Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 1.090

+3.8%

Nov 14 9:30 AM EST

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To: dougjn who wrote (8669)	9/30/1998 11:26:00 PM
From: Derrick P.	Read Replies (1) of 22640

Maybe I'm oversimplifying, but how will the Brazilian economy compete in the face of overcapacity and devaluations in Asia. IMO China started this whole contagion with their heavy industrialization and devaluations. As another low labor rate emerging economy, it seems Brazil's only option is devaluation. Does anyone know how much direct competition they have with Asia? This I believe was the problem in Asia, that profitability was reduced to the point where debt payments could not be made. What I hear from the IMF and others is, 'We don't want you to devalue your currency as this makes dollar denominated debt difficult to pay and we do not want you to default on your debt.' They seem to be looking out for the interests of the debt holders, but they don't address the competition problem. If Brazilian companies are not profitable, Brazil can not hope to pay off it's debts.

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