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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 694.04

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Jan 9 4:00 PM EST

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To: Saulamanca who wrote (75612)	4/20/2001 10:13:54 PM
From: gfs_1999	Read Replies (2) of 99985

Brasil , Argentina and China: The problem here in Brasil isn't corruption (corruption here is beeing punished, before our politics closed the eyes and everthing finished in Pizza) The main problem now is economic model from Argentina that isn't working. Argentina currency can't support 1 Peso= 1 Dollar. Argentina products are very expensive while Brasil product are very cheap. Brazil currency 2,2 Real= 1 Dollar. Argentina trade balance is in bad shape. Many Argentina citizens and companies have their Debts in Dollars so if Argentina decide to desvalue Peso currency to make their products more competitive it will hurt citizens and companies (Bonds). But I'm not sure about Argentina companies because I remember that when Brazil desvalue Real currency the face values from my Bonds didn't change. But companies will have to make more money to pay rates. Just for your information Brazilian Corporate Bonds is paying 10-12%. I know 2 companies that already default. (junk companies imo) This week Minister of economy Cavallo left brazilian market concerned because Cavallo is changing the inicial idea 1Peso=1Dollar. I don't think Fed action was due Argentina problem but it may be reforced his action. I see he is more concerned about USA economy. But if you make a little research about USA trade balance you can see that USA export more than import from Brasil. Just one thing I'm still thinking here, how can USA increase its exportation if the world enter in a slowdown cycle. Many people here is betting that China could solve USA problens. But I think Europe and Asia products and companies are better and cheaper than USA . Lets make a list of products that China could buy or companies from USA that can go to China Cars? no way Asia has cheaper and good cars and Europe has expensive and better cars than USA. Food? May be but Brasil also has and cheaper. Metals? May be but Brasil also has and cheaper. Telecom? Europe and Japan imo are better PC Computer and ? May be Dell,IBM and Compaq but Europe,Asia and Japan will do well War Weapon and defense. USA? I don't think so Retail Stores? USA the best imo China is a different culture like Europe and Oriental countries that don't like USA culture. USA do better in Latin America and Canada . Someone here could talk more about China and USA ? IMO China is a Black BOX or RED BOX. Regards GFS

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