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 Another bank has cut the 2009 economic growth forecast for Brazil: this time, JPMorgan Chase & Co. lowered Latin America's largest economy expansion estimate for this year from 2% to 1.5%, as global recession takes its toll on industrial production and business confidence.
"We think the market is not taking into consideration the potential for continued disappointing surprises on the real economy front," JPMorgan said in a report.
"Not only is the market underestimating the potential degree of the economic slowdown in the Brazilian real economy, but also earnings growth expectations for 2009 remain too high, in our opinion".
Latin America's largest economy is now in a "technical recession," as defined by two negative consecutive quarters of negative growth, the report said.
The bank estimates that Brazil's economy may have shrunk 4.6% in the fourth quarter of 2008 from the previous quarter, and that policy makers will respond by cutting Brazil's overnight rate 2 percentage points this year to 11.75%.
JPMorgan joins other banks such as Morgan Stanley that in recent weeks have lowered their growth forecasts for Brazil amid a collapse in consumer spending and demand for commodity exports. Brazilian vehicle production plunged 54% in December from a year earlier to a nine-year low, the country's automakers said Friday, January 9.
Brazilian industrial production fell 6.2% in November compared to the same month a year ago, which is the most in seven years according to Brazil's national statistics agency.
"2009 will be a year of sacrifice," Sao Paulo Federation of Industries trade director Roberto Giannetti da Fonseca told the Estado de S. Paulo newspaper.
Brazil's currency has lost more than 45% of its value against the greenback since August, now trading at 2.2 reais to the US dollar. Exporters had hoped the sliding currency would boost demand for Brazilian goods, but a spreading recession has kept down sales in Brazil's two biggest markets, the European Union and the United States.
Exports are expected to drop 17.7% to 163 billion USD in 2009, the first decline since 2000, according to José Augusto de Castro, vice president of Brazil's Foreign Trade Association, known by its Portuguese acronym, AEB (Associação de Comércio Exterior do Brasil).
The decline will likely shrink Brazil's trade surplus 31% as the economic downturn deflates prices for Brazil's top commodity exports, including iron ore and soy, the AEB said.
Still, the surplus, US$ 24.7 billion in 2008 will hover around US$ 17 billion because domestic demand for imports is due to slide along with Brazil's own slowing economy, Castro said.
With expectations of declining exports and the need to bring in dollars, Brazil's government announced its plans to sell bonds in international markets, the first such action in eight months.
The weaker economic outlook will also give Brazilian policy makers room to begin lowering the central bank's benchmark rate from its current two-year high of 13.75% as soon as this month's meeting.
Policy makers will cut rates by a half-point to 13.25% this month and the benchmark rate will end the year at 12%, according to a central bank survey of 100 economists taken January 2.
Mercopress
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The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.
JP Morgan is a Cheater,Lier and Fear monger. Our economic team lead by the President and Delfim Netto is not pessimistic like JP Morgan. Delfim is an expert in such matters and we trust his instincts. So ya all quit worrying.
BTW, JP Morgan is about to be taken over by some Swiss investors.