US Bank Morgan Stanley Warns Brazil Growth Might Be Close to Zero

    Downtown Sรฃo Paulo, Brazil

    Downtown Sรฃo Paulo, Brazil Brazil's economy could suffer a contraction during two consecutive quarters at the end of 2008 and beginning of 2009, thus suffering a "technical recession" according to a report form Morgan Stanley released in New York.

    The US investment bank is the first to mention the possibility of a recession in Latinamerica's largest economy. However it expects Brazil to expand 2% in 2009, but warns that negative external circumstances could torpedo that prospect.

    "We can't discard a percentage close to zero", said Marcello Carvalho, Morgan Stanley economist, which could then be considered a "technical recession in the coming quarters".

    "The big debate the coming six months is going to be whether it's recession or not and how to get out of that situation, said Carvalho. He explained that the recent economic expansion of Brazil could be attributed to lower interest rates backed on a strong currency which helped moderate inflation.

    But since the beginning of the year the local currency real has lost over 20% of its value to the US dollar because investors are dumping their assets in emerging economies to cover losses in other places.

    Confirming the statement for the sixth month running foreign investors pulled money from Brazil's stock exchange in November reflecting global aversion to risk in emerging markets, according to Sao Paulo analysts.

    Investors sold the equivalent of US$ 481 million more than they bought in stocks last month, BM&Bovespa SA said in a statement posted on its website. That brings the total for 2008 to the equivalent of US$ 10.5 billion.

    The 66-stock Bovespa Index, which gets about half its value from producers of energy and raw materials, fell for a sixth month in November, sliding 1.8% for its longest streak since 1995.

    Commodity stocks including state-controlled oil company Petrobras and second-biggest steelmaker Usinas Siderรบrgicas de Minas Gerais led the decline as oil and metals prices dropped.

    Mercopress

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    • Show Comments (23)

    • dnbaiacu

      Joao..
      Thanks for the insight on Augustus. ๐Ÿ™‚ ๐Ÿ™‚

      Just came from his site. I learned my “tarot card” was the “Sun” for all that’s worth. ๐Ÿ˜€ The Noblesse theory is interesting. Now I understand him more. I see the sense in it.
      If “each one” would “teach one”, the same thing could be accomplished to some degree. I believe in TAKING THE TRUTH TO THE PEOPLE and let them choose. Strangers and acquaintances alike. In the end no one can say they “didn’t know” or weren’t advised. This is how Christ did it. Ultimately the responsibility lies with the individual. I am truly convinced that a spirituality based consciousness will uplift the most “wretched ” soul. ANYONE can take advantage and benefit from spiritual TRUTH. So this of course is where Augustus and I clash. But I LOVE seeing someone firmly established in their position. And not just talking out of the side of their neck like most Bible bashers, usually agnostic, uninformed , that don’t know whether they are coming or going . That usually seem to make the loudest noise about nothing. We have seen them here. ๐Ÿ˜‰
      Augustus is different though. He KNOWS what he KNOWS. Much like Ch.c. And clearly articulates what he KNOWS.
      Stimulating to say the least

    • dnbaiacu

      Joao
      ๐Ÿ˜€ ๐Ÿ˜‰ ๐Ÿ˜€ ๐Ÿ˜‰
      Wow!!! I went to Augustus site!!! I had no idea he was in so deep with his ideaology! I have been debating with a pro of sorts!!??!!!
      I see why you thought my comment was appropriate to post on his site.
      Nothing has changed really. He should take comfort in that. This is still pretty much a feudal society. Lords and serfs. The illusion is that you can be somewhere in between. ๐Ÿ˜‰

    • dnbaiacu

      Ch.c, Joao
      THANK YOU!!! ๐Ÿ™‚ ๐Ÿ™‚

      Not hating on Brazil completely. But it is so much better being realistic about the place.

      Joao.. Feel free to post my comment anywhere you like. I like spreading the truth.
      It’s so frustrating sometimes…. This is why you must get knowledge and use your head.. It is such an uphill battle against society. You believe the lies and you fall right into the trap.

    • dnbaiacu

      Joao….On Egypt
      I understood your satire.. lol

      But for observers my point about Egypt in comparison to Brazil is that there is technically no excuse for Brazils laggin behind the times as “plentiful and abundant as it is”. Simply no exsuse. All of South America in fact is a plantation with the Catholic Church as its’ overseer. It has really been that simple. The leaders of these countries are just “belly warmers” for G7. The children and subsequent slaves are the citizens. Some get household status,, “the elite”. The rest are “field hands”.
      The analogy to “colonial slavery ” is perfect Truly nothing has changed.. ANYWHERE

    • dnbaiacu

      Whoa!!
      [quote]Why drag poor Ch.c into the scene, when he is sitting in his own corner causing no inconvenience to anybody ?
      [/quote]
      I think someone just got CHECKED ๐Ÿ˜‰

    • dnbaiacu

      Will This Ever Happen?….
      [quote]It seems that Brazil’s near term focus needs be the infrastructue that will enable this wealth to be brought to market; roads, ports, aeroports, sewage, schools. Yes and the infrastructure of the Brazilian himself, his education, his schools his physiological and psychological well being. These are the added value products that Brazil can and must produce. [/quote]

      The “elite” have to change . And this is highly improbable. Projects such as the above are longterm. And the evidence shows that the movers and shakers of Brazil are very short term thinkers. No real interest in helping the “masses”. Otherwise with all the “food” it has it’s citizens wouldn’t be in the position it is in.
      Egypt became the worlds first world power EXACTLY because it was on the Nile river. An abundant , lush, liveable place. What has been Brazils problem since the arrival of the Portuguese?…..Pure corruption!!. Now an integral part of the culture. But this is to be expected from a Catholic dominated region. ๐Ÿ˜‰ Apples don’t fall too far from the tree. ๐Ÿ˜‰ ๐Ÿ˜‰
      It’s the rulers. They choose to lie in bed with G 7 oppressors and pretend they will ulitimately feed and educate the masses “one day”..
      It’s always some distant dream.
      Myths are promoted that there is no discrimination against the “colored” public.. The masses. So how can you proceed in any way in a state of denial? There is no real interest in elevating the masses. So they keep the myths alive and continue to exploit.
      This is all so simple. You just have to see through it. The elite promotes a fantasy and steals the money. Didn’t they give the natives …. ‘MIRRORS”??? ( so the story goes)
      Wake up already ๐Ÿ˜ฅ ๐Ÿ˜ฅ ๐Ÿ˜ฅ
      Brazil will experience karma, “cause and effect” , “reap what you sow” just like everyone else .
      Watch and see!

    • Falupa

      Pointing Fingers
      As if Morgan Stanley should be pointing fingers in the first place. They just went bankrupt. The US gov. just had to bail them out. Their credibility and forcast of the future isn’t that credible right now. I don’t know what will happen to Brazil’s economy, but it will most likely be better than that of the U.S.’s economy.

    • Augustus

      JOAO / DNB – THANK YOU, GENTLEMEN!!!
      So far, the only way to make sure one gets the latest version (and I keep on changing – it’s going to be a very dynamic blog), is to access “VIEW MY COMPLETE PROFILE” and click on the word AUGUSTUS (under MY BLOGS) ๐Ÿ˜€
      There must be a simpler way – LOL
      Thanks again for the encouraging words
      I mean to EDUCATE the “masses” and update fellow gentlemen (& ladies – naturally)
      ๐Ÿ˜‰

    • Joรƒฦ’ร‚ยฃo da Silva

      Augustus
      I think we are blogging on real time!

      Try the following link and bookmark it. Also I suggest you use Fire Fox Browser, where the spell checker is an add on:

      [url]http://augustus-99.blogspot.com/2008/12/avid-admirer-of-glorious-nineteenth.html[/url]

      All the nine comments are there, including you reply to Noga (Is she single and eligible?). I honed my skill as how to deal with these “Browsers”, “Add-ons”, etc; with some “Injuns” from Bombay, who by the way were not in harms way. 8)

    • Joรƒฦ’ร‚ยฃo da Silva

      dnbaiacu
      [quote]Wow!!! I went to Augustus site!!! I had no idea he was in so deep with his ideaology! I have been debating with a pro of sorts!!??!![/quote]

      I am glad that you liked his site.You should have posted your comment!!!

      When he came into this site for the first time, I must confess that I thought he was a big snob and hence I was trying to piss him off. ๐Ÿ™ Later on I really started realizing that his theory of “Le noblesse oblesse” (Though Ch.c still insists it is “La Noblesse”) is very sound. What we share in common is that the “Nobility” encouraged building a strong middle class that in turn would better the lives of the “Commoners” with good education, well paid jobs, etc; Lots of well educated Brazilians share his views (like I do). We do not believe in empty promises of the uneducated “elected barbarians”, but do put our faith in strong leaders. Dom Pedro I was a good guy, BUT…..BUT….. he had to go into exile, because of them. :sad:. Like Augustus has gone into exile in NYC.

      Anyway, we are now under the rule of the “Proletariat”, under the blessings of our beloved Rat Singer. As we have discussed before, we are in for a “New World Order” . Now we have to wait and see the drama unfolding from Jan 21st.

    • Augustus

      DNB – JOAO
      DBN / JOAO
      The link provided by Joao-although the same – for some reason does NOT display the entire CURRENT page, which has been much increated
      use this – http://augustus-99.blogspot.com/
      (Not sure why the SAME link – keeps on displaying the contents of existing at the time the link was copied…. strange)
      Make sure you see dec 3 & dec 4 entries

    • ch.c.

      Continued……
      …or continue to swallow your Governments lies as the truth ! But wether you like or not….they will remain TRUE LIES ! SMILES !

      Or if your ego or national pride hurt you too much, then continue to do what you have been doing so far—-do what Ostriches do !

      But in both cases it still wont show the truth which is much darker than what you are told !

      ๐Ÿ˜€ ๐Ÿ˜‰ ๐Ÿ˜€ ๐Ÿ˜‰

    • ch.c.

      build infra-structure!!! The existing roads, ports, and energy plants are deteriorating, and there are hardly any railroads across the national territory… As such,
      Welllllll…you said it in your own words !
      Everybody knows your problems, even the politicians and the government !
      What have they done, what are they doing, what are they going to do ?
      Simple : MORE PROMISES !

      TRY to get that one now :
      There is Noooooo wayyyyyy, absolutely None, that a country can build a good infrastructure…WITH SUCH HIGH BORROWING COSTS…SUCH AS IN BRAZIL !
      Infrastructure is very costly and need LONG TERM BORROWING AT ACCEPTABLE INTERESTS RATES !
      Therefore how could Brazil build infrastructure when their 8 years government bond rates are at 15,5 % in an inflation environment of around 4-6 % ?????????

      Let me give you aa good one on what the EU did in 2003-2004 when their rates were very low :
      Some countries such as France, UK, Spain and large European Supra National Agencies issued 50 years bonds at around 3 % !
      What have they done with that money ? Infrastructure…of course !
      From where the money came from ? From pensions funds, banks managed accounts….OF COURSE ! Because not even an idiot investor would buy such bonds by his own…of course !
      But is not with WE THE PEOPLE MONEY that a country infrastructure is built ? Of course it is ! How could it be different ?

      And in Brazil they do the EXACT OPPOSITE :
      They reward the pensions funds and the minority elite with the World Highest Interests Rates…after inflation !
      To the tune of around 10 % above inflation on long rates !!!!!

      And it is not any different in the Brazilian Real Estate :
      How can possibly a healty real estate market develop LONG TERM when Mortgages rates are at 13-15 % with inflation at 4-6 % ?????
      Noooooo way someone having to pay 8-10 % mortgages rates ABOVE inflation is going to do well LONG TERM !

      Conclusions :
      – YOU SHOOT IN YOUR OWN GOALS…TIME AND AGAIN…TIME AND AGAIN ! BRAZILIANS ARE MAY BE THE WORLD CHAMPIONS IN FUTBOL, BUT FOR SURE THE WORLD CHAMPIONS IN….AUTOGOALS !!!!
      – Brazil has the perfect economic model…FOR SECULAR FAILURES !

      Last but not least :
      – Brazil is a FOURTH WORLD COUNTRY in infrastructure. The vast majority of emerging nations have a much better infrastructure than Brazil….even those with a much lower GDP per capita than…. Brazil !!!!! Re-read above explanations as to the whys and why it is so obvious…AND CANNOT be different in real life….except with lies, hides and promises !

      Examples in percentage of paved roads, using World CIA factbook numbers :
      – BRAZIL 5 %
      – Cameroon 10 %
      – Burkina Faso 4 %
      – Haiti 25 %
      – Sudan 36 %
      – Somalia 12 %
      – Tanzania 8 %
      – Guatemala 34 %
      – Nicaragua 12 %
      – Ecuador 15 %

      Dont you have a mixed of blue and red face, reading these REALITIES ????? oF COURSE YESS ! TRUTH HURT YOUR EGO AND NATIONAL PRIDE !

      Ohhhhh….I have been nice, very nice, I just showed VERY POOR COUNTRIES…..FOR COMPARISONS WITH BRAZIL NOT SUCH A POOR COUNTRY !!!!!!
      It could only be worse with other emerging nations not as poors as the one stated above…and against whom you already lag by much except with Burkina Faso !!!

      Dear brazilians,
      As stated so many times, STOP CARESSING YOUR NAVEL, START SCRATCHING YOUR HEAD !
      STOP SWALLOWING YOUR GOVERNMENT CHEATINGS, HIDINGS AND LIES !
      YOU HAVE BEEN BRAINWASHED !

      FACTS WILL ALWAYS REMAIN FACTS…regardless of the fairy tales that you were told thousands of times. Because that is the EXACT way to brainwash people : just tell them thousands of times the same lies !

      Hip hip Lula, hip hip Lulaa, hip hip Lulaaa !!!!

      ๐Ÿ˜ฎ ๐Ÿ˜ฎ ๐Ÿ˜ฎ ๐Ÿ˜ฎ ๐Ÿ˜ฎ ๐Ÿ˜ฎ

    • Augustus

      joao- no joke
      I have sent you information elsewhere!!!

    • Joรƒฦ’ร‚ยฃo da Silva

      dnbaiacu
      [quote]I understood your satire.. lol

      But for observers my point about Egypt in comparison to Brazil is that there is technically no excuse for Brazils laggin behind the times as “plentiful and abundant as it is”. Simply no exsuse. All of South America in fact is a plantation with the Catholic Church as its’ overseer. It has really been that simple. The leaders of these countries are just “belly warmers” for G7. The children and subsequent slaves are the citizens. Some get household status,, “the elite”. The rest are “field hands”.

      The analogy to “colonial slavery ” is perfect Truly nothing has changed.. ANYWHERE[/quote]

      Thank you my lad for understanding my point of view. Your comments make lots of sense and deserved to be posted in another favorite “Blog Spot” of mine:

      [url]http://augustus-99.blogspot.com/2008/12/avid-admirer-of-glorious-nineteenth.html[/url]

      Of course I would never post it without your permission. So you better do it yourself. ๐Ÿ˜‰

    • Augustus

      ch-c & infrastructure
      What Brazil really requires (in addition to fight great corruption, huge inequality, and shameful exploitation of minors and its indigenous Amazonian peoples) is to build infra-structure!!! The existing roads, ports, and energy plants are deteriorating, and there are hardly any railroads across the national territory… As such, I fail to see the reason behind so many misleading editorials in Brazzil.com which tend to provide a myth rather than a vision!
      [quote]why not INVEST in railroads ? That would LOWER transportation costs quite a lot for your cheap and voluminous grains, cattles, iron ore, sugarcane etc etc etc ![/quote]

    • Augustus

      JOAO – WISE WORDS
      Indeed, the Egypt which became a great power was far wiser than the current nation which bears the same name (and approximately the same location)… The ancient Egyptians appear to have a much greater understanding of the potential power of the planet (constructive & destructive) and, as Joao suggested were better poised to deal with nature
      [quote]It is very dangerous to live by the river, even if it is “abundant,lush and livable” as we finally discovered in the 21st century. Probably the ancient Egyptians knew better about construction of dams, ports, dredging,etc; to avoid their properties from getting flooded or buried underneath the mudslides.[/quote]

      As for the editorial under consideration, I fear that Morgan Stanley is likely to be correct, for I cannot foresee any Latin American economy to experience growth under the current deteriorating circumstances… Furthermore, I tend to defer to ch-c’s expertise in economic matters, for he is the expert.

    • ch.c.

      To Falupa and Dutch
      Falupa
      Yeaahhhhh….where did you get the news Morgan Stanley…JUST WENT BANKRUPT ? smiles

      Dutch
      And what about YOU the Oracle and President of
      The Brotherly Love, Freedom and Diversity party (PNVD) that was launched in May 2006 and its campaign for a cut in the age of consent from 16 to 12 and the legalisation of child pornography and sex with animals ????

      For Brazilian readers, this is a real DUTCH politicial party with their real intentions to pass as law.
      In dutch it is called…….Naastenliefde, Vrijheid en Diversiteit

      Red faced ?
      You better be !

      No doubt the Dutch is the most happy guy in….Brazil with their 900 municipalities openly offering SEX WITH MINORS !!!!

      ๐Ÿ˜ฅ

    • Joรƒฦ’ร‚ยฃo da Silva

      [quote]Egypt became the worlds first world power EXACTLY because it was on the Nile river. An abundant , lush, liveable place. What has been Brazils problem since the arrival of the Portuguese?…..[/quote]

      It is very dangerous to live by the river, even if it is “abundant,lush and livable” as we finally discovered in the 21st century. Probably the ancient Egyptians knew better about construction of dams, ports, dredging,etc; to avoid their properties from getting flooded or buried underneath the mudslides.

      [quote]Pure corruption!!. Now an integral part of the culture.[/quote]

      Our “rulers” are very “cultured” then. ๐Ÿ˜‰

    • ch.c.

      To the ididot “it is over the next twenty years food, fuel, commodities that is in short supply.”
      Old theory from a junkie not even knowing what he is talking about !
      Just look at all these prices——NOW !!!!!!
      Grains always had large up and downs for the last 100 years or so !
      Same for oil. I just remind you dear idiot that the new oil discoveries in Brazil are VERY VERY VERY deep. Actual proven oil reserves in many many many oil producing countries ARE CHEAPER TO DEVELOP ! Why bother with the most expensive ??????

      And dear idiot, without more advanced seeds, pesticides, fongicides…HOW IS Brazil going to increase productivity ?????

      In my view dear idiot, it could be areas to make HEAVY INVESTMENTS FOR THE LONG TERM !!!!!!
      And who do you think is going to benefit the most ? Monsanto, Syngenta, Bayer, ADM, Pioneer Hi-Bred or the brazilian farmers ???? Are you so sure that these companies develop newer products for Brazilians only ? Or for World farmers ??????

      Idiots will remain idiots, you just proved it !

      And what about investing in newer cell phones ? I bet Brazil doesnt has the smallest idea !
      And what about investing in newer drugs ? I bet Brazil doesnt has the smallest idea !!!
      And what about investing in newer cars ? I bet Brazil doesnt has the samllest idea since YOU dont even have a Brazilian carmaker.
      You even lag Russia, India and China….which ALL have ALSO their own carmarkers….if you did not know !!!!!!

      Let me give you a good one on Brazilian trucks production : in 2007 you finally produced 5000 more than your previous record….30 YEARS EARLIER !!!!!! Whoaaaaaaaa….great isnt it ?????

      Ohhhhhh dear idiot and what about some LONG TERM HEAVY INVESTMENTS IN INFRASTRUCTURE ???????
      Brazil has only 5 % of paved roads…….Waaaayyyyyyyyyyyyyy less than MOST emerging nations even much poorer than Brazil !
      For 30 years there were promises to pave BR 163 ! In 2008…….still in the promises !!!!!

      From Mato Grosso, 1200 kms to port, the transportation cost is US$ 130.- per ton. For corn selling at around US$ 150.- PER TON F.O.B. PORT ! Meaning your Mato Grosso farmers should get US$ 10.- per ton that must include all the production costs, machinery, fertilizers, pesticides, fongicides, fuel, spare parts, tractors, harvesters, amortization,bank interests, etc etc !!!!!! OK OK…before Government
      subsidies !!!!!
      Do your basic maths….IDIOT !

      I bet the cheapest Chinese watches are more profitable and less capital intensive ! But Brazil cant even produce ONE watch !!!!!!

      And why not INVEST in railroads ? That would LOWER transportation costs quite a lot for your cheap and voluminous grains, cattles, iron ore, sugarcane etc etc etc !!!!!!

      Even most of your tractors and harvesters are made by foreign firms….in Brazil !

      Brazil is NIL !

      As I wrote so many times if one is bullish on World grains prices and sugarcane & ethanol …buy shares in Monsanto, Syngenta, ADM, Bayer, Bunge, John Deere and many other tractors and harvesters producers !!!!!

      Laugh….laugh….laugh….laugh…laugh !

    • dutch

      In this added value theory of yours, what exactly is Brazil going to make that does not already exist in the world. Watches, farm machinery, milling equipment, computer chips. Your theory of the greater weakness of Brazilian economics, being firstly that Brazil does not produce added value products for export and secondly that the government itself is a hinderence to economic strength does not understand that it is overthe next twenty years food, fuel, commodities that is in short supply. The world does not need any more watch manufacturers, or widget engineers, the Swiss,the Germans, the Japenese and the Chinese are fully involved; but the world does need beef, chicken, soy, ethanol, oil, iron ore, water, aerable land; all of which Brazil has in abundance. It seems that Brazil’s near term focus needs be the infrastructue that will enable this wealth to be brought to market; roads, ports, aeroports, sewage, schools. Yes and the infrastructure of the Brazilian himself, his education, his schools his physiological and psychological well being. These are the added value products that Brazil can and must produce.

    • dutch

      You sir are the Buffet of Brazil, the Oracle of Omaha, the Maven of Manaus and the the Babeldom of Bovespa.

    • ch.c.

      The 66-stock Bovespa Index, which gets about half its value from producers of energy and raw materials
      And the other 50 % with LOW ADDED VALUE PRODUCTS…LEAVES LITTLE FOR MORE ADVANCED AND HIGHER VALUE GOODS OR SERVICES !!!!

      Simple as that ! Isnt it ?
      NO ?
      Then spell the name of the company included in the 66-stocks Bovespa Index !
      Harder to answer ! Isnt it ?

      Time to invest HEAVILY for the long term…..longer than the 3 to 5 years BRAZILIAN MAXIMUM time horizon !

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