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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2085)	12/16/1998 2:05:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 99985

James, Brazil--this must be how the world works south of the Border. they have an unstable situation and the type of things occurring below can create political impasses that will cause a currency devaluation. So remember folks that the ease of movement can soar to the downside if Brazil, Iraq, The Prez, etc flair up. Best Regards, John December 16, 1998 Brazil's Legislators Move to Give Themselves Raises at Austere Time By PETER FRITSCH Staff Reporter of THE WALL STREET JOURNAL SAO PAULO, Brazil-Brazil's legislators are proposing to give themselves a 59% pay raise at a time when the economy is slipping into recession and the government is promising steep budget cuts to appease lenders like the International Monetary Fund. Under an agreement reached Monday evening among the heads of Brazil's three branches of government, senior public servants will be able to earn as much as $127,000 a year as of Feb. 1. That translates to a salary increase of 59% for congressmen and 49% for President Fernando Henrique Cardoso. Mr. Cardoso now earns $85,000 a year. Brazilian lawmakers earn $80,000 a year, though they often receive much more due to generous perks. U.S. congressmen, by comparison, earn $136,700 a year. The salary proposal will be sent to Congress in February, where it will face little, if any, opposition. Critics were quick to blast the move. "It is absurd to talk to the people about sacrifice and then raise salaries" for the highest-paid government workers, said Luiz Marinho, president of the nation's largest metal workers' union. The move will not affect the salaries of most of Brazil's civil servants. Mr. Cardoso's office, which had argued for a smaller rise, estimated the increase will cost the federal government $100 million next year and said budget cuts will be needed to make up the difference. That cost could rise to as much as $500 million if state legislatures and courts try to follow suit, which is considered likely. Brazil recently announced $23.5 billion in tax increases and budget cuts next year to try to trim a $65 billion budget deficit. The government needs to make good on that fiscal goal in order to meet the terms of a $41.5 billion rescue plan underwritten by the IMF, and others. To protect its currency from the spread of global financial crisis, the central bank has boosted overnight bank interest rates to 34%. The move to increase salaries is actually part of an attempt to cap civil-servant wages, which have been frozen since the last big increase in 1995. Though salary ceilings for public office currently exist, retirement benefits and multiple salaries often result in an explosion of payouts to government workers. State assemblymen in the poor northeastern state of Alagoas, for instance, make $189,000 a year, including rent and transportation subsidies, payments for attending extraordinary sessions and other benefits. Separately, stocks recovered Teusday from Monday's sharp drop, lifted by a recovery in New York share prices. The Sao Paulo Stock Exchange's index rose 5.3% to 6934.

To: John Pitera who wrote (2085)	12/16/1998 2:35:00 PM
From: Les H	Respond to of 99985

The Brazilian market's down about 30% this month. quote.yahoo.com^BVSP&d=t 12/16/98 VOLUME REVERSAL SURVEY By Mark Leibovit Following November 27 peak in the Dow Industrials on November 30 my work generated a Negative Volume Reversal (tm). At that time I suggested that we were in the throes of a 1000 point correction. That correction also represented a halfway retracement of the 2000 point advance that we experienced since August lows. Another Negative Volume Reversal (tm) was formed on December 8 and the downtrend was reconfirmed. On Monday we touched 8610.63 (theoretical intra-day low) and measuring off the record 9483.52 peak we had declined 873.00 points. Apparently, that was enough. Volume slowed to the downside in several key indexes. Bearish sentiment was running high. The bond market began to falter (which had been fairly consistently moving inverse to stocks). And, we intersected a 'change point date on my Annual Forecast Model. A Positive Volume Reversal (tm) was formed on Tuesday. In my view this signals the end of the correction and ultimately the base from which we should see new highs in the major indexes. Like all bottoms we could see a retest or related jitteryness for a few days, but with the news environment being negative this is to be expected. Watching CNBC this afternoon provided the coup de grace. A specialist from the NYSE was interviewed who asserted that things aren't all that great and that in all probability the rally would go nowhere. Now we all know the specialists do the opposite of what they say and for some unknown reason have suddenly come into the sun and are talking. For years, they kept to themselves quietly manipulating stocks. It's all very interesting. Mark Leibovit VRS