Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.956

+6.7%

Nov 24 3:59 PM EST

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To: Steve Fancy who wrote (11710)	1/14/1999 10:18:00 PM
From: Logos	Read Replies (1) of 22640

>A devaluation may become a necessity as the alternative - >keeping high interest rates - will push Brazil into a deeper >hole on the fiscal front. The government currently pays >interest on about $300 billion in domestic debt. About 70 >percent of it is linked to overnight rates - hovering around 30 >percent. Wow, is this saying that Brazil is currently paying 30% interest rate on most of its $300 billion debt? In a no-inflation environment. That makes even the credit card banks here seem positively altruistic with their 16.9% or whatever interest rates. Like I said before, nobody can possibly pay that kind of interest on that big a debt for any length of time. Further devaluation seems a given (which makes the dollar-denominated debt an even bigger burden). Now I'm worrying about some kind of a default. And kicking myself for buying more stock just before this latest mess hit. Logos

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