Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.545

+1.9%

3:59 PM EST

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To: Steve Fancy who wrote (658)	1/6/1998 7:06:00 PM
From: Michael Burry	Read Replies (1) of 22640

Any budget cuts are really only good news. The budget deficit threatens the support of the real, which threatens our returns. They need to follow a tight fiscal policy and they are doing it. In Brazil, many public programs are guaranteed - over 80% of government spending is constitutionally guaranteed in the form of public worker wages and pensions. Cutting is very difficult, and requires in some cases constitutional amendments. That Congress is able to do this bodes well for Brazil's future stability - they are doing the right thing. Re: Telebras-specific cuts, foreign investment will more than make up for any short term cuts. Telebras' representative told me directly that Telebras is an easy target because the private sector will easily invest more in it than the government could ever do. The ING analyst echoes this. Beware though - I tend to have a knack for having crucial unknowable stock-breaking news released just after my article is published despite company assurances. I had personally talked with Oxford, Creative, and now Telebras and came away assured from all three interviews. Mike

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