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

To: Steve Fancy who wrote (9607)	11/11/1998 4:26:00 PM
From: James C. Mc Gowan	Read Replies (2) \| Respond to of 22640

Question RE: Brazil local political scene Just picked up this thread. I had been looking for a parallel to the Asia Forum thread to follow events in Latin America. Thanks to all participants for useful info. It appears from todays reports that their may be significant opposition to the basket of reforms Cardozo needs approved . Is the current "delay" in funding by IMF, Exchange Stabilization Fund, et al. that was anticipated likely to be further delayed until at least the social security provisions are agreed to? Is it reasonable that the participants in the bailout are holding a gun to Brazils head, e.g. holding back final approval and transfer of funds, to Cardoza until such time as the legislation is passed on reforms? From the timetable for various reform bills continuing thru the end of this year and likely, into the next years legislative session, how much reassurance that reforms will be enacted will be necessary to free up the funds? TBR is split up early next week; Fed Reserve meets and may/may not cut further this meeting; Brazil legislators not showing up for votes; behind the scenes haggling over who will pay up for bailout money; Seems to me that this deal could go sour, at least short term, and short term is critical for Brazil/Latin America Any thoughts? vocex

To: Steve Fancy who wrote (9607)	11/11/1998 5:12:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Scandal Charges Divert Attention From Brazil's Econ Crisis Dow Jones Newswires BRASILIA (AP)--Allegations that Brazilian President Fernando Henrique Cardoso and several close political allies have an overseas multi-million dollar account are diverting attention away from his attempt to revive South America's largest economy. Over the weekend documents surfaced allegedly showing Cardoso, Sao Paulo Gov. Mario Covas and Health Minister Jose Serra with a $368 million secret Cayman Islands company account. Late Wednesday, the scandal rumors caused the Sao Paulo stock exchange to tumble nearly 3%. "This is a motive for profit taking," said one stock trader. "Foreign investigators took advantage of these rumors to fill their pockets." In Rio, Minister Serra said the documents were falsified by right-wing opposition politicians and the government ordered the Justice Ministry to find the culprits. "Whoever did it committed a very serious crime," he said. Yet some legislators are asking for a full congressional probe. "These documents must be investigated," Congresswoman Marta Suplicy told reporters Wednesday. "Nobody is above suspicion." The allegations against Cardoso occurred soon after he introduced drastic belt-tightening measures to qualify Brazil for an International Monetary Fund rescue package, expected to be announced over the next few days. The government is confronting an enormous budget deficit, recession and record unemployment. Moreover, it was revealed that 27 private conversations were secretly recorded between Cardoso, Luiz Carlos Mendonca de Barros, the communications minister, and Andre Lara Resende, the president of the state-run National Economic and Social Development Bank. Its contents haven't been publicly revealed and the tapes's authors haven't been identified. According to members of the opposition Workers Party (PT), Paulo Maluf, a conservative politician who recently lost the Sao Paulo gubernatorial race to Covas, offered the documents implicating Cardoso to PT leaders before last month's general election. The PT, however, turned them down since they were photocopies. On Wednesday, Maluf denied the charges saying "I have never seen them (the documents) or know anything about it."