The big picture behind Brazil’s protests

March 19, 2015

Patrick Gillespie – CNN Money, 3/17/2015

Over a million Brazilians protested in the streets Sunday, calling for the impeachment of President Dilma Rousseff.

A massive corruption case involving the president helped spark the protests, but Brazilians also marched out of frustration that Brazil’s economic boom is over.

South America’s largest economy was last decade’s emerging market darling. Now it’s edging toward recession and its currency is losing value quickly. The corruption scandal and economic collapse are creating a perfect storm for public unrest.

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Why is Brazil so angry?

March 19, 2015

Diogo Costa – The Telegraph, 3/18/2015

Popular dissatisfaction is growing in intensity and scope in Brazil. On Sunday, over one million protesters took to the streets in cities of every Brazilian state in the largest political demonstration since democracy was restored in the country in 1985.

As in the previous wave of protests in 2013, there was no unity in the actual demands. Some signs asked for the punishment of corrupt politicians, others for presidential impeachment.

The more nostalgic even asked for military action. This time, however, the target of discontent seemed clearer than ever before: president Dilma Rousseff and her party, the PT. Dilma Rousseff is experiencing the culmination of two crises that have been building up since she took office in 2011.

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Brazil’s economic difficulties are cyclical argues President Rousseff

March 13, 2015

Mercopress, 3/13/2015

“We’re going through a time of cyclical difficulties but we’re a country with a solid foundation,” the head of state said at the inauguration of a project to expand and modernize the Port of Rio de Janeiro.

Rousseff, who again refused to characterize Brazil’s current situation as a crisis, defended her austerity program in the face of criticism from the opposition and some government allies.

Brazil’s economy is stagnant and may contract 0.7% this year, according to the latest forecasts, while the country’s federal, state and local governments ended 2014 with a cumulative primary budget deficit (before interest payments) equivalent to 12.51 billion, putting public finances in the red for the first time since the current reporting methodology was adopted in 2001.

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Putting Brazil’s political risk in perspective

March 13, 2015

Kenneth Rapoza – Forbes, 3/13/2015

The case for Brazil is not hard to make: diverse economy, rising incomes, cheap assets, high investment grade yield, and despite scandal a relatively stable government. But the noise is so deafening, and the recent data so awful, that it’s hard to make the case that Brazil has hit bottom. The bottom is coming, only not until next year.

For the contrarian investor, maybe you get ‘em while they’re hot?

Think about this for instance: the Brazilian real is trading near historic lows at R$3.20 on Friday’s opening in São Paulo. It is projected to stay there for another year, hovering between R$3.00 and R$3.15, according to Barclays Capital’s estimates. If you bought a local currency Brazilian bond, and held it for three years, you’d be getting 12.75% interest at least, and most likely a gain from the currency when the real strengthens again in a year or two.

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Brazil real seesaws in volatile session

March 10, 2015

Reuters, 3/10/2015

The Brazilian real moved 1 percent up and down in less than two hours of trading on Tuesday as a combination of global headwinds and domestic problems made the currency vulnerable to wild swings.

The real opened more than 1 percent lower and hit 3.1722 per dollar, its weakest in more than 10 years, before erasing losses to rise more than 1 percent to 3.097.

It last traded at 3.1244, 0.2 percent stronger than Monday’s close.

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Brazil femicide law signed by President Rousseff

March 10, 2015

BBC News, 3/9/2015

Brazil’s President Dilma Rousseff has signed a new law which sets tough new penalties for the killing of women and girls.

Murders linked to domestic violence will carry sentences of between 12 and 30 years.

President Rousseff said the new law sends a clear message to women that the state would protect them.

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Brazil’s Levy says weak real not big fix for economy

March 10, 2015

Reuters, 3/10/2015

Brazil’s economic growth depends more on the approval of austerity measures needed to rebuild investor confidence than on a weaker currency, Finance Minister Joaquim Levy told O Globo newspaper.

One day after the Brazilian real tumbled to its weakest level in more than 10 years, Levy downplayed the notion that a weak currency is the key to making Latin America’s largest economy grow again.

“The idea that a weaker currency is the big solution to Brazil is not correct, despite its popularity in some circles,” he said in an interview published on Tuesday.

 

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