Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.614

-15.9%

Dec 10 3:59 PM EST

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To: Steve Fancy who wrote (6978)	8/21/1998 4:53:00 PM
From: Steve Fancy	of 22640

REPEAT: Global Markets Gone Haywire Threaten Latin America By MARGARITA PALATNIK Dow Jones Newswires NEW YORK -- The wonder of global integration looked more like a curse for Latin America this week as a seemingly unending flow of negative news from emerging markets sent the region's assets spiraling downwards and cast doubts over whole economies. Market participants say they have never experienced the combination of a downturn of the magnitude affecting emerging nations in 1998 and the level of interconnection - actual or perceived - among markets as seen this year. "I've never seen total malaise like this before, with the Dow finally buckling, and debt prices as low as they are now," said Flemings Latin America strategist Walter Stoeppelworth. Analysts and economists have stressed for months that despite shortcomings such as worrisome fiscal deficits, Latin American economic fundamentals are sound. They generally commend governments from Mexico to Brazil for managing their economies so well under such global turmoil. Latin American ministers have even been held up as examples for their beleaguered Asian counterparts, after years of being told that the "Tigers" had the right ideas. But it all came crumbling down this week after Russia on Monday devalued its currency and moved to restructure debt. That prompted investors to speculate on which developing country's currency would be next in line, and Venezuela was chosen. That, in turn, unleashed intense selling of Latin American currencies, stocks and bonds. Despite the onslaught, Venezuelan and Brazilian authorities continued to insist that they won't devalue their currencies. Mexico adopted two separate measures this week to tighten liquidity and limit interbank lending in a show of its resolve to shore up its peso.

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