• This is a big week for President Rousseff and Brazil.

    Another Crossroad for Brazil

    This could be a decisive week for Brazil as the toxic mix of complicated politics, worsening fundamentals and financial market stress comes to the fore.  Today, the congress is supposed to vote on whether to uphold or overturn the decision by President Rousseff to veto a sharp increase in spending. 

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  • Many see Brazil's credit rating as still too generous.

    Brazil's Credit Rating Path of Least Resistance is Down

    The reasons for Brazil’s downgrade to sub-investment grade are clear, and do not need further discussion beyond noting that the numbers are going to get much worse before they get better.  While it is always tempting to say that Brazil selling has gone too far too fast, we see nothing on the horizon that could be “good” news for the nation’s investment outlook.

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  • Brazil's Levy is saying all of the right things.

    Levy's Brazilian Honeymoon Period Could Last Longer or Come to an Abrupt End

    Yesterday we attended an event with Brazil’s Finance Minister Levy.  Our takeaway was that policymakers are willing to accept a subpar 2015 in the hopes of getting the economy on track by 2016, when the country will hold the summer Olympics.  As one would expect, Finance Minister Levy said all the right things about arresting fiscal slippage, encouraging foreign investment, and fixing past mistakes.  But he also stated that it is possible to achieve the 1.2% primary surplus target without “draconian measures.”

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  • Brazil is out of a recession for now

    Brazil's Cautionary Tale of Economic Woe and Recovery

    If Brazil has ever suffered from a financial turmoil, it mostly has been more of a contagion effect like the 1997 Asian Crisis and 1998 Russian Crisis.  It has been considered one of the strongest emerging markets and a large contributor towards global growth. However, things started looking a bit foggy for Brazil since 2008 financial crisis. It was observed that a country that could be a potential contributor to global growth could also pose an equal threat to financial stability.

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  • Too Close to Call for Marina and Dilma?

    Brazil's Marina Silva losing ground to Dilma Rousseff or Not

    Several variables are changing simultaneously which are hurting the prospects for Brazilian assets. The main ones are: (A) Dilma is gaining ground and Marina losing momentum faster than we expected, (B) the broad strong dollar trend hitting EM across the board, and (C) a global equity sell off. 

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  • The Economic Impact Of The World Cup

    The Economic Impact Of The World Cup

    What’s the World Cup worth? For some, it is a cash cow and a commercial bonanza; to others, a waste of money. Is hosting the tournament worth it?

    Ever wondered what the World Cup is worth? When Italian sculptor Silvio Gazzaniga designed the current trophy in 1971, it was worth US$50,000. Now the trophy is estimated to be worth US$10m. The World Cup is, however, worth much more than two human figures cast in 18 carat gold.

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  • How Did Brazil’s Economy Go From Promising To Precarious?

    How Did Brazil’s Economy Go From Promising To Precarious?

    This year’s FIFA World Cup and the 2016 Olympics seem to be a coronation of Brazil’s undeniable and startling success. But with the Brazilian presidential elections looming later this year, a surge in street protests and growing economic unrest, will Latin America’s largest nation cope under the international spotlight?

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  • Brazil Riots: Citizens Unite In Contempt For Political Class

    Brazil Riots: Citizens Unite In Contempt For Political Class

    To outsiders, Brazilians don’t seem to have as much to complain about as the protesters in Greece, Turkey, or Egypt. Its economy has boomed for two decades and is now the world’s seventh largest. But inside Brazil, anger has been simmering for some time. Atrocious public services, government corruption and the extravagant spending on the FIFA World Cup are at the root of June’s mass demonstrations across 80 cities in Brazil.

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