An oil scandal is shaking Brazil’s democracy to its core

Dom Phillips – The Washington Post, 7/23/2015

There are times in Brazil’s young democracy — its constitution dates from 1988 — when the country seems to be making things up as it goes along.

This is one of them.

What began in 2014 as a police investigation called “Operation Car Wash” has spiraled into a horrendously dense drama, in which some of Brazil’s top politicians and largest companies have been forced into leading roles under harsh lights.

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Natural energy, artistic development, harmony, and the future of Brazil

Watch EmeraldPlanet’s video here, 7/12/2015

Guests:

Denise Milan, Creator, “Language of the Stones”; Co-Founder/Brazilian Team and Director, “Engage Earth” Art Education Project; Multimedia Artist, Public and Performance Art; Photographer; & Author; Denise Milan Studio, San Paulo, Brazil. (In-Studio)*

Dr. Jerome I. Friedman, Physics Professor Emeritus, and Nobel Laureate 1990 in Physics, Institute Professor, Massachusetts Institute of Technology (MIT), Cambridge, Massachusetts, and Member, Board of Sponsors, Bulletin of the Atomic Scientists, (By Skype)*,

Dr. Jeffreen M. Hayes, Principal, bridge/arts of Chicago, Curator, Scholar, and Educator, (By Skype)*,

Dr. Naomi H. Moniz, Department of Spanish and Portuguese, Brazilian Studies, & Comparative Literature, Georgetown University (Ret.), (By Skype)*.

For reference, also watch Brazil Institute’s Mist of the Earth: Art and Sustainability event here.

Credit-downgrade threat sinks Brazil stocks as Petrobras slumps

Rita Nazareth and Denyse Godoy – Bloomberg Business, 7/20/2015

The Ibovespa fell to an almost four-month low after Finance Minister Joaquim Levy said that a credit-rating downgrade by Moody’s Investors Service is more likely if Brazil doesn’t make economic adjustments.

Traders also pushed down the value of shares after newspaper Folha de S.Paulo reported Saturday that lower house President Eduardo Cunha would rebel against the administration by blocking a package of measures designed to shrink the budget deficit. His announcement heightened a political crisis that had already driven President Dilma Rousseff’s popularity to a record low and revived talks of impeachment.

“A credit downgrade is a big possibility as the government faces many hurdles in approving adjustment measures,” Hersz Ferman, an economist at brokerage Elite Corretora, said in a telephone interview from Rio de Janeiro. “Investors are already avoiding Brazilian assets because of that risk.”

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Brazil stock traders recoil at Volpon’s rate call as real climbs

Denyse Godoy, Paula Sambo, and Filipe Pacheco – Bloomberg Business, 7/21/2015

Brazilian shares dropped to an almost four-month low on speculation borrowing costs at Latin America’s largest economy will increase further, curbing prospects for equities. The real advanced for the first time in four days.

The Ibovespa extended this month’s slump after central bank director Tony Volpon said policy makers should keep raising interest rates until the outlook for inflation reaches the government’s target. The benchmark stock gauge has tumbled 11 percent from this year’s peak on concern the decision to boost the Selic to a six-year high to tame consumer prices will deepen an economic contraction.

“The central bank will probably increase rates again next week in a trend that’s damaging the economy and prospects for companies,” Pedro Paulo Silveira, the chief economist at brokerage TOV Corretora, said by phone from Sao Paulo.

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France, China weigh on Carrefour second-quarter sales, Brazil resilient

Dominique Vidalon – Reuters, 7/16/2015

Carrefour (CARR.PA), Europe’s largest retailer, on Thursday reported a slowdown in second-quarter sales reflecting competitive pressure in its top French market and slumping sales in China amid weak consumption.

Sales however picked up in Spain, the group’s third-largest market, and held up well in a slowing Brazilian economy, unlike those of smaller rival Casino (CASP.PA).

Carrefour, which makes 73 percent of its sales in Europe, is seeking to seal a global revival by focusing on price and cost cuts, expansion into smaller convenience stores, while also renovating its core traditional hypermarket network to boost growth despite weak consumer spending.

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Brazil oil giant faces $98bn shareholder lawsuit in US over corruption scheme

Rupert Neate – The Guardian, 7/10/2015

A US judge has told Petrobras bosses to prepare for a $98bn lawsuit over allegations that executives at the Brazilian oil company and senior politicians were involved in a huge money-laundering and corruption scheme dubbed “Operation Carwash”.

US district judge Jed Rakoff on Friday threw out Petrobras’s efforts to get the case dismissed and told the company and investors who are bringing the class action lawsuit to prepare for trial as soon as February 2016. Senior executives and Brazilian politicians are likely to be called to appear before the New York court, if the case gets the final go-ahead.

Shareholders, led by the UK Universities Superannuation Scheme, which manages the pension funds of British academics, claim they lost billions as a result of the scandal which has been dubbed “Operation Carwash” because huge sums of money were allegedly laundered through a money exchange in a nondescript gas station in Brasília, the Brazilian capital.

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Brazil analysts boost 2016 benchmark rate call for second week

David Biller – Bloomberg Business, 7/13/2015

Brazil analysts raised their 2016 forecast for the benchmark Selic rate as the central bank vows to slow inflation to target by the end of next year.

Analysts increased their forecast for the Selic rate at end-2016 to 12.25 percent from 12.06 percent the prior week, according to the July 10 central bank survey of about 100 analysts published Monday. That’s the second straight increase of analysts’ median forecast. They also reduced their 2016 inflation prediction for the second time, to 5.44 percent from 5.45 percent.

Brazil’s inflation is running at almost double the target as the government raises regulated prices and a weaker currency fuels the price of imports. The central bank, which raised the key rate in the past six meetings, will continue to lift borrowing costs even as the economy heads to its deepest recession in 25 years.

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