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

To: Steve Fancy who wrote (11625)	1/14/1999 12:49:00 AM
From: djane	Respond to of 22640

Erdman commentary. This Brazil thing's overdone [This guy is definitely blowing against the wind these days...] cbs.marketwatch.com By Paul E. Erdman, CBS MarketWatch Last Update: 12:10 PM ET Jan 13, 1999 Columns & Opinion SAN FRANCISCO (CBS.MW) -- The markets have gone somewhat berserk. The reason is the Brazilian decision to double the rate at which it lets its currency devalue, from the former 7 percent per annum to 14 percent. It also increased the width of the band within which the real will be allowed to fluctuate. See full story The real promptly fell to the lower limit of 1.32. This is a sensible move, one which I advocated in a column last October. Referring to the floating peg, I suggested that Brazil "would be smart if they would increase that rate to at least 10 percent." I think the markets are way overreacting. The Dow dropped 258 points on the news. See Market Snapshot, Bond Report and World Markets. I repeat what I wrote earlier this week: the financial situation in Brazil is in no way comparable to that of Mexico in 1994-95 or Russia in 1998. Recession in Brazil this year will spread to all of Latin America, but this severity of this setback will in no way resemble what has been happening in Asia during the past 18 months. So keep things in perspective. Economist and author Paul E. Erdman is a columnist for CBS MarketWatch. © 1998 MarketWatch.com, L.L.C. All rights reserved. Disclaimer. MarketWatch.com is a joint venture of CBS and Data Broadcasting Corporation. CBS and the CBS "eye device" are registered trademarks of CBS Inc.