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Brazil Pushes Panic Button and Slaps Restrictions on 60% of Imports PDF Print E-mail
Written by Newsroom   
Wednesday, 28 January 2009

Among restricted imports: surgical instruments. The Brazilian government announced it has imposed restrictions on 60% of imports "to soften" the impact of the global crisis in its trade balance, which in the first four weeks of January has registered a totally unexpected deficit of 645 million US dollars.

The Brazilian Foreign Trade Department has begun to demand non-tariff requirements and import licenses for 17 trade sectors which represent 60% of imports.

"The decision means the return to the control of imports which Brazil applied strictly in the eighties and seventies," pointed out the prestigious daily Folha de S. Paulo in its Tuesday front page edition.

The measure is geared to reverse the dramatic drop in Brazilian exports and the difficult situation faced by the domestic industry, where in the state of São Paulo only, last December 120.000 jobs were lost.

Actually 650.000 Brazilians joined the ranks of the unemployed during December allegedly because of the impact of the global crisis and the fall in exports, points out the São Paulo publication.

Some of the sectors which now require an import licence are the wheat and flour industry, plastics, iron and steel, copper, aluminum, capital goods, electric equipments and machinery, textiles, auto parts, automobiles, surgical and optical instruments.

Until this latest round decided by the Foreign Trade Development Office, non tariff barriers in Brazil only applied to 10% of imports.

"Undoubtedly it is a protectionist measure. It's a crisis year and the government is looking how to defend itself in trade terms," said Gustavo Dedivits, president of the importers' association.

Roberto Gianetti da Fonseca, head of the Trade Department from the powerful FIESP, São Paulo's Federation of Industries, said the decision "seems a bit precipitated and taken out of fear."

In the first four weeks of January Brazilian imports were 645 million US dollars higher than exports, a monthly report that has not happened since 2000, according to the Ministry of Development and Foreign Trade.

LatAm's Job Losses

The International Labor Organization (ILO) says as many as 2.4 million Latin Americans could lose their jobs this year due to the global economic crisis.

The ILO says urban unemployment in Latin America will increase for the first time since 2003, to between 7.9% and 8.3%.

According to an advance of the Global Employment Trends report released by the ILO regional office in Lima, Peru's capital, the global slowdown will reverse last year's gains in urban employment.

Joblessness last year dropped to 7.4% from 8.1% in 2007, in the region as a whole. However this was in the context of a regional average GDP growth of 4.6%, while the forecast for 2009 is 1.9%.

ILO is expected to issue its full annual Global Employment Trends report (GET) assessing the impact of the global financial crisis on employment, unemployment, working poverty and labor market vulnerability in 2009 later this week.

Mercopress

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...
written by João da Silva, January 28, 2009
Brazil Pushes Panic Button and Slaps Restrictions on 60% of Imports


For anyone who is keeping track of the Stats during the past 3 months and has read about the economic history of Brazil in the 70´s and 80´s, this news does not come as a big surprise. What the article does not say is that it will take about 2 months to get an import license.It means the government is temporarily closing the market for imported goods including the essential ones ( like capital goods,machinery,etcsmilies/wink.gif in order restrict the outflow of Foreign currency.

There are many questions that will be answered only in the coming months:

1) Do the license requirements apply to the products imported from our Mercosul partners?

2) Will it further increase the domestic prices for essential items like beef, poultry and dairy products some of which have undergone almost 70% increase at retail level between Jamuary 2007 and now?

3)Will it delay the reopening of Doha round of talks?

4)Will this arrest the growing number of job losses in the industries ?

It would be interesting to hear the opinion of our fellow bloggers.
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WHEN OTHER COUNTRIES FALLOW BRASILS LEAD .
written by Forrest Allen Brown, January 28, 2009
on imoprts brasil will start crying not fair you are picking on us.

will this drop the price of food in brasil ,NO as the owners have gotton use to
getting the profits from forign markets and will not sell to brasilians at a lower price ,
even though most have lost there jobs at the same compaines .

ANOTHER THING lula and OBAMA can talk about
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Not A Surprise
written by VinnyCarioca, January 28, 2009
"Undoubtedly it is a protectionist measure. It's a crisis year and the government is looking how to defend itself in trade terms," said Gustavo Dedivits, president of the importers' association.

As I stated in previous posts, President Obama has taken a protectionist posture throughout the presidential campaign so I will reasonably surmise that this sentiment will germinate.
ANOTHER THING lula and OBAMA can talk about

Like I said before, Obama should enjoy the adulation while it lasts. I don't think Lula is going to be on the same page on this issue.
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VinnyCarioca
written by João da Silva, January 28, 2009
I am glad that you joined us, Vinny.

As I stated in previous posts, President Obama has taken a protectionist posture throughout the presidential campaign so I will reasonably surmise that this sentiment will germinate.


I also think. He is there with a formidable task ahead of him to protect the interests of his fellow citizens, especially the ones who lost their jobs because of the outsourcing. So he is bound to be tough in trade negotiations with all the countries including Brazil. Of course he suggested to Lula that he was in favor of restarting the Doha round of talks, which in my opinion is dead.

Also IMHO, the during the next 2 years, the countries are going to fight with each other based on the proverbial "cada um por si" principle in their trade talks. It would be interesting to carefully monitor so that one´s personal and business financial losses are minimized !

Having said it, let´s await comments from our other fellow "Pundits" like DnB,Agustus,Ch.c, Ric, etc; smilies/grin.gif
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...
written by João da Silva, January 28, 2009
Dear all,

The government has suspended this measure. For those who can read Portuguese, I am posting a link below:

http://www.estadao.com.br/econ...4510,0.htm

They must have read my comment. smilies/wink.gif smilies/cheesy.gif smilies/grin.gif
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Suspended Measure
written by VinnyCarioca, January 28, 2009
That was quick! I'm still waiting for the suspension of the strict rules for making caipirinhas. smilies/cheesy.gif
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VinnyCarioca
written by João da Silva, January 28, 2009
I'm still waiting for the suspension of the strict rules for making caipirinhas


Vinny, my dear fellow, the rules are quite flexible even for "Gringos" like ya. Creativity is the keyword regardless of nationality, color or creed. smilies/wink.gif I hope you have learn 't to make Caipirinha with good cachaça. Some prefer with Vodka, BUT....BUT...., I like with well blended cachaça.It has real Brasilian identity, if you don't mind my saying so.

You think Ch.C is still alive? smilies/cheesy.gif
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Joao
written by VinnyCarioca, January 28, 2009
I hope you have learn 't to make Caipirinha with good cachaça. Some prefer with Vodka, BUT....BUT...., I like with well blended cachaça.It has real Brasilian identity, if you don't mind my saying so.

I only use good cachaca (preferably from Parati) smilies/wink.gif in my caipirinhas. I've actually become rather snobbish about that. smilies/smiley.gif

Brasilia - The Minister of Finance, Guido Mantega, announced this Wednesday, 28, the government decided to suspend the adoption of the license prior to imports. Segundo ele, a medida causou ruídos e foi mal interpretada. He says the measure has caused noise and was misinterpreted.

Your right Joao. Your noisy comments forced them to relent. You may have single-handedly salvaged the Doha round. smilies/cheesy.gif
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VinnyCarioca
written by João da Silva, January 30, 2009
Your right Joao. Your noisy comments forced them to relent. You may have single-handedly salvaged the Doha round.


Thanks Vinny, sometimes a man has to muster up his courage to question the rash decisions made by the "Rulers" smilies/wink.gif

On a serious note, how are things in the Silicon Valley ?
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Joao
written by VinnyCarioca, January 30, 2009
I'm not in Silicon Valley. I am in La La Land (SoCal). My wife (a real Carioca) is beauty itself so happiness abounds.
Business is little tough but not a disaster. I'm in manufacturing and lucky enough to have quite a few long term relationships in servicing the full spectrum of industry. Some sectors are doing quite well right now such as food processors. Some are terrible such as anything tied to the housing industry and automotive. We'll see...a lot of fear and pessimism out there. I don't know how your outlook is, but, from the information I get...it's going to get pretty rough.
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VinnyCarioca
written by João da Silva, January 30, 2009
I'm not in Silicon Valley. I am in La La Land (SoCal). My wife (a real Carioca) is beauty itself so happiness abounds.


Hah hah, my apologies. I thought you were in the "Valley" ( I avoid the word "Silicon" while talking to Non-Technical fellow Brasilians! Just ask your beautiful Carioca wife why) .

I am glad that your business is tough, but not a disaster. I am sure you will come out unscathed with the positive attitude.

I don't know how your outlook is, but, from the information I get...it's going to get pretty rough.


I am not a pessimistic by nature, but I think that it is going to be rough. Yesterday I had a meeting with an old gentleman in his late 70´s. Very traditional Brazilian and he is predicting that every sector of the economy is going to confront problems during the next 18 months with job losses. I asked him about Telcos and he said they would be the last, but can not escape. He was highly critical of the irresponsibility of the Government in promoting "consumerism", especially in the Automotive sector.He thinks that it is time for the Brasilians to give value to small things for which they fought hard to conquer. Time to innovate and keep our existing trading partners happy and conquer new territories. He was not pessimistic about the capacity of the Brasilians to confront the crisis, but indeed questioning the "Leadership". It was a good meeting and I tend to share his views. smilies/cheesy.gif
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Joao
written by VinnyCarioca, January 30, 2009
( I avoid the word "Silicon" while talking to Non-Technical fellow Brasilians! Just ask your beautiful Carioca wife why)

I don't have to. I've been to Rio enough times to deduce that one. smilies/cheesy.gif
I am not a pessimistic by nature, but I think that it is going to be rough. Yesterday I had a meeting with an old gentleman in his late 70´s. Very traditional Brazilian and he is predicting that every sector of the economy is going to confront problems during the next 18 months with job losses.

I concur. I am not pessimistic by nature also but, in early 2007, I became so when I noticed that our Federal Reserve was pumping an unprecedented amount (at that time) of liquidity into equity markets...which befuddled me. (I purchased financial information that monitored federal liquidity injections) At that time our "leaders" here in the U.S. were touting the solid economy and were soothing any concerns of sub-prime contagion or anything harmful to our versatile economy. They knew damn well what was coming. I believed it back then and I believe it now. Another belief of mine is that there will become a culture of saving and frugality. People (in general) are going to remember what it felt like to spend spend spend then lose lose lose while having no savings as a safety net. The lesson of a lifetime.

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A Culture of Saving and Frugality
written by VinnyCarioca, February 01, 2009
Coincidentally, I saw this from the AP:
http://hosted.ap.org/dynamic/stories/S/SAVINGS_FRUGAL_SOCIETY?SITE=ORMED&SECTION=HOME&TEMPLATE=DEFAULT
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VinnyCarioca
written by Célio Borba, February 01, 2009
Thanks for the link and I fully concur with the following paragraph:

"The generation that lived through the Great Depression was very conservative in their spending and aggressive in savings," said Scott Hoyt, senior director of consumer economics at Moody's Economy.com. "I think we're going to have a set of consumers who are moving in that direction because they don't have that much faith in their assets."


I have talked to some people who lived through the Great Depression in U.S. and they passed on this habit to their children. In Brazil it was no different. The old German ,Italian and Nippo Brazilians in the South had and some still have this habit. What really changed the Brazilian habit of saving was the reckless decision taken by the first "democratically elected" government after the Military gave up power. That government headed by Fernando Collor de Mello decided to freeze the people´s Savings Bank account for 12 months and pay back the amount in 18 equal installments with government manipulate interest rate. This was done to supposedly put a brake on spending and thus a high inflation rate. The objective was not really accomplished. In terms of dollar value, people got about 40 % of their original savings back.Collor was subsequently impeached for different reasons, but a large majority of Brazilians lost its faith in Savings. The policy of the successive governments including that of Lula is to encourage spending whether be it public or personal. Therefore, it did not come as a big surprise to me when Lula appeared on the TV in the beginning of December asking people to spend! Of course, the right minded Brasilians did not take him seriously!!

The article you sent makes lots of sense. It is time for both Americans and Brasilians to reflect on the message and relearn about frugality and savings.
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Joao......Ohhhh yesssss...I am still alive and well, full of life !
written by ch.c., February 02, 2009
On the subject of the article DONT FORGET WHAT ROBBING HOOK EXPECTS :
THAT DEVELOPED NATIONS DONT GO TO MORE PROTECTIONISM....BUT THIS IS WHAT ROBBING HOOK THE CHEATER IS ALREADY DOING...OF COURSE !

2 or 3 months ago, HE already said HE is going to increase the imports taxes on many goods ! Still waiting the details.
In the meantime he puts a queue at the imports customs...to delay the entry of goods !

More to be revealed shortly...probably !

smilies/cheesy.gif smilies/grin.gif smilies/cheesy.gif smilies/grin.gif smilies/cheesy.gif smilies/grin.gif smilies/cheesy.gif smilies/grin.gif
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Ch.C
written by João da Silva, February 02, 2009
Joao......Ohhhh yesssss...I am still alive and well, full of life !


How and where did you spend your vacation? Ho Chi Minh City ? smilies/cheesy.gif
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Noooooo !
written by ch.c., February 02, 2009
I went to the USA.
California and Florida.
To see, smell the real estate odor.
Was there 75 % for "see and smell", 25 % for "tits touching" smilies/wink.gif

With partners, we are going to launch a new residential real estate fund.
A small one with US$ 15 million, times leverage...of course.
We got a lending offer at very low rate.

What gave us this stupid idea ?
Simple :
A few months ago, we read in an article that a group (not named) bought many fully built prime residential condos in Miami, in one building, at 50 % the asking price, because the developers were...CLOSE TO BANKRUPTCY..and still had many unsold condos !

Therefore...WHY NOT.....if we find other depressed developers ? And there are truckloads of them !
It is just a question of PRICE....after all !
The ones with Cash and available lending....dictate the prices...for the time being !

Will see ! Just went there to let a few of them know...we are interested....depending of the dealing price, not their asking price !

smilies/cheesy.gif smilies/grin.gif smilies/cheesy.gif smilies/grin.gif smilies/cheesy.gif smilies/grin.gif

Let me give you a good old but true story :
In the previous U.S. real estate meltdown in the early 1990s, that involved hundreds of Savings & Loans Banks going bust and taken over by the Resolution Trust Company, there was a black sheep in the name of Sun Trust or Centrust (I dont recall) in Miami.
Their HQ was really a prime and beautiful recent building.
After they went under, the building which was originally built for US$ 700 millions, was sold for US$ 200 millions.
Better yet, the buyers did put only US$ 30 millions as down payment, the balance being of course with mortgages.

Just imagine how much money these buyers made, regardless if they sold 5 or 10 years later or even if they remain the owners today !

smilies/shocked.gif smilies/shocked.gif smilies/shocked.gif
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Ch.C
written by João da Silva, February 02, 2009
I went to the USA.
California and Florida.


I knew you were up to something smilies/cheesy.gif . Keep us informed of the progress of this new venture.

Let me give you a good old but true story :


The story was interesting and I have a strong feeling that in some cities in Brazil it is going to repeat.

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Joao
written by ch.c., February 03, 2009
Then let me repeat the question I asked around 2 weeks ago for which I did not see your answer :

How are the mortgages rates fixed in Brazil ?
Similar to Spain.....once a year, or like in the USA or Europe for several years such as 3-5-10-15-30 years depending of the borrower decision subject to the lenders approval ?

As to my non expert feelings on Brazilian Real Estate
- if rates are reset once a year....problems can be better contained than if rates are fixed for longer periods.

But you see in Spain, despite they reset the rate once a year on 90 % of their mortgages...they still have a real estate meltdown.
Somewhat funny that their Official stats show a national price decline of 3 % for 2008, while in reality it is more like 15 % or so.
And it is not with a 3 % decline that thousands of their developers went or are going BANKRUPT !
Interesting also to know that in the EU, from 2003 to 2007, half of the WHOLE EU economic growth rate came uniquely from the construction boom (including infrastructure)....IN SPAIN ALONE !
Since there also was a construction boom in the other EU nations, it means that nearly ALL the EU economic growth rate came from CONSTRUCTION including infrastructure !
What most people also forgot is how this boom was financed.
Simple : in 2003-2004 when rates were still very low, EU governments such as UK, France, Spain issued 50 years governmenrt bonds paying 3-3,5 % interests. And the size of their borrowings were not in the 3-5-10 billion Euros or BP !
Nooooooo....they were 50 billion Euros or BP borrowings for 50 years at a FIXED LOW rates...per bond issue !
And guess who were the largest buyers of these bonds, due to political and governments "fanfare pressure" ?
THEIR GOVERNMENTS/STATES/CITIES/LARGE COMPANIES....PENSIONS FUNDS...OF COURSE!!!

I understand that pensions funds must be the suppliers of cheap money for the construction of the national infrastructure.
That is even healthy and beneficial to everyone.
But not stucked and fixed rates for 50 years....when interests rates are very low !

Because of course these Mega-Jumbos borrowings were then further leveraged using the PPP (Public-Private-Partnerships) model...obviously !!!!!

smilies/wink.gif smilies/cheesy.gif smilies/grin.gif smilies/shocked.gif
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Ch.C
written by João da Silva, February 03, 2009
Then let me repeat the question I asked around 2 weeks ago for which I did not see your answer :


Herr.Ch.c, I take serious questions seriously and give answers to best of my knowledge! I had given you the answer in the following link which of course you didn't get to see, because you were in CA & FL!!:

http://www.brazzilmag.com/content/view/10525/1/

That was on Jan 23rd. However, to make it easier for all of us, I am reproducing what I wrote:

I think this question was addressed to me. As I said a few months ago, the best bank to get a Mortgage is CEF (Caixa Econômica Federal). At that time you could get two kinds of Mortgage. One with Prefixed annual interest rate and the Second one is Post Fixed. In the first case the, if you borrow at the annual rate of say 14% , it remains the same during the mortgage period. In the second case, you borrow at 14% and after a year the rate changes (according to the inflation rate determined by the government). It may come down or go up (though I have never heard of it coming down!).

I really do not know if the mortgage rate is going to come down even if the SELIC rate goes below 10%. There is an article that I am posting below that says that the by cutting down SELIC rate by 1%, the consumer credit has gone down just by 0.08%. It is an interesting article and will help you in your analysis.

http://www.estadao.com.br/noti...1783,0.htm

I look forward to hearing your opinion.


The recent news is that the CEF has been asked to give preference to those whose family income is less than R$2000 per month.

btw, you must be aware that to get financing from CEF, one has to be a Brazilian citizen or a Permanent resident of the country.
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Ch.C
written by João da Silva, February 03, 2009
Posting the url mentioned above so that you may have a quick access by clicking on it.

http://www.estadao.com.br/noti...1783,0.htm
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Import restrictions
written by sk, February 03, 2009
As with past restrictions, this will mean higher costs for consumers. Brazilians already pay more than other people for many items, such as imported cars (many of which, unlike Brazilian-made cars, have sufficient safety equipment), due to tariffs and taxes. Brazil has protected many industries over the years, including computers, and consumers have suffered.
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Joao and sk
written by ch.c., February 03, 2009
Joao
1) Dont worry......I/we are never ever ever going to borrow in Brl anyway. Therefore in the case we have an interest to buy Brazilian real estate, we will pay 100 % C ASH......and make a borrowing in another currency. Just as we did for our BBC farm.
2) On your mortgages rates....I simply dont understand what you explained...the way you explained ! sorry with smiles !
3) I knew your Selic rates went down. It was just before my trip.

sk
- you are mostly right ! The Brazilian problem is that the same car model with the same options, even if built in Brazil, is usually more expensive then the price in Europe.
- also true for your imported goods ! Believe it or not but the Iphone and Ipod are the World Most Expensive in...BRAZIL !
Comparative stats made by an Australian Bank. In US$ while your currency was still higher than today, your Iphone and Ipod retail
prices were 60-80 % than the Swiss, European or U.S.prices.
Somewhat curious because they are mostly made anyway in.... CHINA! Meaning the purchase costs are basically the same. The price difference being obivously THE TAXES !

Even more funny that then BRAZIL IS FULL OF TEARS AND CRITICS, when the USA charges ONLY 54 cents a gallon of taxes for foreign ethanol. Especially knowing that this tax is only AFTER THE FIRST TEN PERCENT OF WHAT THE USA PRODUCES.
Meaning the first 10 % of the U.S. production is imported...TOTALLY TAX FREE !!!!

Hopefully some people understood the messages from OBAMA (not yet a law) :
- All newer cars with better fuel efficiency will have to be built...IN THE USA
- AND during his election campaign he also said....buying a cheap T-shirt overseas is good only if it doesnt penalize the U.S. jobs.

Because especially on cars and also trucks, Brazil has ZERO Brazilian manufacturer anyway ! Thus why should Ford and GM produce cars in Brazil...to be exported in the USA !
I just remind you that years ago even the Japanese automakers were forced to build plants...in the USA !

These things will be on the "why not" table again...in the next 1-2 years....no doubt in my view !

and also strange that emerging nations EXPECT NOT MORE PROTECTIONISM FROM DEVELOPED NATIONS....why at the same time they are FAR MORE RESTRICTIVE IN THEIR IMPORTS !

Simple example, not involving Brazil but India and Thailand :
BOTH HAVE IMPORT TAXES OF AROUND 300-500 % ON FOREIGN ALCOHOLS, mostly charging the highest rates on developed nations alcoholic beverages, AND MUCH LESS (but still high) when imported from other emerging nations.

And then like hypocrits, they say how unfair developed nations are !

Something similar will happen with China :
Both the USA & EUROPE have well over US$ 200 billion trade deficit EACH !
While China overall trade surplus is lower than that.
Meaning China has a HUGE trade deficit with most basic commodities exporting nations.
Trade deficit further increased by the emerging nations HIGH IMPORTS TAXES AND QUOTAS RESTRICTIONS EVEN ON.... CHINA GOODS !

Conclusion : there is going to be a fundamental change in World Trade. The WTO is for more OVERALL TRADE...NOT.....ONE WAY TRADE....AS SO MANY EMERGING NATIONS TRY TO IMPOSE TO DEVELOPED NATIONS !
If you pay attention closely, every decade there is NEW WORLD BASIC THEME !
in the 2000 decade it was/still is....globalization favoring outsourcing production to emerging nations and creating huge TRADE SURLUSES FOR THEM...EVEN IN MANUFACTURED GOODS...USING DEVELOPED NATIONS MONEY, FINANCING, TECHNOLOGIES AND KNOW HOW...WHICH COULD THEN BE RE-EXPORTED TO DEVELOPED NATIONS !!!!!!

GAME OVER ! Outsourcing production for local consumption or exports to other emerging nations....why not ! But no longer AS MUCH for re-export to developed nations....FOR SURE.... !

What does that means ? Emerging nations will have to fight/negotiate more with their REAL competitors....the other emerging nations.
FORD OR GM CHINA ARE CERTAINLY MORE COMPETITIVE THAN FORD & GM BRAZIL !!!!
Your imports taxes against each others dont interests the developed nations. WE WANT MORE ACCESS TO YOUR COUNTRIES...OR YOU WILL GET LESS INVESTMENTS & TECHNOLOGIES FROM US !

MORE SIMPLE THERE IS NOT, WETHER YOU LIKE IT OR NOT !
WE HAVE THE MONEY, THE FINANCINGS, THE TECHNOLOGY, THE KNOW HOW.
YOU DONT !
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oops typing mistake....on -Brfazilian Iphone & Ipods
written by ch.c., February 03, 2009
In US$ while your currency was still higher than today, your Iphone and Ipod retail
prices were 60-80 % MORE EXPENSIVE than the Swiss, European, Japanese or U.S.prices.


and....and...and....on the cars, consumers goods...look on top at your EXTRAVAGANT BORROWING INTERESTS RATES...which make the purchase costs even more expensive than they already are...even if goods sre manufactured or not in Brazil !!!!!!
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Ch.C
written by João da Silva, February 03, 2009
1) Dont worry......I/we are never ever ever going to borrow in Brl anyway. Therefore in the case we have an interest to buy Brazilian real estate, we will pay 100 % C ASH......and make a borrowing in another currency. Just as we did for our BBC farm.


I am not worried and nor should you be. smilies/wink.gif I would do exactly like you are planning to do. Nothing like driving down the price by having hard cash or financing it borrowing from elsewhere. I have done it a few years ago!! Dnb and Bo have done it also.

2) On your mortgages rates....I simply dont understand what you explained...the way you explained ! sorry with smiles !


Sorry that you did not understand. Probably because of the slight language problem ( smilies/cool.gif)!. Though I am yet to find my degree in a Detergent pack ( smilies/wink.gif), let me try to explain again mathematically.

Option 1. Prefixed Annual Interest rate of 14%: It is converted into monthly rate of (14 )** 1/12 which works out to be approximately 1.256% per month. So the mortgage of X Reais over a period of 300 months is to be paid in equal monthly installments. You may use the appropriate formula (which I know) or (a HP calculator, though I use a T.I which was a gift from my wife almost 22 years ago and still works well!) to calculate the monthly payment for X Reais you borrowed from the bank.

Option 2. Post Fixed Mortgage rate: You borrow at the rate of 1.265% per month for the first 12 months. Then the government slaps 6% inflation rate (for the previous 12 months) and now the annual rate becomes 20% (14 6). Using the same formula, cited before the monthly percentage is (20)** 1/12 which works out to be 1.283%. This percentage is applied to increase your previous monthly payment. ie. if you were paying 1000 Reais per month during the previous 12 months, during the next 12 months, you are going to pay R$1012.83 per month.

P.S: I used old computer programming symbols to denote maths formulas! * = Multiply ; ** =Raise to N th power. smilies/wink.gif I am sure you understood. smilies/wink.gif

As for your comments to SK, nothing new in it. So no comments from my side. smilies/tongue.gif
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Brazzil Magazine - Since 1989 trying to understand Brazil
  • Poor Women from Northeast Brazil Learn Joy of Meeting and Helping Each Other


    Joined hands 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.

  • Ahmadinejad's Visit: Iran, Honduras and Brazil's Hypocrisy in Dealing With Them


    Ahmadinejad and Lula 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.

  • Lula Is About to Fulfill His Wish of Getting His Good Friend Chavez in Mercosur


    Lula and Chavez 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.

  • Denying Education is the Other AIDS. And Brazil Is Guilty of Inflicting It


    Children from a Diadema band 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.

  • Child Labor Went Down in Brazil, But 5 Million Underage Workers Are Still Way Too Many


    Child labor in Brazil 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.

  • Some Humility Would Do Lula Good. On Human Rights Brazil Has Long Way to Go


    A prison in Rio de Janeiro, Brazil 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.

  • Brazil's Amazon Rainforest Policy Is a One-Way Road to Disaster


    Trasamazonian road in BrazilDepletion 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, Brazil's Miniskirt Student, Should Try US College Next Year


    Geisy Arruda from BrazilGeisy 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.

  • Vigilante Groups in Brazil Trump Drug Gangs and Become Rio's New Authority


    Brazilian favela in Rio 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).

  • Brazil Police Use Press Coverage as Green Light to Kill and Invade Houses in Rio


    Rio police in a favela 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.