link - Report abuse 0“...blowing in their ears” ??? what kind of shite English is that ? I know what you are trying to say, but only because I speak Portuguese.... the word you wanted but was incapable of looking for beyond some online translator, is “whispering”.
I think however, someone has been blowing up your rear...
It is obvious your ignorant, radical approach to any subject which requires a brain, misses the point. First of all, you need to understand that in today's globalization, no country can isolate itself without the risk of becoming backward and retuning to the dark ages.....That established, it is clear that what Brazil needs most at the moment, is to create confidence in investors, both local and international. The fact that you think the capitalist world does not interest Brazil shows how little you understand......and, I suppose you believe that China does not act like a true capitalist when it invests in foreign countries, such as Brazil ? You praise China, but based on what type of economy did they build up their reserves of trillions of dollars ? Answer that, IF you can.
But the main point here is that S & P's has downgraded Brazil, to almost losing the investment grade, which in practical terms means that Brazil will not see much foreign investment in the near future, and if it does, it will be under highly unfavourable conditions.
Since you like to sound well informed, and mentioned ship-building, no doubt you have read about the oil-tanker that Lula ordered locally for Petrobras, about 10 years ago.....the infamous “João Candido”...
It cost US$ 360 million - double the price tag of a similar building if ordered from S.Korea - it almost sank on its maiden voyage, due to gross technical errors , and today is laid up and the government doesn't know what to do with it, as to fix the unfixable would cost more than its original price tag...but no worry, Lula and the PT got their cut.
Hey Brasshole if you think that Brazil should have nothing to do with the western world why then are you a hypocrite because you obviously read the news items in English i.e these items are not in the language used in Brazil and then you try and write in English, you obviously like this part of integrating with the western world, take a running jump from writing, practice what you preach and write on a Portuguese language based website.....then we won't have to put up with your insane comments.
Jul 30th, 2015 - 04:16 am - Link - Report abuse 0The recent droughts that have afflicted the South, Southeast and Center-West regions of the country have reduced hydroelectric power generation to concerning levels. Insufficient production forced Brazil to import energy from Argentina after ten Brazilian states experienced a blackout in the past week.
Jul 31st, 2015 - 12:55 am - Link - Report abuse 0Moreover, as the drought does not seem to subside, the alternative has been the use of natural gas, a more expensive source of energy. As a result, Brazilians are expected to face a thirty per cent increase in electricity bills this year, which is also due to impact the industry.
... High commodity prices and the Chinese growth have been important propellers for Brazil’s growth in the past and were largely responsible for trade surpluses.
A future recovery
..it is now clear that recovering growth and avoiding a second consecutive year of trade deficit will involve tackling challenges that have long haunted Brazilian leaders.
For starters, Brazil needs to search for ways of integrating global supply chains, from which it remains relatively isolated. Exporting seems to become ever more challenging for the Brazilian industry while the country’s trade balance remains largely dependent on commodity prices. Moreover, the current energy crisis has put in evidence bottlenecks in infrastructure and insufficient planning that lower investment confidence.
However gloomy the prospects for Brazil might be in 2015, the transformative impetus that appears to have emerged is positive as it welcomes the possibility of change in a country trapped with slow growth and high inflation for over three years. Attention however should be paid to old challenges and external hazards that are now eclipsed by the fiscal and institutional crises. They will help determine how Brazil will fare in its recovery – whether it will face a temporary contraction or be plunged into recession.
http://globalriskinsights.com/2015/02/recession-ahead-brazil/
@7 Terence
Jul 31st, 2015 - 07:58 pm - Link - Report abuse 0While the above article describes the current situation in Brazil, and explains a couple of the causes, it ignores the main cause.....The PT backed Federal Government's incompetent management of the economy during the last 10 years....if the problems Brazil is facing today, were caused by, and only by the drought and the drop in the prices of commodities, the government's popularity wouldn't be at the all-time low of 7% ...
Perhaps, but most observers point to this being mainly the result of the continuing fall-out from the 2009 US crisis. In addition, the financial picture is never stable, and don't if you read the tea-leaves right you can have a problem. Moreover, the greatest effect on the emerging economies has been the rising US dollar.
Aug 01st, 2015 - 05:01 pm - Link - Report abuse 0“The South American Financial Crisis Of 2015
In general, South American economies are very heavily dependent on exports, and right now they are being absolutely shredded by the twin blades of a commodity price collapse and a skyrocketing U.S. dollar....
For instance, just consider what is happening in Brazil…
Brazil’s real plummeted to a 12-year low of 3.34 to the dollar, reflecting the country’s heavy reliance on exports of iron ore and other raw materials to China.
The devaluation tightens the noose on Brazilian companies saddled with $188bn in dollar debt taken out during the glory days of the commodity boom. The oil group Petrobras alone raised $52bn on the US bond markets...”
http://etfdailynews.com/2015/07/30/the-south-american-financial-crisis-of-2015/
@9 Terence
Aug 01st, 2015 - 06:57 pm - Link - Report abuse 0Sure, I'm not disagreeing with the opinions being put forward.....but we cannot forget one, very significant fact :- Lula, in 2009 , at the height of his self-appointed glory, stated that the world crisis had “reached Brazilian shores as a tiny , insignificant wave”, a “marolinha”, remember ?? Well, in total inconformity with the rest of the world, that had fully realized the seriouness of the crisis and was taking measures to face it, Lula continued to downplay it - to his loyal, mostly ignorant supporters - and kept on with his demagogic policies....had he, and subsequently Dilma, opted to form a serious government instead of concentrating on their infamous project for perperpetual power, Brazil would have fared better.....in other words, the PT either failed miserably to realize they were on the wrong track, or, if they did, then they were really only interested in their own disgusting project. Either way, they've gotta go !!
That's just the thing though about Brazil - they have a very closed economy with a very low export percentage. They should be exporting a whole lot more! See the link, only 5 countries export less as a percentage of GDP.
Aug 01st, 2015 - 08:27 pm - Link - Report abuse 0http://www1.folha.uol.com.br/mercado/2015/07/1661171-so-5-paises-exportam-menos-que-o-brasil-em-proporcao-do-pib.shtml
Economic policy instituted by the current Government was unsustainable, now the commodity boom is no longer here to make them look good and they have shown that they have no answers.
There is no confidence in Brazil now, investors are pulling out, downgrade will come, currency will continue to devalue, but at least the export sector should get some solace in that.
@11 Tik Tok
Aug 01st, 2015 - 10:10 pm - Link - Report abuse 0The closed economy, and the fragile foreign trade (policy), i.e., the result of absurd import restrictions, and a very poorly promoted export trade, are now becoming more obvious. The last 3 governments have refused to admit to that, far less 'really' done anything about it. They placed all their eggs in one basket - basically China - to the point of allowing in tons of unnecessary items, and in the process killing off a good part of Brazil's industrial park....and lots of jobs. Am by no means saying that Brazil should not import, much to the contrary, but they should balance the system whereby 'healthy' competitivess prevails, and may the best 'product' win........The government. instead of incentivating 'industry' to import the latest, most modern machinery, to achieve high productivity and to be competitive, imposed all sorts of restrictions. And the other side of the coin would obviously be to diversify exports, so as to not fall into the rut that the PT have got Brazil into.
“There is no confidence in Brazil” There's no confidence in any markets outside the US, and even those stocks have dropped “capital fleeing the periphery and rushing back to the US”.
Aug 01st, 2015 - 10:21 pm - Link - Report abuse 0”Why a Stronger Dollar will Lead to Deflation, Recession and Crisis
The rising dollar, which has soared to a twelve year high against the euro, has sent US stock indices plunging as investors expect leaner corporate earnings, tighter credit, and weaker exports in the year ahead. The stronger buck is also wreaking havoc on emerging markets that are on the hook for $5.7 trillion in dollar-backed liabilities. While most of this debt is held by the private sector in the form of corporate bonds, the stronger dollar means that debt servicing will increase, defaults will spike, and capital flight will accelerate. Author’s Michele Brand and Remy Herrera summed it up in a recent article on Counterpunch titled “Dollar Imperialism, 2015 edition”. Here’s an excerpt from the article:
“There is the risk for a sell-off in emerging market bonds, leading to conditions like in 1997. The multitrillion dollar carry trade may be on the verge of unwinding, meaning capital fleeing the periphery and rushing back to the US. Vast amounts of capital are already leaving some of these countries, and the secondary market for emerging bonds is beginning to dry up. A rise in US interest rates would only put oil on the fire.
The World Bank warned in January against a “disorderly unwinding of financial vulnerabilities.” According to the Financial Times on February 6, there is a “swelling torrent of ‘hot money’ cascad[ing] out of China.” Guan Tao, a senior Chinese official, said that $20 billion left China in December alone and that China’s financial condition “looks more and more like the Asian financial crisis” of the 1990s, and that we can “sense the atmosphere of the Asian financial crisis is getting closer and closer to us.” The anticipated rise of US interest rates this year, even by a quarter point as the Fed is h
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