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

To: Steve Fancy who wrote (8834)	10/5/1998 1:33:00 PM
From: djane	Read Replies (1) \| Respond to of 22640

A little gallows humor. Nuts to You, Says Brazil. ARTHUR HOPPE, SF Chronicle Monday, October 5, 1998 ©1998 San Francisco Chronicle URL: sfgate.com WISHING TO DO my part to save the global economy, I called up my friend Oswaldo in Sao Paulo. ''Oswaldo,'' I said, ''you Brazilians have got to raise taxes and tighten your belts.'' ''Thank you for your kind advice,'' said Oswaldo. ''Why?'' ''Because I need a new trash compacter,'' I said. ''The old one's making funny noises.'' ''That's a good reason,'' said Oswaldo. ''And my paying higher taxes would help?'' ''You bet,'' I said. ''No offense, but Brazil's economy is teetering on the brink. If you go down the tubes, all of Latin America will go with you, not to mention Asia, Russia and my trash compacter.'' ''So why should you get to wallow in luxury?'' said Oswaldo, who was beginning to sound a little testy. ''Go tighten your own belt.'' ''You obviously don't understand global economics,'' I told him. ''It's our grim duty to spend as much as our credit cards will bear in order to keep the wheels of industry turning among our trading partners overseas. It's a grueling sacrifice, but someone's got to do it.'' ''I'd be glad to help,'' said Oswaldo. ''The kids need braces, my car needs new tires and the driveway needs repaving. You can count on me.'' ''No, no, don't tell me your problems,'' I said. ''You must defend your cherished currency by not spending any of it. Higher taxes will help you achieve that goal. Instead, you must sell more goods abroad.'' ''How would you like 500 pounds of Brazil nuts?'' he said. ''Or what about a used car that needs new tires?'' ''Sorry,'' I said, ''But if you have a nice American-made trash compacter . . .'' ''Look,'' he said, ''where do you get off telling me what to do? Go talk to the Japanese or the Russians.'' ''I already called my friend Yutaka in Tokyo,'' I said. ''I told him to get busy and clean up his banking act and cut taxes.'' ''Cut taxes?'' ''Yes, we've decided he should spend more to stimulate his economy.'' ''What did he say?'' asked Oswaldo. ''What does 'sayonara' mean?'' ''And the Russians?'' ''Their number's been disconnected,'' I said. ''Let's see,'' said Oswaldo, ''you want the Japanese to spend more, us to spend less and the Russians to get a telephone.'' I sighed. ''Believe you me, Oswaldo,'' I said, ''it's not easy running the world. If it's not spraying weed killer on South American marijuana farmers or blowing up pharmaceutical factories in Sudan, it's telling governments around the world how to handle their fiscal affairs.'' ''It must be lonely at the top,'' said Oswaldo. ''Frankly,'' I said, ''sometimes I yearn for the good old days.'' ''Me, too,'' agreed Oswaldo. ''You mean before all this instant global communication created one big family?'' I asked. ''That's right,'' said Oswaldo, ''I mean when you minded your own business.'' ©1998 San Francisco Chronicle Page A19

To: Steve Fancy who wrote (8834)	10/5/1998 1:41:00 PM
From: Steve Fancy	Respond to of 22640

IMF hopes for Brazil plan soon-Tietmeyer Reuters, Monday, October 05, 1998 at 10:14 WASHINGTON, Oct 5 (Reuters) - Bundesbank president Hans Tietmeyer said on Monday that the International Monetary Fund hoped to have an overall plan to ensure stability in Brazil soon. "We want to reach an overall concept in the foreseeable future," Tietmeyer told a news conference on the sidelines of the World Bank and IMF annual meetings. Tietmeyer said that three main things had to happen for this plan to be achieved. First, Brazil itself had to present a credible program for its economy. Secondly, the issue of how the private sector could be involved had to be resolved. Thirdly, once these other two issues had been agreed, the IMF itself would decide on its contribution. "The IMF is prepared for the time when there is a satisfactory program available, and that must include the involvement of the private sector," Tietmeyer said. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8834)	10/5/1998 1:41:00 PM
From: djane	Respond to of 22640

Steve, just checking in during lunch. Kinda glad I've got way too much work to follow the market during the day. Thanks again for all your hard work. I've only had time to read the thread late nite. A couple questions I've been pondering: -Anyone buying before the final election results are released (on Friday)? -Any guesses when an IMF/World Bank/G-7 bailout of Brazil might occur? This week? -Is Brazil too big to fail for the US market/banks/brokerages? -Any possibility that Brazil will devalue its currency? -If so, is a 20-30% devalution already factored into TBR's value and would signify the bottom? Any discussion of these questions would be appreciated

To: Steve Fancy who wrote (8834)	10/5/1998 1:42:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shares slump 5 pct on post-election apathy Reuters, Monday, October 05, 1998 at 11:26 SAO PAULO, Oct 5 (Reuters) - Brazilian shares extended their losses in weak volume on Monday as an apparent victory by President Fernando Henrique Cardoso in Sunday's elections did not prove enough to boost optimism in local markets, brokers said. The key share index Bovespa (INDEX:$BVSP.X) was down 5.09 percent to 6,084 points in mid-morning trade after losing more than 2 percent shortly after the open. "Most investors are anxious about what the double packages -- internal fiscal measures and an external aid package -- will look like following the polls," said one senior trader at Deutsche Bank in Sao Paulo. Cardoso was seen winning a historic second term in office with over half the votes counted. Investors were now pressing for more information on the future shape of Brazil's economy, including details on much-expected international aid and government spending cut steps. Sao Paulo's benchmark Telebras receipts preferred (SAO:RCTB40) were felled by 5.67 percent to 78.20. Brokers said the fall in the Bovespa was accentuated by a substantial slide in the Dow Jones industrial index (INDEX:$INDU) and overnight slumps posted in Asian markets, especially Tokyo. The Dow Jones was down 1.9 percent by mid-morning trade. Weekend news that the Group of Seven meetings failed to produce concrete measures to save the world's economy weighed on sentiment there, brokers said. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8834)	10/5/1998 1:43:00 PM
From: Steve Fancy	Read Replies (9) \| Respond to of 22640

IMF-Brazil deal seen,no forex regime change-Franco Reuters, Monday, October 05, 1998 at 11:26 WASHINGTON, Oct 5 (Reuters) - Brazil's Central Bank President Gustavo Franco said on Monday he saw his country reaching an agreement with the IMF on precautionary funding to help Brazil weather global financial turmoil and ruled out any changes in Brazil's foreign exchange regime as part of a new fiscal package. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8834)	10/5/1998 1:44:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

LatAm bourses fall on G7, Brazil elections apathy Reuters, Monday, October 05, 1998 at 12:06 By Shasta Darlington SAO PAULO, Oct 5 (Reuters) - Latin American markets slumped in midday trade Monday as the apparent first-round victory of Brazilian President Fernando Henrique Cardoso at Sunday's elections failed to animate markets worried about fallout from the global financial crisis, traders said. A weekend meeting of the Group of Seven leading economic powers offered few concrete ideas for relieving the crisis, fueling concern over the fate of Latin America. "Nothing substantial came out of the G7 meeting," said Arnie Owen, managing director of capital markets at Cruttenden Roth. "Anything that sounded like a constructive idea would have helped, but there was nothing." As a result, the Dow Jones Industrial Average slumped 1.67 percent in early trade, spurring a sell-off in Latin America despite Cardoso's apparent victory in Brazil, which is expected to be the first step toward addressing financial problems there. "A Cardoso victory was already widely discounted," said Richard Casey, emerging market strategist at Donaldson Lufkin & Jenrette. "There's still a global flight to quality out of any risky investments." With about half the votes counted, Cardoso was seen reaping 50.62 percent of the vote, while runner-up left-wing Luiz Inacio Lula da Silva had only 34.65 percent of the vote. Still, Cardoso had only a fraction of the margin he needs to avoid a run-off with Lula. He must receive at least one vote more than all of his challengers combined to secure a first-round victory. "The narrow margin of his victory might actually cause some nervousness about his ability to get some of the fiscal measures through Congress," Casey said, referring to the budget-slashing steps that Cardoso was seen taking shortly after elections. As Latin America's biggest economy, Brazil's stability is key to shielding the region from a economic and financial turmoil. Brazil's bloated fiscal deficit of more than 7 percent of gross domestic product is considered the biggest obstacle to investor confidence facing the new administration. In Brazil, the key Bovespa (INDEX:$BVSP.X) blue chip index was down 5.33 percent at 6,068 points in midday trade. "Most investors are anxious about what the double packages -- internal fiscal measures and an external aid package -- will look like following the polls," a senior trader at Deutsche Bank said. In Argentina, the MerVal <.MERV> index of most traded shares slipped 2.89 percent to 363.27 points in early trade. "Cardoso's re-election was already factored in, Asia is down and Europe is mixed," a local trader summed up. The lack of concrete action from the world's leading economic powers following their weekend meeting in Washington was also put a drag on the bourse. "Whatever Brazil or the G7 announce is going to have to be much bigger than what the market is already expecting," fund manager Florencia Greco at BankBoston said. In Chile, the benchmark Selective <.IPSA> index fell as much 1.08 percent to 64.88 points in midday trade, tracking the decline on Wall Street. The G7 group's failure to reach any proposal's contributed to the fall, traders said. In Mexico, the key Bolsa <.MXX> tumbled 2.94 percent to 3,424 points in midday trade Monday. Mexico "is following the trend on the world's principal bourses and it's obviously dragged down by the Dow," a trader at a Bolsa said. "There was not-very-good news from the meeting of the G7 and in general things look negative," he added. In Venezuela, the benchmark IBC <.IBC> index fell 3.66 percent to 3,542.92 points even as international reserves edged above $13 billion. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service