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Brazil Has No Fears, Says Lula. But Foreign Investors Are Fleeing

São Paulo stock exchange Bovespa in Brazil Brazilian President, Luiz Inácio Lula da Silva, reaffirmed today how solid is the Brazilian economy, ruling out any negative impact on Brazil from current American financial market woes. As for the fall of the real vis À  vis the dollar, Lula told reporters that this is just part of the economy's normal adjustments.

"The American turbulence is not going to cause trouble to Brazil," said the president in the Itamaraty, Brazil's foreign ministry's Palace. And added:

"We really have balanced accounts, and our reserves are enough. What's important is that the dollar gets adjusted as long as the economy requires changes. That's why we call it floating dollar."

The president ruled out any government intervention to contain the rising American currency.

Meanwhile, the São Paulo Stock exchange (Bovespa) closed over 3% lower, this Wednesday, August 15, on the wake of Wall Street's decline. With this result, the Brazilian stock market has already fallen 9% this month of August.

Ibovespa, Brazil's main stock market index, dropped 3.19% to 49,285 points. This was the fifth day in a row that the Ibovespa fell taking the stock market to its lowest level since April 30 when it closed at  48,956 points.

The Bovespa has already closed in the red twice this year: in February (-1.7%) and July (-0.4%).

The dollar, on the other hand, keeps going up closing at 2.03 reais for one US dollar. This was the first time in three months that the American currency was over 2 reais.

Economist Sérgio Manoel Strap, an analyst with the LLA Investments, is betting that some investors are coming back now  to take advantage of the stocks' lower value, after weeks in which the most used verb was: sell.

Foreigners have being pulling out from the Brazilian stock market. In the first ten days in August alone, foreign investors have withdrawn over 1.6 billion reais  (US$ 820 million) from the São Paulo stock market.

The American mortgage crisis had already taken out 3.2 billion reais (US$ 1.6 billion) from Bovespa in July, a record amount for fleeing money.

The balance of foreign investments in the stock market for the year, however, is still US$ 20.8 billion in the black thanks mainly to foreigners participation in IPOs (Initial Public Offerings). They invested US$ 25.8 in Brazilian companies, 73.1% of all the money applied in these IPOs.

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  • Show Comments (15)

  • Brazilian Dude

    conceicao…
    have you read about the functionalities of the tongue-loosening gadgets? They are sort of spread around in other threads…fun stuff.Can really be the life of the party 😉

  • João da Silva

    ConceiÀƒ§Àƒ£o
    [quote]I am beginning to understand why they call the case officer assigned to this matter Stalinho.
    [/quote]

    A correction. The name of the case officer is not,repeat,not Stalinho. It is Genghis Khan 😉

  • conceicao

    This is all so educational. The concept of the helmet, for example, gives the term “gadget-head” a whole new meaning. Something I am unclear about, however, is whether, if you import the helmet
    to, say, an English-speaking country, is it still appropriate to yell “cabeca” like a football announcer when administering the helmet on a subject for the desired effect?

  • João da Silva

    [quote]Otherwise, well, fear not. Other creative information-gathering apparatti are in R and D.Haven’t told you about the Nutcracker yet, have I?
    Oh, he’ll talk, don’t you worry!
    [/quote]

    When the Swiss produce armaments and sell all over the world,why cant we export our gadgets. Theirs is mass killing ones and ours is just to extract information.ie; to promote the concept of “Freedom of Speech” 😉

  • Brazilian Dude

    JoÀƒ£o,Maybe…
    Combination therapy would be in order. The H and E Pliers, the Cuecas of Agony and the Helmet of Recollection , when used together, just might make the Predator himself turn into a vegan…
    Maybe it might revert the severe brain damage suffered by the massive chocolate ingestion indulged in by the Swiss Junkie.
    😉
    Otherwise, well, fear not. Other creative information-gathering apparatti are in R and D.Haven’t told you about the Nutcracker yet, have I? 😉
    Oh, he’ll talk, don’t you worry! 🙁

  • Shelly

    Hypocrisy!!!
    Swiss banks are full of “blood money” from around the world. A country with double standards. American turbulence??? I beg your pardon, this is a crash and Bush is where??? And the FED??? This is a little story from my manager at the BB&T bank: a lady put 10% down to buy a house, next day she called the mortgage company and guess what happened? IT DISAPPEARED. Do you call that turbulence?? Gimme a break, this is a disaster with jobs being lost and people having no where to turn. And IRAQ? How many died? I am sick and tired of people calling this financial crisis a turbulence…

  • conceicao

    I am beginning to understand why they call the case officer assigned to this matter Stalinho.

  • João da Silva

    Brazilian Dude
    [quote]The use in hydrophobic subjects is poorly documented… [/quote]

    All the more reason to shoot him,if he doesnt cooperate.Better not depend on poorly researched and ill documented experiments. When in doubt, opt for Termination with Extreme Prejudice (after giving 48 hours for them to appeal). Remember, we are peace loving people who believe in Democracy and Freedom of speech.But, if the suspect doesnt want to talk after wearing the Helmet, how else can we teach him about these two important values 🙁

  • Brazilian Dude

    Ahh, a chance to use the Helmet!
    however, maybe in his case it will have unpredictable results.The use in hydrophobic subjects is poorly documented… 😉

  • João da Silva

    Brazilian Dude
    You better lend all the “gadgets” to ConceiÀƒ§Àƒ£o and call in our Economic Warefare officer in the blog and track down ch.c.

    Where the hell is he?

  • Brazilian Dude

    I reiterate:
    Ch.c, check wih your physician for some Zyprexa…

  • conceicao

    It is now revealed: a coordinated plot by the Swiss – involving not only the highest reaches of the Lula government but also certain posters on this blog – to control and manipulate the Brasilian gasahol industry. It seems to be a kind of good cop / bad cop thing with Lula on one side and Ch.c on the other. God help Cosan.

  • João da Silva

    [quote] am especially fearful about Cosan. Its chief financial officer has an M.B.A. from the International Management Institute of Switzerland. [/quote]

    Oh,my God, I didnt know about it! Now, what are going to do? 🙁

  • conceicao

    I am especially fearful about Cosan. Its chief financial officer has an M.B.A. from the International Management Institute of Switzerland. The entire company is stuck in Alpine mud.

    LAUGH LAUGH LAUGH LAUGH LAUGH

  • João da Silva

    Ch.c
    [quote]Brazil Has No Fears, Says Lula. But Foreign Investors Are Fleeing [/quote]

    Why are you fleeing? Because of the violence or since BOVESPA is coming down?

    Have no fear. Flutter hearts never conquered an empire 😉

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