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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: TRIIBoy who wrote (1158)	1/5/1999 1:53:00 PM
From: Sir Auric Goldfinger	Read Replies (1) \| Respond to of 19428

VTCH now below 200 day moving average, volume confirmation.

To: TRIIBoy who wrote (1158)	1/10/1999 4:44:00 PM
From: Sir Auric Goldfinger	Respond to of 19428

More great news for VTCH:"Brazilian Shares Continue to Decline Amid Uncertainty After State's Move An INTERACTIVE JOURNAL News Roundup One day after roiling regional markets by declaring a moratorium on debt owed to the Brazilian government, the governor of Brazil's third-wealthiest state Friday cast doubt on his government's ability to make $108 million in Eurobond payments due in February. Minas Gerais Gov. Itamar Franco's comments were published in a Brazilian daily as President Fernando Henrique Cardoso, in a speech to his cabinet, warned he won't stand for such pressure tactics. In a veiled warning to the regional leader that the debt owed the federal government must be paid, Mr. Cardoso said "breaking the law won't be tolerated." Mr. Cardoso is under great pressure to enact fiscal reforms in exchange for International Monetary Fund aid designed to shield South America's largest economy from collapse. Traders said the president's speech could have been firmer. The state of Minas Gerais has about $17 billion in federal debt, to be paid in monthly installments of $67 million over a 30-year period. Any sign that the federal government's solvency could be further threatened by a revenue gap is enough to spook foreign investors, who left the Brazilian market in droves before the IMF rescue package was announced in the fall. Since then, the government's difficulty in getting some of the IMF-mandated reforms through the legislature have continued to unnerve investors. Brazilian stocks tumbled more than 5% Thursday following the Minas Gerais debt-moratorium announcement, and declined another 2.5% Friday on continued jitters about the debt payments and as unsubstantiated rumors swirled that Finance minister Pedro Malan was about to step down. Adding to the turmoil was a bomb threat of the Finance Ministry's offices in Brasilia, which forced officials to evacuate. Meanwhile, Mr. Franco, in an interview published in a Sao Paulo newspaper Friday, said he would meet with his state Finance Ministry Monday to determine whether his government would be able to make payments on Eurobond debt. "We'll spare no effort to meet [our international commitments] and we'll see if it's possible or not to pay them," Mr. Franco told the daily Folha de Sao Paulo. On Thursday, the federal government issued an official communique denying rumors that Minas Gerais would default on the Eurobonds. The statement also said Minas Gerais has $78.3 million deposited in a joint account with the Treasury, and that the funds are dedicated exclusively to external debt settlements. Worries about a state default on the federal debt and Eurobonds and the possibility that other Brazilian states could follow suit with their own payment halts were behind the Sao Paulo Stock Exchange's declines Thursday and Friday. But even though markets already jittery about Brazil's precarious financial situation and emerging economies in general reacted negatively to Mr. Franco's comments Thursday, his remarks are seen as more political than economic. And few analysts think Mr. Franco will really suspend payments to the federal government. His state could lose federal funds and be forced to pay quadruple the 7.5% interest rate it now pays. "It's obvious he won't go through with it," said Carlos Ari Sundfeld, professor of constitutional law at Sao Paulo's Catholic University. "The government has a fantastic arsenal to wage this kind of war and has made it clear it won't hesitate to use it." Some feel the threat is part of a long-range political plan by Mr. Franco, who was president from 1992 to 1994 and has made no secret he wants the post again. Despite concerns, other governors had yet to follow Mr. Franco's example. "I am not going to push the state into a confrontation with the federal government," said Anthony Garotinho, the opposition governor of Rio de Janeiro state. "We want dialogue." Gov. Olivio Dutra of the southern state of Rio Grande do Sul said his state's debt is "unpayable," but he said he intends to negotiate better repayment terms. The affected payments of about $67 million a month on total debt of about $17.5 billion owed the federal government are part of a 1997 accord under which the government agreed to assume the state's federal debt in return for long-term repayment at highly subsidized interest rates of 6%, compared with the local interbank rate of about 29%. The moratorium shouldn't affect the federal government's fiscal health since the government can withhold disbursements that currently exceed those debt payments. In the newspaper interview, Mr. Franco said he decided to declare the moratorium because the federal government was "too aggressive" when his state asked for a revision to the debt-rollover contract. Under the debt rollover contract inked with the federal government last February, Minas Gerais has to pay 12.5% of the state's income monthly to the federal government. "We can't take out 80 million reals from our coffers every month for thirty years to pay back the federal government," Mr. Franco said in the interview. "That's why we think the federation's structure has to be revised." Asked how the state plans to overcome the problem, since the federal government seems to be indicating that another round of debt negotiation isn't an option, Mr. Franco said he wouldn't address the issue. interactive.wsj.com