This country’s battered stocks could make a great buy

Stephanie Yang – CNBC, 7/30/2015

Brazil’s economy is facing a bleak outlook, plagued with increasing inflation, a plunging currency and contracting GDP. The Dow Jones Brazil Index has fallen almost 45 percent in the past year. But one trader says that all those negative factors are actually creating the perfect environment for a significant bounce.

“I think we’re going to get another 10, possibly 20 percent bear market rally, of which since 2012 we’ve had four,” Larry McDonald, head of U.S. strategy at Societe Generale, said Wednesday on CNBC’s “Trading Nation.”

According to McDonald, economic challenges will force Brazil’s central bank to ease its monetary policy, which will prompt a relief rally for Brazilian stocks.

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Brazil’s budget hole widens in June

Paulo Trevisani – The Wall Street Journal, 7/31/2015

Brazil announced Friday another setback to government efforts to increase savings and balance its books amid a deep economic contraction.

The government posted a 9.3 billion Brazilian reais ($2.8 billion) primary deficit in June, the country’s central bank said. That compares with a primary deficit of 6.9 billion reais in May and brings the 12-month result to a 45.7 billion reais deficit, equal to 0.8% of gross domestic product. This year’s target is a surplus 0.15% of GDP.

“It is a bad result,” said João Pedro Brugger, an economist at Leme Investimentos, an asset-management firm in São Paulo. “The government will have to make additional efforts to meet its target,” something particularly difficult when the economy is weak, he said.

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Brazil police ‘killed hundreds’ in Rio – Amnesty

BBC, 8/3/2015

Amnesty says it has found evidence that police killings were often illegal, with officers shooting suspects who had surrendered or had been wounded.

There has been no response so far from Brazil’s military police.
Police unions earlier said the number of officers killed was also very high.In Rio de Janeiro alone, 114 police were killed in 2014, according to the civilian police union Sindpol.

Police officers have in the past denied being “trigger happy”, saying they act in self defence when they come under fire from drug dealers in Rio’s sprawling favelas.

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Odebrecht: Brazilian construction giant in the crosshairs

Daniel Gallas – BBC, 8/3/2015

Many businesses saw their operations blossom too.
Among them, one stood out as a clear winner: Odebrecht group, which owns Latin America’s biggest construction company.
Under the leadership of chief executive Marcelo Odebrecht, whose grandfather founded the company, the group more than doubled in size and revenue in 10 years.

It now has 181,000 employees in 21 countries.
The company won contracts across the world – to expand the Caracas metro system, build a port in Cuba and carry out many infrastructure projects in Africa.

When Brazilian presidents travelled abroad, Odebrecht executives were regular fixtures in the usual business entourage.

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The “Calamitous Club” has a new member: Brazil

Eric Chemi – CNBC, 8/1/2015

Earlier this week, Deutsche Bank put out an analysis of the most woeful countries. In particular, the write up contained a smart little paragraph on a global powerhouse that used to be a darling of the global economy:

Arthur Okun’s misery index sums unemployment with inflation as a measure of hardship – at least for the man on the street. Suffering politicians, meanwhile, are in serious trouble when they join the so-called Calamitous Club. Membership – reserved for governments whose poll ratings are below their country’s inflation rate – is exclusive. Indeed, until last week only Venezuela’s ruling socialists made the grade. No longer.

The piece was part of a broader note, authored by UK-based managing director Stuart Kirk. Here is where the juicy part begins:

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Brazil lawyer defending corrupt execs in Petrobras scandal steps down, cites political threats

Kenneth Rapoza – Forbes, 7/31/2015

Brazilians woke up Friday to discover that one of the defending lawyers in the biggest corruption case in the nation’s history has resigned, citing threats to her life.

Beatriz Catta Preta told Globo TV news that she would no longer be defending the big construction firms implicated in the ongoing Petrobras scandal.

“Due to all that is going on, and in order to protect my children and my own safety, I’ve decided to end my career,” she told the Jornal Nacional broadcast. She said that threats came after it was revealed by the courts that her construction client Camargo Correa had paid an embarrassing $5 million to Eduardo Cunho, president of Brazil’s lower house of congress and member of the corrupt political party PMDB.

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Brazil police arrest former presidential chief of staff

Sergio Spagnuolo – Reuters, 8/3/2015 

Brazil’s federal police on Monday arrested former government minister Jose Dirceu, one of the most senior members of the ruling Workers’ Party to be jailed so far in a probe of alleged corruption at state-run oil company Petrobras.

Dirceu, chief-of-staff in Luiz Inacio Lula da Silva’s administration between 2003 and 2005, was already under house detention for conducting a vote-buying scheme. His involvement in an even larger scandal threatens to further tarnish the popular former president’s legacy.

Federal prosecutor Carlos Fernando dos Santos Lima said during a press conference that Dirceu was one of the key instigators of the Petrobras scandal and took bribes while in office.

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