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

To: MGV who wrote (7690)	9/10/1998 1:35:00 AM
From: Steve Fancy	Respond to of 22640

FOCUS - Brokers slash Latam growth forecasts Reuters, Wednesday, September 09, 1998 at 20:36 By Michael Christie MEXICO CITY, Sept 9 (Reuters) - The trickle of international investment houses slashing Latin American growth forecasts because of the widening Asian crisis has become a torrent. On Wednesday, Bear Stearns jumped on the bandwagon, saying Russia's devaluation and the lack of U.S. or International Monetary Fund (IMF) policies to contain the contagion meant countries from Argentina to Mexico would feel the chill. Bear Stearns analysts David Malpass and Jennifer Woolman said they had slashed their expectations for the region's gross domestic product expansion in 1999 to just 3.0 percent from an original forecast of 4.5 percent. But the firm's scenario was based on possibly precarious assumptions -- U.S. growth will remain strong, Brazil will not devalue and countries would not be adopting currency boards, dollarization or price-rule monetary policies. "If either of the first two assumptions is wrong, Latin America's economies will perform significantly worse than we are forecasting," Malpass and Woolman wrote. The Bear Stearns downgrade of its growth estimates followed a report by SG Cowen last Friday titled, "Taking an axe to our 1999 growth forecasts". SG Cowen did just that, slashing its regional GDP growth estimate for 1999 to 2.8 percent from nearly 4.0 percent. The research house said its view was based on the probability that global market turmoil meant commodity prices, on which Latin America is dependent, would not recover any day soon. "The risk is on the downside as we are assuming that Latin America is able to take Russia's botched devaluation as a fair warning and will avoid a similar financial meltdown," analysts Ronald Ratcliffe and Kimberly Bixel said. "A devaluation in China and/or Hong Kong is the most obvious external shock that would tip the balance against Latin America," they added. Meanwhile, the Economic Commission for Latin America and the Caribbean (ECLAC), a United Nations body, predicted Latin American growth in 1998 will be 3.0 percent, below the average for the decade so far and down from 5.3 percent last year. It too blamed the Asian financial crisis and also the adverse effects of the El Nino climatic phenomenon, which caused severe drought in many areas and heavy rain in others. So far, most Latin American governments have acknowledged that the global mayhem, by forcing them to jack up interest rates to defend their currencies against devaluation pressures, was likely to hit growth. Panama has put a figure to the impact, cutting its official projection for GDP growth this year to 4.0 percent from 5.0 percent originally. By contrast, Argentine President Carlos Menem this week insisted in a newspaper article that despite the world crisis, the country's economy will grow more than six percent in 1998. That was not the view of independent analysts. Bear Stearns cuts its forecast for Argentine GDP growth next year to 4.0 percent from 6.0 percent. SG Cowen estimated Argentina's GDP would expand 4.5 percent in 1998 and 3.3 percent in 1999. Its analysts noted Argentina had spent three years preparing for crisis but that, nevertheless, the country's growth prospects were most at risk from a Chinese or Hong Kong devaluation. Last week, Deutsche Securities said it had cut its estimate for growth in Argentina's to 4.0 percent this year from 6.2 percent and for 1999 GDP growth to 3 percent from 4.5 percent. But the country potentially facing the biggest impact is Brazil, forced by investor jitters to hike interest rates last week and to announce a new round of budget cuts this week but stilll facing a steady seepage of dollars. Bear Stearns halved its growth projections for 1999 to 2.0 percent from 4.0 percent while SG Cowen foresaw 1999 GDP growth of just 1.8 percent. mexicocity.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: MGV who wrote (7690)	9/10/1998 1:36:00 AM
From: BOB JOHNSON	Read Replies (2) \| Respond to of 22640

Might as well make everyone mad before subscription runs out. Guts---a very short essay, In Texas we said big hat-no cattle. On a good day it was nice buckle-no balls. Today I see lots of brains. Steve-you lead the charge for a long time(Iwent back on this thread from day one). The hope for a double or triple is what lead us here. You sold over 50% of your position per your post--I really thought you were the quarterback to take us home. Now you are going to miss 50%of the pay off. djane please keep posting as Steve looks like a potential fader. Dark-this hurts-this was a great Steve or djane post. We (maybe I should say I as my stock is probably headed down around here) look to you for that analitical evaluation of posts and the guts to call Jeremy-I sure would't do it-cause you have a very knowledgeable point and this thread needs knowledgable people digging in and fighting for their positions. Jeremy-your calls will not go unchallenged-but then I have not been called a girl for quite some time--Hang in there lady. Doc----------I took a cheap shot and for that I am sorry. I think you belong to the other political party and probably live east of the Mississippi. However you do not seem to lack guts. My son is paying 40% of his school bill cause he chose the school. Not impressed with your pleadings of poverty. I work outside in the sun, rain sleet snow wind and the good days I probably have to do bids. My low six figure bet went to mid five figure before I decided this is a world class event and boosted my stake to over seven figures-real money friend. Concerned as all hell but if it all goes away I stood fast when others did not. Means I might be in the bad weather for five or six years instead of somewhere fun. I started with nothing and have fought back from there three times but this looks like a winner to me. Put your money where convictions are but don't blame the people that win if you chose not to play. DG-brokerless as of today. Probably need to pay my WSJ bill. Wouldn't have missed this for the (hum--let me think about that) BOB

To: MGV who wrote (7690)	9/10/1998 1:39:00 AM
From: Steve Fancy	Respond to of 22640

FOCUS-Brazil moves to plug massive dollar outflows Reuters, Wednesday, September 09, 1998 at 20:40 By Joelle Diderich BRASILIA, Sept 9 (Reuters) - Brazil moved again on Wednesday to stem a massive exodus of dollars and said it may introduce further budget cuts to help contain turbulence from a global crisis in emerging markets. The Central Bank said it was launching a new type of note linked to the dollar to give traders holding the local currency, the real, further protection against a potential devaluation. The notes will be indexed to the dollar rate in the floating foreign exchange market, paying 6 percent interest a year plus any variation in the dollar rate. But the bank reassured investors it planned no change in its foreign exchange policy, which has made the real the centerpiece of a four-year economic stabilization drive. "We are not considering any change in exchange rate policy," Central Bank President Gustavo Franco said in a statement. Local currency markets remained jittery after dollars continued to flee the country despite the Central Bank's decision late Friday to effectively raise interest rates from 19 percent to almost 30 percent. Brazil needs a healthy pile of cash reserves to defend the real, widely considered overvalued by 10 to 30 percent, against a possible speculative attack. Dollar outflows have soared in recent weeks as investors rattled by the economic crisis in Russia have pulled out of emerging markets in droves. Dealers estimated that another $850 million would flee the country by the end of the day on Wednesday, after they saw a net drainage of $885 million the previous day. While robust, Tuesday's outflow was well below a $2.925 billion drainage posted last Friday -- the biggest one-day outflow since last year's Asian crisis, when Brazil was forced to spend $7 billion to $10 billion to defend the real. So far this month, Brazil's floating and commercial foreign exchange markets have lost $7.636 billion, more than half the total of $12 billion which left the country in August. Foreign cash reserves are now estimated at just below $60 billion, compared with $69.36 billion at the beginning of August. Although this represents a sharp drop, Brazil's reserves still tower over the $11 billion held by Russia. Finance Minister Pedro Malan, speaking in the wake of a limp reception to spending cuts announced on Tuesday, said the government had not ruled out further budget cuts to shield the economy from the worldwide financial crisis which has battered local markets. "It will depend on the international context, on the domestic context and on the interaction between the two," Malan told Reuters in an exclusive interview on Wednesday. The Finance Ministry announced on Tuesday it was cutting four billion reais ($3.42 billion) from running costs and investment in 1998, with further cuts in the pipeline for 1999. The fiscal steps were aimed at slicing Brazil's nominal budget deficit, which currently stands at an unsustainable 7 percent of gross domestic product. But foreign analysts said the moves were too modest to fend off the global nervousness which has spilled over into local markets, and suggested they would have to be buttressed by more drastic measures following general elections on October 4. Malan said he was confident that markets would eventually understand the depth of the proposed cuts. "What happened yesterday was a question of exacerbated expectations of something very dramatic," he said. "That's why the first reaction was instinctive and not based on cold analysis." joelle.diderich@reuters.com)) Copyright 1998, Reuters News Service