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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (7072)	8/24/1998 1:37:00 PM
From: CuttotheCore	Read Replies (1) \| Respond to of 22640

Green, In a nutshell- Latin America is in a much better position economically then Russia or Asia and should not be compared with them. Global Intelligence Update August 24, 1998 A Tale of Two Cities: Moscow and Caracas Face Different Realities In a week dominated by advanced weaponry, primitive hideouts, stained dresses and something about dogs, tails and wagging, it's probably time for all of us to come back to something resembling reality. Last week, reality was resident in two cities -- Moscow and Caracas -- playing very different games in each. In Moscow, reality was showing its brute strength, brushing aside wishful and sloppy economic thinking. In Caracas, reality was playing hide-and-seek, as rumors of devaluation triggered massive dislocations in Latin America's markets. We were driven once again to reflect on what has, at least for us, become obvious: regional thinking trumps global thinking every time. While everyone was thinking in terms of Asia, Russia was playing out its already lost hand, while Venezuela was having the deck shuffled for it once again, possibly with some cards missing. Russia's problems are unique and insoluble. Latin America's problems are also unique but much less dangerous than they appear. As usual, the world is heading in many different directions at the same time. ...Left out analysis of Russia... Having been wrong on Asia and Russia, investors are now going to the other extreme and seeing Asias and Russias everywhere. We have been arguing here that what we are seeing is a regionalization of the global system, and that the stock markets are pointing the way. Last week, while the rest of the world's markets shuddered, the U.S. markets stabilized. The Latin American markets should, we believe, be read more in the context of their North American counterparts than as an adjunct to the Russian and Asian systems. As the American market moves up, more capital becomes available for investment in Latin America. Money that used to go to Asia and Russia is still being produced in the United States and to a lesser extent in Europe. We expect its target increasingly to be Latin America. We like to be realists. Our realism has led us to call both the Asian and Russian meltdowns accurately. But being realists does not mean that we are perpetual pessimists. We are in the midst of the normal economic process that has dominated the world ever since European conquerors created a global economy. Global economy does not mean homogeneous economy. Some parts of the world rise, some parts fall. Some parts do each more consistently than others. Asia and Russia are falling. The United States is rising. We think that Latin America will continue to trail the American track during the next generation. We don't know what will happen next week or next month in the Latin American markets. But we do believe that expectations that Latin America will follow Asia and Russia are as unrealistic as the assumption that Chernomyrdin can solve Russia's economic problems. The key is to read the markets regionally rather than globally. The world is dividing into three great regions (Asia, North America, Europe) with North America being both the most prosperous and secure. Latin America has the good fortune to be more closely linked to North America and Europe than to Asia. In particular, close links to the United States will be invaluable during this next generation. That holds true regardless of who did what to whose dress in the oval office. The United States will prosper in spite of its truly bizarre national politics. So will Latin America, although their ride will be more, shall we say, exhilarating. ___________________________________________________ To receive free daily Global Intelligence Updates or Computer Security Alerts, sign up on the web at stratfor.com, or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com ___________________________________________________ STRATFOR Systems, Inc. 3301 Northland Drive, Suite 500 Austin, TX 78731-4939 Phone: 512-454-3626 Fax: 512-454-1614 Internet: stratfor.com Email: info@stratfor.com