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

To: Steve Fancy who wrote (11788)	1/15/1999 11:48:00 AM
From: Bob Howarth	Read Replies (1) \| Respond to of 22640

Back to fundamentals I think. The currency is set now by the market and not artificially. Debts are what they are and interest rates should get set based on normal types of risk rather than currency protection. Now that the dust of currency nonsense has settled, the real problems in Brazil can be more easily analyzed and focused on. Brazilian liberal (communist?) opposition can't blame the peg for any of their problems anymore. First and 99% of the problem: It is up to Brazil to actually pass SS reform in a fiscally responsible manner. The talk that 70% of reform is done is nonsense. None has really occurred until SS / pensions are taken care of. Second, the debt default situation has to be cleared up within the government. These two issues perhaps make the bearish case that the government and constitutional system in Brazil are so screwed up that things will probably get a lot worse before they get better. As an aside I think people are far too bearish on Mexico. Their government system has gotten quite interesting over the last couple of years and they seem to have the internal system structure to support the resolution of political party differences in a rational democratic fashion. So: quick rally then a painful downtrend for several months I think until congress actually does what it needs to do.