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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (37556)	7/25/2008 8:35:11 AM
From: elmatador	Respond to of 217734

People in those countries live off capital want more fixed income as inflation rises. They also have oligarchs that need to be fed, mind you...

To: Haim R. Branisteanu who wrote (37556)	7/25/2008 9:01:48 AM
From: elmatador	Respond to of 217734

Forbes Ranking of the most expensive cities. Of course this means expensive as measured for goods and services foreigners. Those surveys help them extract more money from their employers for tranferring to live there. That happens because the sudden raise in the inlfux of money, creates a bottleneck of the most expensive things for foreigners like: housing, household help, schooling... forbes.com 1. São Paulo, Brazil In the last year, the dollar has lost ground to the pound sterling, both have slipped against the euro, and they've all lost compared with the Brazilian real. Thanks to Brazil's growing economy--and the country's credit upgrade to investment grade-- there's been an unprecedented influx of wealth in Brazil. This, and the strength of the currency, has made Brazil as a whole significantly more expensive when viewed from an international perspective. Most affected has been the financial capital of São Paulo. 4. Rio de Janeiro, Brazil After Sao Paulo, Rio is the most expensive city in South America. Brazil is the world's eighth largest economy on the basis of gross domestic product, and at 5.4% growth in 2007, it is still expanding significantly. The country's consumer price inflation of 4.5%, based on state statistic figures, is dulling the shine, especially when it comes to cost of living, as increasingly rich Brazilians can afford to pay more for goods and services.

To: Haim R. Branisteanu who wrote (37556)	7/25/2008 9:09:16 AM
From: elmatador	Read Replies (1) \| Respond to of 217734

Cooling Off Brazil Brazil's central bank is trying to throw cold water on the country's hot economy. On Thursday, Brazil, Latin America's largest economy, reported that the unemployment rate for the month of June was 7.8%, lower than the 7.9% measured in May, but slightly ahead of the 7.7% expected. "Labor market conditions remain robust," said Rafael de la Fuente, chief Latin American economist at BNP Paribas. The employment data came one day after the Brazilian central bank, worried by accelerating inflation, surprised the markets by raising interest rates 75 basis points to 13.00%. It was the third rate hike this year, following 50 basis point increases. The central bank's monetary policy committee said the higher hike was made to "promote the gradual convergence of the actual inflation rate with the targets set." The Sao Paulo Stock Exchange's benchmark Bovespa index fell 3.3% to 57,434 points. "What's going on in Brazil merits a strong market response," said Rafael de la Fuente. "The economy is buffeted by the same external shocks of food prices that are affecting other countries, but on top of that they have domestic demand that's booming. The economy may be overheating and that requires the central bank to bring monetary policy that sends them message that inflation has to be brought down and will be brought down." Economists and brokers questioned by the central bank are forecasting inflation this year will hit 6.53%- higher than the government's target of 4.5%, and above the bank's ceiling of 6.5%. Brazil's interest rates are among the highest of significant emerging economies in the world. Only Turkey, with a rate of 16.75%, outstrips it. For authorities, the trend is worrying, especially as ratings agencies recently raised the country's sovereign debt to investment grade after it convinced the markets it had finally closed the door on its past propensity to hyperinflation. But even though the worldwide downturn is dampening growth, Brazil's gross domestic product is still expected to expand 4.8% this year, down from 5.4% last year. Central bank chief Henrique Meirelles has vowed to bring inflation back to 4.5% by the end of next year, suggesting that more interest rate increases are in the pipeline. To combat inflation, Mexico, Latin America's second-largest economy, recently made the controversial move of capping food prices. The government's effort did not deter the central bank from raising the key interest rate though by 25 basis points to 7.75% at its monthly monetary policy review. (See "Mexico Central Bank Hikes Rates")

To: Haim R. Branisteanu who wrote (37556)	7/26/2008 4:24:54 AM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 217734

Further south, we are not far away from civic protest. BNP Paribas has just issued a hurricane alert for Spain. Finance minister Pedro Solbes said Spain is facing the "most complex" economic crisis in its history. Actually, it is very simple. The country was lulled into a trap by giveaway interest rates of 2pc under EMU, leading to a current account deficit of 10pc of GDP. A manic property bubble was funded by foreigners buying covered bonds and securities. This market has dried up. Monetary policy is now being tightened into the crunch by the ECB, hence the bankruptcy last week of Martinsa-Fadesa (€5.1bn). With Franco-era labour markets (70pc of wages are inflation-linked), the adjustment will occur through closure of the job marts. China, India, East Europe and emerging Asia have all stolen growth from the future by condoning credit excess. To varying degrees, they are now being forced to pay back their own "inter-temporal overdrafts". If we are lucky, America will start to stabilise before Asia goes down. Should our leaders mismanage affairs, almost every part of the global system will go down together. Then we are in trouble. telegraph.co.uk