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.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Tom Byron who wrote (26063)	1/12/1999 10:45:00 PM
From: long-gone	Read Replies (1) \| Respond to of 116781

All, a little perspective please. XAU far above lows.

To: Tom Byron who wrote (26063)	1/12/1999 11:28:00 PM
From: Alex	Read Replies (2) \| Respond to of 116781

Hi Tom. Thanks for the heads up................... FOCUS-Brazil crisis worsens as $1 bln floods out (recasts with outflow, analysts comments grafs 1-8, pvs SAO PAULO) By William Schomberg BRASILIA, Jan 12 (Reuters) - Nearly $1 billion flooded out of Brazil on Tuesday, the highest daily loss since Latin America's powerhouse economy narrowly avoided a devastating devaluation last year and a sign that a new crisis was deepening fast. Traders estimated outflows at $935 million by early evening, compared with $187 million Monday. Analysts said concern over Brazil's chances of surviving Asia-style financial collapse was quickly turning to panic. ''There's really very little the government can do now,'' said Felipe Garcia, a Brazil specialist at New York consulting firm IDEA. ''All they can do is try to manage expectations, stick to their plan and cross their fingers.'' Brazil, the world's eighth largest economy, relies on foreign dollars to keep up foreign reserves and protect itself against speculative attack on its currency, the anchor of the country's newfound economic stability. Only the announcement of a $41.5-billion credit program led by the International Monetary Fund and 20 of the world's richest nations saved Brazil from a devaluation in November. But this time, analysts said, Brazil's hands appeared to be tied. Last October, Brazil hiked interest rates to keep capital in the country, but that option, if repeated, would only exacerbate an already huge budget deficit, said Constantin Jancso, an economist with MCM Consultores in Sao Paulo. ''Last year, there was always the expectation of an IMF agreement to look forward to,'' he said. ''There is no sign of any cavalry to save the day now...Tomorrow is going to be critical.'' The latest crisis for President Fernando Henrique Cardoso began last week when the country's third biggest state Minas Gerais announced a 90-day moratorium payments of its $13.4 billion debt with the federal government. While the sums involved in the moratorium -- about $200 million -- are tiny compared with Brazil's plan to save or raise $23.5 billion in 1999, markets were stunned by the move, fearing it might derail crucial cost-cutting measures in Congress. ''There's nothing different in Brazil's economic fundamentals now compared with two weeks ago,'' said analyst Jancso. ''But last week's moratorium was a bombshell that shattered expectations.'' Earlier Tuesday, President Fernando Henrique Cardoso tried in vain to turn around market sentiment. ''The market can calm down, the government knows what it's doing, what it's going to do,'' Cardoso told reporters in Rio de Janeiro before leaving for a short seaside vacation. ''We will pay our debts, all will honor their debts.'' The United States, which has some $35 billion in private investment in Brazil, tried to sound optimistic too. U.S. Treasury Secretary Robert Rubin said Cardoso had the support of the global community in his economic program. But Rubin added later that there were ''no certainties'' Brazil would succeed. The Sao Paulo stock exchange plunged 9 percent in the afternoon before crawling back a bit to close down 7.6 percent. European stock markets, fearing global damage from a full-blown Brazilian crisis also fell. Spanish companies with investments in Brazil led the Madrid stock market down 2.3 percent and Latin American shares and currencies suffered too. Argentine President Carlos Menem, whose country's livelihood is strongly linked to Brazil's economy, said he did not expect his neighbor to face devaluation. ''With Brazilian reserves as they are at present, they can face any sort of crisis or run in Brazil,'' Menem told a business group in Washington. But Brazilian debt prices in New York tumbled as the extent of Tuesday's outflows emerged, with the most traded C Bonds closing down nearly 6 percent from Monday. If Tuesday's capital outflow is confirmed, $2 billion will have left Brazil since the beginning of the month. That compares with reserves two weeks ago of $38 billion, excluding a $9 billion installment payment for international loans. Traders said Brazil's Central Bank had to support the real by selling dollars to keep the currency in its crawling band. The Central Bank was due to announce a new band for the real Wednesday in what officials said was a routine move. Congress was due to vote on fiscal measures Wednesday, including an item to raise an extra $1.8 billion in corporate tax. But whips said they were studying a possible problem with that proposal and were due to consult with tax experts. biz.yahoo.com