Brazil Stock Market Tumbles Another 6.7% for a 28% Loss This Year

    Brazil's Stock Exchange, Bovespa

    Brazil's Stock Exchange, Bovespa Once again, this Wednesday, September 17, stock markets across Latin America suffered a beating amid growing anxiety about turmoil in the US financial sector expanding globally and ever-tightening credit conditions.

    In São Paulo, in the Brazilian Southeast, the Bovespa index fell 6.7% to 45,908.51, the benchmark's first close below the 46,000-points level since mid-August 2007 and accumulating a 28.14% loss so far this year.

    Mexico's IPC index dropped 4.7% to 23,456.84, its worst closing level since October 2006. The market was closed Tuesday for the Independence Day holiday.

    Argentina's Merval index tumbled 5.1% to 1,491.98, its minimum since December 2005. This means Argentine equities have lost 9.45% in three days, 16.05% in the month and 30.66% so far this year.

    Chile's IPSA lost 2.6% to 2,688.85 while the peso closed at a new 19-month low against the dollar. The peso has weakened by some 21% against the US dollar since the central bank introduced an 8 billion currency intervention in April that involves daily purchases of 50 million US dollars.

    Heavyweights in all markets were hit. Brazil's mining firm Vale (RIO) stumbled 7.7% and state-run oil giant Petrobras dropped 4.8%.

    In Mexico City, Telefonos de Mexico and retailer Soriana were the only stocks of the 35 that make up the IPC index that posted gains. Shares of the fixed-line operator TMX picked up 0.3% and Soriana rose 0.1%. Volume leader America Movil fell 2.7%, and Wal-Mart de Mexico dropped 1.4%.

    Banking and real estate shares fell sharply. Brazilian home builder Rossi Residencial and Mexican real estate development firm Corporacion Geo led decliners with shares of each company down 17%. Brazil's Banco Bradesco (BBD) fell 5.1% and Mexico's Inbursa finished 6.8% lower.

    Argentine pulp and paper firm Celulosa Argentina shares fell 6.9% and steel tube producer Tenaris (TS) skidded 4.3%. Chilean chemical firm Sociedad Quimica Y Minera (SQM) lost 5.5% and Enersis (ENI) fell 3%.

    However since the "worst is still to come" analysts anticipate that investors pulling cash out of portfolios tied to Latin America could further erode the external accounts of some of these emerging market economies already suffering from declining commodity export revenues and soaring import costs.

    A net US$ 2.8 billion was withdrawn from Latin American equity funds year-to-date through September 10, according to Boston-based fund tracker EPFR Global. This could hurt economic growth in the region.

    The collapse in Latinamerica was in line with the shake-up on Wall Street. The Dow industrial dropped 4.1% and the S&P 500 Index fell 4.7%. The tech-heavy Nasdaq Composite dropped 109 points, or 5%, to 2.098.85, the index's worst one-day decline since Sept. 17, 2001.

    A jump in crude-oil prices also pressured equities and prompted safe-haven flights to gold. Gold prices skyrocketed by US$ 70 an ounce to US$ 850.50, the metal's biggest daily gain ever in dollar terms.

    Mercopress

    Tags:

    • Show Comments (24)

    • dnbaiacu

      Vinny is Cool
      [quote I have to monitor things extra closely since Sec. Paulson’s left turn into corporate socialism yesterday.][/quote]
      And he understands “exactly ‘ what is going on..
      CORPORATE SOCIALISM.
      It is just going to keep happening and happening. Disguised as “aid”.

    • dnbaiacu

      Between Vinny And Joao…
      I say you have it figured out QUITE well.
      Now I am interested in how Vinny “positioned” himself
      [quote]I saw this coming as well as millions of others and positioned myself accordingly. [/quote]
      THIS would be a fruitful discussion 🙂 😉
      [quote]. If you all remember the last time this was done, it was followed by a pretty nasty recession. [/quote]
      I would also like more enlightment on this period to research, as I may have been too young to understand or not even “thought of ” yet 🙂

    • jtdangerfield

      The financial markets
      This is a terrible time for the markets. It just proves how things haven’t flattened out yet. Investor fears or going to be much worse in coming months. Eventually it will all blow over and confidence will settle yet again. For the time being, however it is still up in the air as to whether or not the

    • VinnyCarioca

      Joao, my dear fellow……
      Re: Vinny, my dear fellow, if you had told us before that you have a Brazilian wife, we would have treated you with more respect which you richly deserve.

      I can not imagine being treated with more respect than I have received thus far. I truly believe that decency is the greatest strength in existence and I look forward to sharing my opinions with you all (especially the ones you were concerned I would be intimidated by, and, haven’t addressed me directly yet).
      This forum exudes class and very thoughtful insight from the broad spectrum.

      Re: But..But.. why would your wife like to call you a “Mongol”? Please do enlighten us all.

      3/4 refined gentleman, 1/4 troglodyte. But.. but.. wacky sense of humor, gigantic heart, lots of kisses (she literally has to push me away), speak before I think, shirt off my back (is that an American saying?) , stubborn, sometimes combative, sometimes impatient, right wing you know what.

    • João da Silva

      VinnyCarioca
      [quote]Thank you for the kind words. Nice change – my beautiful Brazilian wife likes to call me “Mongol”. All in good fun. [/quote]

      Vinny, my dear fellow, if you had told us before that you have a Brazilian wife, we would have treated you with more respect which you richly deserve.

      But..But.. why would your wife like to call you a “Mongol”? Please do enlighten us all. 😀

    • VinnyCarioca

      dnbaiacu
      Re: Vinny is Cool

      Thank you for the kind words. Nice change – my beautiful Brazilian wife likes to call me “Mongol”. All in good fun.
      The U.S. stock market plummeted again today. The vast majority of taxpayers are vehemently opposed to the government throwing $700 Billion dollars to prolong the inevitable while continuing to debase the U.S. Dollar.
      Look for more short squeezing later in the week as Paulson & Co. tout the demise of free market capitalism.

    • JAY GLENN

      DOWN 28% DOW JONES down 16.9%
      BRAZIL IS LEADING THE WAY?
      GO BRAZIL
      1.9765 USD/BR

    • VinnyCarioca

      dnbaiacu and Joao
      I say you have it figured out QUITE well.
      Now I am interested in how Vinny “positioned” himself

      I subscribe to advanced technical analysis and acted on a market “sell signal” in early May. Went to Money Market accounts as well as short positions for the Dow, S&P and Emerging Markets. Paid off rather nicely but I have to monitor things extra closely since Sec. Paulson’s left turn into corporate socialism yesterday. He said it was done to prevent a complete meltdown in the global economy.

      Right. It is VinnyÀ‚´s turn to express his opinion (freely) and I hope he doesn’t get intimidated by Ch.c ,Lord Augustus and for that matter by YOU.

      Sorry I can’t reply sooner. In New York visiting family . Please don’t be concerned about me being intimidated. I have had very substinative discussions with a large number of erudite people (such as yourselves) and I’m very comfortable expressing my opinions. The best discussions I have had were with people whom have polar opposite beliefs than myself. The respectful tone of this forum is most enjoyable.
      Stay well.

    • João da Silva

      dnbaiacu
      [quote]THIS would be a fruitful discussion[/quote]

      Right. It is VinnyÀ‚´s turn to express his opinion (freely) and I hope he doesn’t get intimidated by Ch.c ,Lord Augustus and for that matter by YOU.

      BTW, you have been learning bad things from Ch.c 😉

    • João da Silva

      Dear all,

      Do you think that Ch.c is trying save the Global Financial System, single-handedly ? 😉

    • João da Silva

      VinnyCarioca
      [quote]Emerging markets like Brazil will be get the worst of it. [/quote]

      I think so, because our consumers instigated by our government, advertising agencies and the banks are going into a “Charge of the Light Brigade”, without learning anything from the experience of the Americans. Consumerism , Credit Cards, payment for white goods in 12 monthly installments, purchase of cars in 100 installments ( in spite of our highways falling into pieces), etc; Wow, is it not exciting?

      BUT..BUT..BUT (pardon me to imitate our Swiss blogger), I & C in BRIC are more disciplined and have a strong manufacturing base (Which B decided to wipe out, opting to concentrate more on exporting commodities). I am afraid that Brazil is going to pay the price in 2009. May be I am wrong, but there again, I am not a fortune teller.

      [quote]Stay well.[/quote]

      Thanks and you too. Stay in touch. You are a good addition to this forum.

    • VinnyCarioca

      Joao, my dear fellow………
      Our “rulers” are the ones whom created this financial disaster while, at the same time, knowing perfectly well what was going on all along. Using taxpayers as a recepticle for the toxic derivitives that almost collapsed the global economy is nothing short of financial totalitarianism. I saw this coming as well as millions of others and positioned myself accordingly.
      The people that were bailed out were the abject of the abject. The sad thing is that these morally hazardous measures that are being taken will only push the real day of reckoning back to the very near future. It does nothing to clear the hisorically high inventories of homes here in U.S.. It does nothing to stop the plummeting values of homes. It MAY temporarily delay the pending 5 million foreclosures but unemployment is surging here in the U.S.
      Joao, I have zero faith in our rulers. I left the Republican party a few years ago because of out of control gov. spending and the continuous lifting of the debt ceiling. I’ll revert to the words of Ronald Reagan in citing the most dangerous words you will ever hear: “I’m from the government and I’m here to help you”.
      Recent events portend nothing good. The sad fact is that when we go down, we’ll take everyone else with us. Emerging markets like Brazil will be get the worst of it.
      Stay well.

    • The Guest

      JoÀƒ£o
      “Good to hear from you again. Hope you were not in Galveston during the hurricane!”

      I am still in St Croix.

      “How long are you going to be on “Dry Land”, before you sail off again? Hope you will be in touch before your next voyage.”

      Tomorrow morning I will fly to Jacksonville, Florida to meet the ship. I have been busy here since I return from St. Kitts so I have no had much chance for blogging, but I have been making an effort to keep up with what has been happening. You will hear from me again before I leave on the next voyage.

      “Thanks for reproducing the article written by Thomas Omestad ! Good thing that it was not republished by this site !! It would have drawn some “constructive” criticisms by distinguished bloggers like Ch.c, Lord Augustus, DnbaiacÀƒº, etc;”

      You are welcome. I am hoping it will draw some response, should make some interesting reading.

    • João da Silva

      [quote]If you all remember the last time this was done, it was followed by a pretty nasty recession. [/quote]

      Vinny, my dear fellow, I am not worried by this “pretty nasty recession” and nor should you be. Trust our “rulers” to guide us all through this difficult period.

    • João da Silva

      The Guest
      Hi,

      Good to hear from you again. Hope you were not in Galveston during the hurricane!

      Thanks for reproducing the article written by Thomas Omestad ! Good thing that it was not republished by this site !! It would have drawn some “constructive” criticisms by distinguished bloggers like Ch.c, Lord Augustus, DnbaiacÀƒº, etc; 😉

      How long are you going to be on “Dry Land”, before you sail off again? Hope you will be in touch before your next voyage.

      May be Ch.c would like to enlighten you further on the article written by Thomas. 😀

    • VinnyCarioca

      De-Facto Signal for Recession
      Well folks, the criminals in Washington are at it again. The market soared after it was reported that the Resolution Trust Corporation Part 2 will probably be established to absorb the bad debt that is driving this financial crisis. If you all remember the last time this was done, it was followed by a pretty nasty recession.
      It amazes me (if I may use the hackneyed cliche) how the more things change, the more they stay the same.

    • The Guest

      CH.C., and JoÀƒ£o : For your reading pleasure. Part 4
      Some officials also see a moderate but strong Brazil as a counterweight to the region’s anti-U.S. antagonists, headlined by Hugo ChÀƒ¡vez of oil-rich Venezuela. Lula appears to find ChÀƒ¡vez’s Yankee-baiting off-putting. But he and his advisers have made clear, publicly and privately, that they want no part of an anti-Venezuela front. “This is something we resist very much,” says Patriota.

      And discomfort with playing the role of regional leader runs deep in Brazil. It even has a cultural side. “It’s un-Brazilian to proclaim leadership,” says Sotero.

      Lula says he aspires to lead only his own country. Brazilian officials are intent on avoiding moves that stir up populist rabble-rousing against Brazil by neighbors. Such tendencies have flared at times in Uruguay, Paraguay, Bolivia, and even Argentina. The lesson officials here take away: The neighborhood big guy needs to tread lightly. Brazil, they say, should stick with peaceable soft power.

      And yet, the ever cautious Brazilians are finally permitting themselves some optimism, thinking their time may be at hand. Quips Fleischer of the University of Brasilia, “It’s no longer the country of the day after tomorrow but maybe of tomorrowÀ¢€”or later tonight.”

    • The Guest

      CH.C., and JoÀƒ£o : For your reading pleasure. Part 3
      Brazil’s turnaround is also underwritten by its abundance of natural resources and prowess in agriculture. In a world clamoring for more energy and food, Brazil has plenty of both.

      Under the Atlantic south of RioÀ¢€”and then beneath 10,000 feet of sand and rock and 6,600 feet of saltÀ¢€”lies an oil and gas field called Tupi, judged last year to have between 5 billion and 8 billion recoverable barrels. It was the largest global find since 2000 in Kazakhstan. Then came the icing on the cake: news of another massive, untapped offshore field known as Carioca that estimates suggest might hold as much as 33 billion barrels of oil. One official compares Brazil of the future to oil powers like Venezuela and Saudi Arabia.

      Meanwhile, back on land, the news is nearly as good. Brazil has emerged as the world’s leading exporter of biofuels, the result of near-ideal growing conditions for sugar cane and a decades-long national drive to develop ethanol. The country’s vast savannas have also become the launching pad for Brazil to become a global agricultural powerhouse. Brazil is now the No.1 world exporter of beef, poultry, sugar, coffee, and orange juiceÀ¢€”and is gaining in soybeans, corn, and pork. Scientific breakthroughs in tropical farming and an amount of arable land unmatched on the planet could, in time, make the country the leading global breadbasket.

      Nonetheless, Brazil’s new confidence is tempered with a sense that its rise remains vulnerable. Inadequate education and training mean there are too few Brazilian engineers, programmers, and other experts to sustain growth. The infrastructure of roads, railways, and ports falls well short of what an economic great power will need. The political will to fund the overhaulÀ¢€”and proceed with more economic reformsÀ¢€”is weak. High taxes and political corruption still hinder the country’s rise. And intense pockets of crimeÀ¢€”famously in the slums, or favelas, of big cities like RioÀ¢€”along with outbreaks of mosquito-born dengue fever suggest the nation’s ascendance has a long way to go.

      Still, with its new economic clout, Brazil is edging out onto the world stage. It midwifed this year a process of economic integration among South American nations, and it is leading efforts to create a South American Defense Council. Lula is traveling the world, and Brasilia is stepping up foreign aid. “Lula is seen as a balancer for the region,” says an official in Brasilia.

      Warm relations. On a continent that has veered to the leftÀ¢€”with some strident anti-U.S. notesÀ¢€”Brazil exerts influence that Washington welcomes. Brazil, says Thomas Shannon, assistant secretary of state for Western Hemisphere affairs, “is a natural stabilizing force in the region.”

      President Bush is said to count relations with Brazil as a success and, according to the U.S. ambassador in Brasilia, Clifford Sobel, Brazil has been added to a list of allies and friendly states most important to America. Says Shannon, “How we work with Brazil is going to be as important as how we work with China and how we work with India.”

      Bush and Lula have developed an amiable relationshipÀ¢€”unexpectedly so, given such different ideologies and class backgrounds. Lula uses sports metaphors in private, and both joke about dealing with legislators and the news media. “They have a similar way of being very direct,” says Brazilian Ambassador to the United States Antonio Patriota. “It helps to grease the relationship,” adds Marco AurÀƒ©lio Garcia, Lula’s top foreign policy adviser.

    • The Guest

      CH.C., and JoÀƒ£o : For your reading pleasure. Part 2
      Economic stability. That moderation found a popular voice in Lula. A child of the working class with a fifth-grade education, the former union leader led his left-leaning Workers’ Party to victory in 2002. But rather than launch the anticipated populist backlash against the economic reforms of his predecessor, the pragmatic Lula held on to them, consolidating the country’s macroeconomic stability.

      Brazil’s old nemesisÀ¢€”a chaotic hyperinflation that used to range into four digitsÀ¢€”has been vanquished. Laggardly growth has given way to 5 to 6 percent annual gains. Manufacturing has grown more diverse, and dynamic Brazil-based multinational companies are making waves. They include the world’s No. 3 airplane maker, Embraer; oil giant Petrobras; the construction firm Odebrecht; mining concern Vale; steelmaker Gerdau; and beef processor JBS, which has acquired U.S.-based Swift. “This is a brand-new phenomenon,” says Barbosa. “It’s a revolution.” Brazilian-managed beer giant InBev is even trying to buy America’s iconic Budweiser.

      On the edge of debt default just six years ago, Brazil became a net creditor for the first time this year. Stocks have been buoyant, with a historic upswing of foreign investment. “The banks love Lula, and business gets along with him quite well,” says David Fleischer, a political analyst and professor emeritus at the University of Brasilia.

      But Lula has also managed to reduce poverty in the nation of 190 million. Extreme poverty has been cut in half, and 20 million have advanced to the middle class. Under Lula, tax breaks and a program of direct subsidies to low-income families known as Bolsa Familia are credited with helping millions eat and keep a roof over their heads. The subsidies require that children attend school and receive their vaccinations. Deep into his second term, Lula is basking in 70 percent approval ratings

    • The Guest

      CH.C., and JoÀƒ£o : For your reading pleasure. Part 1
      Brazil, Buoyed by Oil and Agriculture, Becomes a Global Power
      Once a chronic debtor, the South American giant finds its groove under Lula, its charismatic president
      By Thomas Omestad
      Posted September 18, 2008
      BRASILIA, BRAZILÀ¢€”For decades, this well-endowed country was ritually dubbed the country of tomorrow, and yet the long-promised greatness of Brazil never materialized. Military dictatorships, wanton public spending, corruption, a chasm of income inequality, and an enervating pace of change all checked its rise. South America’s largest countryÀ¢€”both in terms of people and landÀ¢€”grew comfortable in the demure art of punching below its weight class. “Brazil,” Charles de Gaulle once reportedly remarked, “is not a serious country.”

      Under President Luiz InÀƒ¡cio Lula da Silva, Brazil’s economy is booming, including construction in vibrant SÀƒ£o Paulo.
      Nowadays, though, de Gaulle would be sorely mistaken. Years of stable democracy and economic policyÀ¢€”and a lot of good luckÀ¢€”are awakening the slumbering giant of South America and pulling it into the ranks of the world’s big emerging powers. “We put our house in order,” says Rubens Barbosa, former ambassador to Washington. Adds Brazilian Paulo Sotero, who directs the Brazil program at the Woodrow Wilson International Center for Scholars in Washington, “I think we have found the groove.”

      Serendipitous events have shaped Brazil’s past year, particularly offshore finds of oil and gas that should vault it into the top 10 oil exporters a few years from now. It has also been commanding lofty prices for agricultural and other commodities like iron ore and copper. And financial institutions have blessed its debt with the coveted “investment grade” status, confirming Brazil’s position as a solid destination for foreign capital. Brazil, says its president, Luiz InÀƒ¡cio Lula da Silva, has arrived at a “magical” moment.

      On the ground here, growing optimism is reflected in various ways. Construction cranes sprout across the financial center, SÀƒ£o Paulo. Credit is now far easier to get, and sales of cars, TVs, and cellphones have hit a torrid pace. One result: The traffic jams of SÀƒ£o Paulo and Rio de Janeiro are now the stuff of lore.

      Doubts over whether Brazil really belonged in the group of big emerging economies known as the BRICsÀ¢€”Brazil, Russia, India, and ChinaÀ¢€”have passed. “Brazil is now worthy of being called a BRIC,” says Riordan Roett, a Brazil expert at Johns Hopkins University. “It’s turned a corner.”

      A foundation of Brazil’s surge has been the consolidation of democracy after years of the military strongman rule that gripped much of Latin America. After the generals ceded power to a civilian government in 1985, the state began easing its hold on economic life. Moderation in government became a guiding instinct, with the hard left and right both marginalized. And compared with the other BRICs, Brazil has avoided stewing in nationalistic resentments aimed at others.

    • CH.C.

      Joao !!!!
      I did not pay attention to what Mantega said !

      for your info the U.S. stock market is now UP 4 % after having been DOWN 3 % !

      Brl now 1.88 & Bovespa UP 6.69 %

      Whooaaaa !!!!!

      Looks like Paulson is going to do a Resolution Trust Company to put all these…either Real Estates…or debts (Nothing announced yet)

      Reason for the markets reversals

      😀 😉 😀 😉

    • João da Silva

      Ch.c
      [quote]Joao [/quote]

      IMHO, our President should appear on the TV tonight (like Bush gave a press conference this morning) and assure all the people on the “Bolsa familia” that the situation is under control and there is no crisis. 😉

      Now, wait a second. Didnt Matega say yesterday (or the day before) that there was going to be just a “slight” devaluation of Real and nothing to worry about? 😉

    • CH.C.

      better yet
      today 9/18 the BOVESPA is nealy flat…but the BRL/USD is 1,9365 !!!!!

      Hmmmmmm !!!!!

      Joao 😀 😉

    • JAY GLENN

      AMERICA IN TROUBLE
      Looks like all the wall street people will not be looking for jobs in BRAZIL after all.

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Leaflets and Condoms Against Sex Tourism in Brazil

    Brazil’s Ministry of Tourism is preparing an action plan to reinforce the efforts opposed ...

    Brazil’s Lula Excited With Addition of Biofuel to Diesel

    With the production of H-Bio, consumers may be able to pay less for diesel ...

    U.S.A. Calendar

    FRIDAY 1 MIAMI Today and tomorrow last two days of Women in the Arts ...

    Brazilian minor prostitute

    Ruling on Sex with Minor Exposes Brazil to World Condemnation

    The National Association of Federal Prosecutors, says that the decision by a panel of ...

    Happy Penis, a Brazilian Program Dispenses Free Viagra to the Elderly

    McDonald’s has Happy Meals and the litlte town of Novo Santo Antônio (population: 1168) ...

    Brazil’s Gol Goes International. First Flight: Buenos Aires

    Brazil’s GOL Linhas Aéreas Inteligentes S.A., December 1st, started selling tickets to its first ...

    History, Diamonds and Gold

    The morning moved on at that neoclassic apartment, with active exchange of wine bottles, ...

    Brazilian hydroelectric of Tucuruí

    Energy Hungry Brazil to Spend US$ 15 Billion for 5 New Hydroelectric Plants

    Energy-short Brazil needs to increase its power capacity by 50% in a decade, so ...

    15 Years of Mercosur: Brazil and Argentina Still Don’t Get Along

    The vice-president of the Brazilian Foreign Trade Association, José Augusto Castro, gave his evaluation ...

    200 Air Force Men at Boeing Crash Site in Brazilian Jungle

    Brazilian authorities restarted at 5;30 am, this Sunday, their search for victims of the ...