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69% Positive: Brazilian President Rides Popularity Wave

Brazil president Luiz Inácio Lula da Silva Luiz Inácio Lula da Silva, the Brazilian president, celebrated "Brazil's newly acquired investment grade condition, which is a magnet for foreign investment by saying: "Brazil is a serious country, with serious policies, which looks after its finances seriously, and that is why we now have achieved the international trust, which Brazil was after for a long time."

Lula, however, cautioned that the credit rating can be considered "optimum" but it can also attract a greater influx of US dollars, which is not necessarily positive.

"Many dollars can pour into Brazil, and since the American dollar is devalued against the real, this can be bad for the economy," said the presidenet during the opening of a development office in the Northeast of the country, from where he originally migrated as a child to São Paulo.

"I must confess that when I left Garanhuns (in the Pernambuco state) in 1952 I never imagined that the day would come when Brazilians would have to be concerned because of the massive influx of US dollars to Brazil".

Given the boom-bust performance of the Brazilian economy in the last few decades and the total discredit of the credit rating agencies particularly in anticipating the US mortgage crisis, Lula also made some ironic comments.

He revealed that a few days ago during a cabinet session he joked about which was the credit rating agency that was looking at the performance of the US economy and risk, "because in spite of the current crisis, the IMF and other agencies did not anticipate, predict or warn us about what was happening."

The investment grade rating comes at a moment when Lula da Silva is riding on a wave of satisfaction among most Brazilians.

According to an Instituto Census public opinion survey, 69.3% of respondents approve the performance of Lula da Silva (compare this to the 71% disaproval rate for US president, George Bush), up 2.5 points from the previous poll from February.

Lula won the presidential election October 2002 with 61% of the vote and in October 2006 was reelected with 60.8%.

Although his Workers Party, (PT) in 2006 was affected by a series of corruption scandals the former union leader continued to lead a strong economy with conservative fiscal policies begun during his first mandate. He has also been praised for his poverty-reduction initiatives.

But some of his former Socialist political allies are not at all satisfied with his U turn and conservative, free market, private initiative approach to economics.

They admit he has been described as the "father of the poor" because of his programs to alleviate indigence, but they also call him the "mother of the banks", since the financial system has never been so profitable in Brazil's recent history.

Mercopress

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    Who in Brazil’s Pantheon can fly an Ebraher jet? Anyone in government have the accumen on how to make one. Any one hold an advance degree?
    You want to see the investment grade fall, watch Lula dance with a third term, modifying the constitution to keep in step with the formula for failure long embraced by those of the Southern Hemisphere, from man to ubermeunch, all hail the Pizza Patron. Yeh the money is good, but where is the education, human rights, transparency under the law, a free press? Lula is riding Achems razor blade of life, he currently plays piano with 9 fingers, hows his son doing out of prison, what happend to all the police work? It ended in Pizza of such ingredients that it makes the land of the lotus eaters, in opium dreams of grandeur. Brazil is a silly country because it has been run by silly men. A fifth estate and a transparent Bovespa and a squeaky clean justice system, is what we need not a third term of the bus driver.

  • ..

    Simpleton
    [quote]Is it too late?[/quote]

    I don’t think so. If I were you, I would not bet too much money on the Stock exchange, unless you are super rich like Ch.c. Remember Ch.c bought his government bonds in 2005 when the exchange rate was around almost 3 Reais a dollar and with the interest he earned, he subsequently bought a farm land. I think that investment in farm land is a very good one in the long run, especially due to the global food crisis. If you concentrate on cultivating exotic crops (and not sugar cane or soya!), for exports, you may end up getting more return in the long run.

    Ch.c mentioned two things interesting and I tend to agree with him:

    a)[quote]Foreign money takes time to get in, but quits much faster when the wind will turn.
    And guess whan then happens ! Just review your previous historical economic and currency cycles. [/quote]

    b)[quote]Is Brazil not nicknamed a BOOM AND BUST ECONOMY ?[/quote]

    As you know, Forrest has food growing farm in PB and Bo has beach front properties in SE. The value of the land appreciates, but the currency depreciates. As an old banker friend of mine told me a few months back, BOVESPA is for people with lots of money and not for small investors.

    btw, in 1990, my father-in-lawÀ‚´s (he passed away in 1995) entire savings were confiscated and returned in 12 monthly installments after 18 months. In terms of original dollar value, it was almost 25% when he got back.It happened to millions of Brazilians who lost faith in the famous “Caderneta da PoupanÀƒ§a”

    Brasil is indeed blessed with a large cultivable land and I think it is silly NOT to use it feed our people and the ones overseas and instead to produce ethanol.The southern part is so lush and fertile that I get amazed when I travel into the rural areas where the populace is self sufficient in the food production and the prices are not that high compared to large capitals.

  • Simpleton

    Is it too late?
    So I couldn’t find one inteligent AND honest person to help me back in 2005. Now with a little experience I think I can manage to pull things off without either. C&H (ch.c), is their still some sugar letf (norweigen leftsa?) to be had? With the market turmoils, exchange rate debauchery, dengue, etc., etc., I not certain that I still have the stomach for the lucrative but if you tell me I can still get 7-9 percent above refration for a reasonable length of time I’m all ears and all in.

  • ..

    [quote]to the ghost guest …… Àƒ¼Àƒ¼Àƒ¼Àƒ¼Àƒ¼[/quote]

    Gut die Bilanzanalyse.GlÀƒ¼ckwÀƒ¼nsche. 😉

    [quote]”father of the poor” [/quote]

    Me, no way!

  • ch.c.

    to the ghost guest …… Àƒ¼Àƒ¼Àƒ¼Àƒ¼Àƒ¼
    You cant be the mother of the banks and the father of the poors.
    Because one cheat and steal the other….by definition.

    I am an opportunistic investor. But it is of no help to your society, except to the the minority elite, to offer government bond rates at 7 to 9 % above inflation.
    Not one country in the world, developed or not, is offering such rates.

    As to your banks, they are taking you even more for a ride than your government.

    They are lending you money at 3 to 5 times….MINIMUM…their own already high borrowing rates.
    On the overdrafts, they even charge you 9 to 11 times their borrowing rates.

    And guess what : you applaude both your government and banks policies !!!!!

    Conclusion : your government, your banks and your society are totally insane.
    No doubt that there are no deeper masochists on earth than……Brazilians.

    And with insane and masochists people, there is always money to be made…for a while….until the bubble burst !
    Foreign money takes time to get in, but quits much faster when the wind will turn.
    And guess whan then happens ! Just review your previous historical economic and currency cycles.

    Is Brazil not nicknamed a BOOM AND BUST ECONOMY ? “father of the poor”
    😀 😉

  • ..

    [quote]This said, as long as you a foolish enough to pay these rates…..I am a buyer !
    And I bought tons of your long term government bonds and corporate bonds….in Brazilian Reals….in 2005 !!!!!

    Continue to be as crazy as you are……I will be richer without taking undue risks…year after year. [/quote]

    If you are going to be richer year after year, why are you bitching about the Brazilian governmentÀ‚´s economic policies? Just read the last paragraph of this article:

    [quote]They admit he has been described as the “father of the poor” because of his programs to alleviate indigence, but they also call him the “mother of the banks”, since the financial system has never been so profitable in Brazil’s recent history.[/quote]

    You should learn to love our Presidente for making you richer “year after year”!

  • ch.c.

    “”Brazil is a serious country, with serious policies, which looks after its finances seriously,”
    Soooooo right.
    Here you have a country….with the world highest interest rates….. after inflation !
    Your SELIC rate at around 6-7 % ABOVE inflation and long term government bonds at 8-9 % ABOVE inflation.

    In my view…..these rates cant be from a serious country, with serious policies and looking after its finances seriously”
    This said, as long as you a foolish enough to pay these rates…..I am a buyer !
    And I bought tons of your long term government bonds and corporate bonds….in Brazilian Reals….in 2005 !!!!!

    Continue to be as crazy as you are……I will be richer without taking undue risks…year after year.

    God Bless….these stupid borrowers !

  • JDS

    [quote]They admit he has been described as the “father of the poor” because of his programs to alleviate indigence, but they also call him the “mother of the banks”, since the financial system has never been so profitable in Brazil’s recent history.[/quote]

    He reminds me of another President who was also called the “father of the poor” and the “mother of the rich”. I am sure our distinguished Brazilian bloggers know the name of that President!

    [quote]A fifth estate and a transparent Bovespa and a squeaky clean justice system, is what we need not a third term of the bus driver.[/quote]

    A correction:Our Prez was NOT a bus driver,but a lathe operator.

  • ..

    [quote]Brazil is a silly country because it has been run by silly men. [/quote]

    Don’t be silly. There are some silly women also in the government.

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