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

To: Bulls who wrote (7930)	9/12/1998 2:12:00 PM
From: MGV	Read Replies (1) \| Respond to of 22640

Rate hike seen chilling Brazil's economy biz.yahoo.com It seems clear to me that 49.75% is artificially high and required by the currency crisis. Assuming Cardoso wins in round 1 and SS reform follows quickly thereafter my guess is that 50% is cut very swiftly to less than half. If that happens, the economists will jump on board revising expected GDP growth upward. In sum, this article provides static analysis. The rates are a short term palliative - the best alternative for the moment over capital controls and devaluation. They will not be the best alternative after 10/4. The dynamics in Brazil suggest the rates will not remain high for long.