March 23, 2015
Vanessa Barbara – The New York Times, 3/23/2015
One Friday night last month, the electricity was off in the streets of Palmeirinha, a favela in Rio de Janeiro. Three black teenagers were joking around in front of their houses. One of them started to run and the others followed, laughing. At that moment, the police came out shooting. Chauan Jambre Cezário, 19 years old, was seriously wounded. Alan de Souza Lima, 15 years old, died on the site with a cellphone in his hands — he had caught everything on video, including his own last agonizing minutes.
According to an official report released the next day, the boys were shot after a confrontation with the police. Officers allegedly found two guns at the scene and charged Mr. Cezário with resisting arrest. The boy, who sells iced tea on Ipanema Beach, was carried to the emergency room and handcuffed to the hospital bed.
Days later, the nine-minute cellphone video went public. Images clearly show that the teenagers didn’t have any guns on them and that there was neither confrontation nor resistance. Seconds after the shooting, a policeman asked why they had been running, to which a bleeding Mr. Cezário answered: “We were just playing around, sir.”
February 26, 2015
Kenneth Rapoza – Forbes, 2/25/2015
For those who like their macro trades to be alluring and exotic, but with an overdose of danger, then Brazil is the place for you. Like Rio de Janeiro itself, pretty but deadly, Brazil has become the hot mess of emerging markets.
Not even Russia, the wild east sanctioned geopolitical disaster zone that it is today, can compare to Brazil. Russia is, well, Russia. It’s always trading at a discount to better managed, diverse and transparent economies like Brazil. But Russia is failing because of geopolitics and oil. Brazil, meanwhile, is shooting itself in the foot.
The most visible problem in Brazil today is the ongoing scandal involving Petrobras. Brazil’s state run oil firm was downgraded by Moody’s to junk bond status on Tuesday. More importantly, the corruption scandal has changed investor perception of Petrobras. It’s no longer trustworthy. Investor sentiment has soured to the point where Petrobras shares have lost 43.6% in the last 12 months. Petrobras’ problems are Brazil’s problems. As the country’s most important company, when sentiment sours on Petrobras, it sours on the political leadership that’s in charge of it. When that happens, investors, like civil society in Brazil in general, lose confidence in government.
February 26, 2015
The Economist (print edition), 2/28/2015
IT IS easy for a visitor to Rio to feel that nothing is amiss in Brazil. The middle classes certainly know how to live: with Copacabana and Ipanema just minutes from the main business districts a game of volleyball or a surf starts the day. Hedge-fund offices look out over botanical gardens and up to verdant mountains. But stray from comfortable districts and the sheen fades quickly. Favelas plagued by poverty and violence cling to the foothills. So it is with Brazil’s economy: the harder you stare, the worse it looks.
Brazil has seen sharp ups and downs in the past 25 years. In the early 1990s inflation rose above 2,000%; it was only banished when a new currency was introduced in 1994. By the turn of the century Brazil’s deficits had mired it in debt, forcing an IMF rescue in 2002. But then the woes vanished. Brazil became a titan of growth, expanding at 4% a year between 2002 and 2008 as exports of iron, oil and sugar boomed and domestic consumption gave an additional kick. Now Brazil is back in trouble. Growth has averaged just 1.3% over the past four years. A poll of 100 economists conducted by the Central Bank of Brazil suggests a 0.5% contraction this year followed by 1.5% growth in 2016.
February 19, 2015
Jeb Blount – Reuters, 2/18/2015
Heavy rains during Brazil’s four-and-a-half-day Carnival holiday offered the first relief in months for the country’s drought-stricken and economically crucial southeast, but was unlikely to end fears of water and electricity shortages.
A cold front along Brazil’s southeastern coast near the two principal cities of Sao Paulo and Rio de Janeiro brought heavy rains on Sunday, Monday and Tuesday to most of the region and the neighboring center-west, home to much of the country’s farm belt.
The southeast is Brazil’s most populous and economically developed industrial region. The southeast and center-west together produce the bulk of such key Brazilian export crops as soybeans, coffee, sugar and orange juice.
February 19, 2015
Chris Wright – Business Insider, 2/15/2015
Tens of thousands of people flooded Rio’s streets Sunday to watch samba dancers in dazzling costumes defy downpours and bare sparkly flesh in a fantasy Brazilians dream of year round.
An estimated crowd of more than 72,000, from great-grandmothers to babes in arms, swayed and cheered on their favorite samba school in hours-long parades in Rio’s annual party to end all parties.
There was thunder, lightning and driving rain pouring on thousands in viewing stands open to the sky. Many wore disposable rain ponchos.
February 12, 2015
Peter Millard and Sabrina Valle – Bloomberg Business, 2/10/2015
Petroleo Brasileiro SA redirected a well at its biggest oil discovery after encountering a pressure zone, underscoring the technical challenges facing the producer’s new management team.
The “drilling phase” of the well at the offshore Libra field hasn’t been halted because of the procedure, the Rio de Janeiro-based state-run company said in an e-mailed response to questions Tuesday. A snag caused the company to halt drilling for more than a week, two people with knowledge of the matter said earlier, asking not to be named because the matter isn’t public. Libra is expected to start commercial output in 2020.
While Petrobras expanded output to a record in December at the so-called pre-salt region that holds Brazil’s largest deposits, it has also run into drilling disruptions in the past. In 2010, it abandoned the first well it started at Libra, citing mechanical issues. In 2011, it briefly halted production at the Sapinhoa field in the same region after a pipe ruptured.
February 12, 2015
Sarah Whitten – CNBC, 2/9/2015
Once known as Brazil’s richest man, Eike Batista has had the biggest drop in net worth of any other billionaire to date. It is estimated that his wealth peaked at $30 billion in 2012, but Batista claims he is now worth a negative $1 billion.
Make that negative $1.2 billion.
Federal Police in Rio de Janeiro seized six vehicles, computers, mobile phones, watches and roughly $32,500 in cash from the business magnate and former race car driver.