Steve, thanks again for your time.
Still sitting on the fence in respect to the UBB puts, while having nibbled a bit at TBH today.
Even after exiting my Brazilian positions this fall, I have kept up on fiscal/financial goings on down there but not with the specific attributes of the Babybras. You guys on this board are pretty sophisticated in that respect, and I thus don't have much to add at this point. What I can say is that communications with my relatives in Argentina indicate that most all citizens now disfavor the reform trends of the 90's. Their thinking still emphasizes resource distribution, rather than wealth creation, despite my constant preaching of capitalism's virtues. To be sure, much of their current skepticism must result from the seeming lack of recent progress being realized from the reforms in terms of bettering living conditions for the average citizen. Seems that Argentina, while following a fiscally responsible course, has been a victim of outside events - first Mexico, then Asia and Brazil.
While it is tempting to look at the bottoms reached last fall in Latin equities, I'm not so sure that too much weight should be placed there. Yes, there was widespread panic at the time. However, that was not the "big one" as everyone feared. Since then we've gotten hitched to the IMF and are now seemingly deep in the yogurt once again.
On the bright side, demographics are quite positive in Brazil, somewhat similar to those here in the U.S. Thus, I would expect that if this situation can be resolved one way or another, the hangover should not last too long. In any event, the Brazilians themselves must clearly realize that the world's financial community has "torn up their credit cards". |
