Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Trey McAtee who wrote (56701)	10/30/1998 2:46:00 AM
From: Tundra	Respond to of 58727

Thread, The following is an article about Brazil. Although alternative positions exist, several articles also concur. A major piece in the NY Times did as well. Brazil to slump in 1999 -- Goldman economist NEW YORK, Oct 29 (Reuters) - Brazil's economy faces a recession in the year ahead, but chances of a forced currency devaluation there are less than 50 percent, according to a Goldman, Sachs & Co. economist. "It's going to be a close call," William Dudley, director of U.S. economic research at Goldman, Sachs said Thursday at a business forum held by Bank Leumi USA. Dudley added that the fate of Brazil's economy will turn in large part on the direction of the government's interest rate on its short-term debt, which now hovers near 49 percent. A sharp drop in interest rates would make debt service cheaper, helping defuse the crisis over Brazil's widening budget deficit and preventing the devaluation of the country's currency, the real, Dudley said. Even as Brazil attempts to tighten its belt through austerity measures that would cut the federal deficit by $23.5 billion dollars in 1999, the country is faced with some immediate obstacles. A staggering $42 billion in short-term debt comes due next month, and some economists say that at present interest rates, Brazil cannot afford to refinance that debt. Since global financial turmoil touched off an economic crisis in Latin America, Brazil's central bank has raised interest rates drastically in an effort to stem the flight of capital to less risky markets. Nevertheless, capital continues to exit Brazil, with more than $1 billion in outflows on Wednesday. However, traders said Wednesday's flight was largely to meet payments on a maturing Eurobond. A drop in market rates would be a vote of confidence in the Brazilian economy from local investors and the international community, according to Dudley. But without that, "eventually, Brazil will bleed to death," Dudley said. "All the savings they get in terms of tightening fiscal policy, by cutting spending and raising taxes will be eaten up by the increase in interest expenses." On Thursday, the Brazilian government submitted plans for $84 billion in austerity measures over the next three years to its Congress, attempting to pull the country back from the brink of financial collapse. The success of the package is seen as a key to Brazil's efforts to gain a $30 billion aid package from the International Monetary Fund. While lower interest rates would contain the damage to Brazil's economy, the country is still headed for a recession in 1999, according to Goldman Sach's Dudley. He estimated the country's gross domestic product would shrink by 2.0 percent next year, weighing down economic growth in all of Latin America. "The hope in Brazil is that if they do the right thing on the fiscal side, that will buy them enough time to allow the currency to depreciate by seven percent a year, and, in two to three years time, the Brazilian real will no longer be overvalued," he added. 00:22 10-30-98

To: Trey McAtee who wrote (56701)	10/30/1998 8:22:00 AM
From: Byram	Read Replies (2) \| Respond to of 58727

*** OT ****** Trey - If I see them putting out those fliers I will do that...as I hate the "paper Hangers" -- With the exception....If they hang on my pickup I'll get the plates for you...Heck it is about a year old - already has about 35,000 miles - half of which was in the pasture.... BUT!!!!!! - If I catch them hanging paper on my wifes '98 Mustang Cobra...... the words "Road Kill" means something totally different...and I don't think you will find them at home...LOL Byram