Exclusive: U.S. bets on Brazil, extends new invitation to Rousseff

March 24, 2015

Brian Winter – Reuters, 3/24/2015

The Obama administration has again invited Brazil’s President Dilma Rousseff for a state visit to Washington, a diplomatic breakthrough that both sides hope will lead over time to greater trade between the two biggest economies in the Americas.

Rousseff had originally been scheduled to make a state visit, which involves a black-tie dinner at the White House and is considered the strongest expression of friendly ties between allies, in October 2013.

But the leftist leader canceled her trip after she was angered by revelations that the U.S. National Security Agency (NSA) spied on her personal communications. She said it was “incompatible” with a relationship among allies.

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FIFA made an insane amount of money off of Brazil’s $15 billion World Cup

March 24, 2015

Tony Manfred – Business Insider, 3/20/2015

FIFA released its 2014 financial report, and it shows how the organization profited off the World Cup that cost Brazil billions. The 2014 World Cup generated $4.8 billion in revenue for FIFA compared to $2.2 billion in expenses. Over the four-year cycle, the event turned a $2.6 billion profit.

FIFA made $2.4 billion in TV rights fees, $1.6 billion in sponsorships, and $527 million in ticket sales.

Much of FIFA’s World Cup spending went to participating teams and confederations ($476 million) and TV production costs ($370 million). FIFA contributed $453 million to the local organizing committee between 2011 and 2014, and gave Brazil a $100 million “legacy” payment after the tournament.

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Brazil’s Biggest Banks Caught In Petrobras Dragnet

March 23, 2015

Kenneth Rapoza – Forbes, 3/22/2015

Fifteen banks will join Petrobras next week, April 3, in a New York court to explain how they did nothing wrong when selling $98 billion worth of the Brazilian state oil company’s bonds to American investors.

Of the 15, lawyers representing the investment banking divisions of Itau and Bradesco will appear before New York judge Jed Rakoff in hopes to escape the scandal.

Petrobras is currently in the middle of its worst, and most embarrassing moment in its history. A massive corruption scandal involving its construction partners and ruling party politicians is threatening to take down members of congress. Last weekend, hundreds of thousands of Brazilians took to the streets in protest against Petrobras and the Workers’ Party. Some called for the impeachment of president Dilma Rousseff.

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Democracy, Brazil Style: Why Dilma Rousseff Will Survive the Protests

March 23, 2015

Kathryn Hochstetler – Foreign Affairs, 3/22/2015

Earlier this month, the streets of Brazil’s major cities filled with protestors. Timed to the 30-year anniversary of the end of military rule in 1985, the March 15 protests were probably the largest since Brazil became a democracy and were certainly larger than the widely reported demonstrations of June 2013. Yet real numbers are hard to come by. Protests were clearly biggest in the city of São Paulo, but estimates of the size of the crowd gathered there range from 210,000 (Instituto Datafolha, which is linked to the Folha de São Paulo newspaper) to over a million (the state-controlled military police). If the lower estimate is correct, some hundreds of thousands of people came out onto the streets across the country. If the higher estimate is right, the total would be around 1.7 million people.

The size matters; those who marched had a harsh message for President Dilma Rousseff, now ten weeks into her second term of office. Many called for her impeachment, evoking memories of the million or so who, in 1992, successfully marched for the impeachment of President Fernando Collor de Mello. Many commentators, therefore, take the number of protesters as a measure of how long Rousseff has left in office.

Although demands for Rousseff’s impeachment made headlines around the world, however, the real story is Brazil’s economic troubles and its ever-growing corruption scandal. Economic growth has flatlined, and inflation and government deficits are rising quickly. In her first term, Rousseff was unsuccessful in stimulating the economy, and she has few new options left except economic austerity. Ironically, meanwhile, Collor is now not only a senator but also among the 34 sitting congressional representatives just placed under formal investigation and possible indictment for corruption. With 16 others, including the treasurer of Rousseff’s governing Workers’ Party (PT), these representatives are accused of taking part in a kickback scheme that skimmed money from the state-controlled oil company Petrobras and redirected it to Rousseff’s 2010 campaign and the personal fortunes of many participants.

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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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Brazil’s Annual Inflation Hits Highest Level In Nearly 10 Years

March 6, 2015

Rogerio Jelmayer – The Wall Street Journal, 5/6/2015

Consumer prices in Brazil rose more than expected in February, putting the 12-month rate at the highest level in nearly 10 years and underlining one of the main challenges facing Latin America’s largest economy in the year ahead.

Brazil’s consumer-price index, the IPCA, was up 1.22%, compared with a rise of 1.24% in January, the Brazilian Institute of Geography and Statistics, or IBGE, said Friday.

The rolling 12-month IPCA increased 7.70% through February, up from 7.14% in January, remaining well above the 6.5% ceiling of the central bank’s target range. The 12-month figure marked the highest level since May 2005, when it reached 8.05%.

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Neymarketing: The one-man brand from Brazil

March 6, 2015

Ben Lyttleton – Goal, 3/5/2015

There are six players in the Rich List Top 20 who are under 30, but only one under 26. That man is Neymar, 23, who comes in third with an estimated net worth of 135 million euros ($149 million). That huge figure is not just a reflection of his football talent – although Brazilians see him as the best player in the world already, his confirmation of that status might be a few years away – but rather a perfect storm of contributing factors to create the optimal earning template.

Timing is the most important element of the ‘Neymarketing’ success story. His talent developed and blossomed at a period in Brazil’s history when its economy was on the up, increasing by four percent a year between 2002 and 2010. That allowed him to stay at Santos, his club in Brazil, for longer than other Brazilians normally would before moving to Europe. Neymar’s commercial pull encouraged sponsors to pay his Santos salary, and he only moved in 2013 because it was felt he needed a season facing European opposition to prepare for the challenge of the 2014 World Cup on home soil.

That was the other significant factor of timing for Neymar: the World Cup. Every company wanted to be part of the biggest competition in the world, and it so happened that the home side’s best player and star turn was an advertisers’ dream. Even if the economy was not as strong as it had been, Brazil is a country of over 200 million people and they all need toothpaste, a bank, deodorant or car batteries (he was the face of all those products).

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