Peruvian miners begin nation wide strike June 30---- Petrobas to set Orinco Policy---- Brazil and Venezuela hold fourth bilateral meeting

Apologies work and assignments have kept me busy today. Little time or brain power to give you my analysis today of articles I think relevant to discuss. I will however include some pieces which grabbed my attention from the news I read through today.

Peru Mine Workers Begin National Strike for More Pay (Update2) -- Bloomberg LP

By Alex Emery

June 30 (Bloomberg) -- Peruvian mine workers began their third national strike for better pay and benefits in less than 14 months, adding to protests from Mexico to Chile that have disrupted copper supplies and sent prices to records this year.

Miners walked off the job at more than a dozen sites to pressure Congress to pass laws to increase their share of profit and improve pensions, said Luis Castillo, general secretary of the Mining Federation. The group represents about 28,000 mine workers and 70 unions.

``The strike is on across the country and will take several days to solve,'' Castillo said today in an interview from Lima. ``Talks with the congressional committee should get under way tomorrow.''

Strikes have cut copper output in Peru, Chile and Mexico, helping fuel a 28 percent rally in the price of the metal this year. Copper has climbed fivefold in the past five years as rising demand outpaced production, eroding global stockpiles. Peru is the world's largest silver producer and the third-biggest source of copper, zinc and tin.

Also joining the strike were unions representing workers at mines run by Barrick Gold Corp., Southern Copper Corp., Renco Group Inc.'s Doe Run Peru unit, Shougang Corp.'s Hierroperu iron unit, Cia. de Minas Buenaventura SA, Cia. Minera Antamina and Volcan Cia. Minera SA, the Mining Federation said.

``The strike has had a visible impact at the mine,'' Shougang Deputy Manager Raul Vera said in a telephone interview. ``But the strike isn't 100 percent, as some employees have gone to work.''

Legislation

Southern Copper's Ilo smelter and Cuajone mine are operating with subcontracted workers and have not had any ``significant'' output losses, Southern Copper spokesman Alberto Giles said in an e-mail. Toquepala mine workers didn't join the strike, he said.

Doe Run Peru's La Oroya zinc and lead smelter is operating normally, spokesman Victor Belaunde said in by telephone. Employees at Barrick's Alto Chicama and Pierina gold mines also turned up to work ``as normal,'' spokesman Vincent Borg said in a telephone interview.

Antamina spokesman Jose Salazar declined to comment.

Congress will vote this week on a law that seeks to eliminate a ceiling on workers' share of profit, Peru's Labor Minister Mario Pasco said. Workers' bonuses based on profit currently can't exceed 18 times their monthly salary.

``There's no reason for this strike,'' Pasco told reporters in Lima today. ``In a week, more or less, this law will pass.''

Futures

Copper futures for September delivery rose 0.45 cent, or 0.1 percent, to $3.8825 a pound on the Comex division of the New York Mercantile Exchange.

Gold futures for August delivery fell $3, or 0.3 percent, to $928.30 an ounce, while zinc rose $2, or 0.1 percent, to $1,932 a metric ton on the London Metal Exchange.

Peru's Mining Federation held five-day national strikes in November and May of last year. In Chile, contract workers on May 5 called off an almost three-week strike that cost Codelco, the world's biggest producer, an estimated $400 million in lost output and damages.

Mexico's largest mining union is scheduled to vote today on whether to strike to protest the labor secretary's refusal to recognize the re-election of Napoleon Gomez Urrutia as the group's general secretary.

A strike has shut down Grupo Mexico's Cananea copper mine in Mexico since July 30. Grupo Mexico is seeking to buy the workers out and reopen the mine in 2009.

Government Solution

Congress, not the companies, will have to act to solve the dispute in Peru, Buenaventura Chief Financial Officer Carlos Galvez said.

``This is a political issue that has made the federation more visible,'' Galvez said in a telephone interview. ``It's likely there will be more mining operations on strike this time than last year.''

Peruvian lawmakers have been debating legislation since 2006 that would boost profit-sharing and pensions for miners. Peruvian President Alan Garcia last week enacted a law granting more rights to employees of contractors.

To contact the reporter on the story: Alex Emery in Lima at aemery1@bloomberg.net.

Last Updated: June 30, 2008 17:23 EDT

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Petrobras to set Orinoco policy in September - Brazil, Venezuela

Click here to view full article -- BNAmericas

Brazil's federal energy company Petrobras (NYSE: PBR) will define its role in Venezuela's Orinoco heavy crude belt at the September meeting between the two countries, Venezuela's state oil company PDVSA said in a statement.

Brazil's President Luiz Inacio Lula da Silva met his Venezuelan counterpart Hugo Chávez in June in Caracas for the fourth bilateral meeting.

Lula said that both PDVSA and Petrobras would take their time to cement any joint participation.

"These are both large and very powerful oil companies that are currently establishing common denominators that will guarantee a strong participation between the two companies," Lula said.

"The more oil we find, the more powerful we will become," he said in the statement.

ING Launches Latin American Equity fund for Indian Investors -- Opened on June 19th and will remain open for potential buyers for about 1 month

China-Peru begin 4th Round of Negotiations for a Free Trade Agreement

China - Peru, 4th Round of Negotiations for a Free Trade Agreement between China and Peru began yesterday, June 28th in Lima, Peru according to Andina, a leading Peruvian news agency.

Topics on the agenda in this round include:

- Access to the Market,
- Rules of Origin,
- Trade Defense,
- Services,
- Investments,
- Sanitary and Fitosanitary Measures;
- Technical Obstacle to Trade,
- Solutions of Controversies,
- Customs Procedures
- Institutional Affairs.

Updates and developments to come. It seems both China and Peru are eager to sign this agreement. It would make it China's second in South America, Chile having already sealed a FTA with China back in 2005. (Click here to read the article published by the China-Daily, back in 2005)

Peru and Chile are attractive countries for China because of a variety of reasons. First, Peru and Chile are the world's leading copper producers. In 2004, the two nations, together mined nearly 6.4 million tonnes of copper; equal to 44% of global copper production. Together, the two countries accounted for 50% of China's total copper imports from abroad (International Copper - World Copper Study Group; 2007). Chinese copper demand is unlikely to shrink any time soon, granted the fact copper is used in the production of semi-conductors, automobiles, infrastructure, IT hardware, and in the construction industry (Trinh; 2006).

Second, macroeconomic and political stability and impressive growth makes Peru and Chile ideal entrance gates for Chinese investments, exports and imports to and from Latin America. Chinese ambassador to Peru, Gao Zhengyue, stated this year at a conference on pacific cooperation hosted in Lima; “one of the advantages that Peru (and Chile) offers to China as economic partners is its strategic economic convergence of complimentary economic structures. Derived from its geographical position in the continent, as a bridge between Asia and South America and the Atlantic Ocean through the bio-oceanic corridor. Peru is also important due to its projection towards a sub regional extended market through the Andean Community (CAN) and Mercosur. (China-Peru Free Trade Agreement Joint Feasibility Study; 2005-06).”

It would be nice is China and Peru could get this deal sealed and further increase trade with one another. It will be to the benefit of both countries. Reported on Chinese Governments homepage of the Ministry of Commerce, Vice Minister of Commerce Yi Xiaozhun stated:

"Peru is now China’s important trade and investment partner in Latin America. The China-Peru bilateral trade surged by 49.59% year on year to US$6.014 billion, out of which China’s export hit US$1.678 billion, up by 66.43%, and China’s import hit US$4.336 billion, up by 49.03%. The cooperation on mutual investment, contract projects and labor cooperation, etc., between the two countries also enjoys relatively quick development."

Many would agree other countries are equally or of greater significance to China... Such as the closest competitor to Peruvian copper--Chile. Perhaps Brazil, which China has become increasingly dependent upon for foodstuffs and is has also heavily invested in infrastructure, iron ore and energy projects throughout Brazil.

No less, Chinese rhetoric however exaggerated, does offer some evidence to suggest the agreement will pass and be speedily implemented. China can be very respectful, gracious and giving when they want something to move ahead. Whether Peru is truly emerging as China's most "important" partner in Latin America is questionable, but China's and the Peruvian governments efforts to move this foward, show both parties feelthe FTA would be beneficial.

ProInversion board to okay Pisco-Lurin pipline contract -- investment opportunities in Peru!

BNAmerica's reports ProInversion, Peru's state agency for promoting private investment is due to release purchasable contracts to private investors willing to buy them.

Grana y Montero, a local Peruvian company and Oiltanking, a German firm will construct a 300km from the province of Pisco to a dispatch plant in Lurin, which is within the district of Lima. Construction of the pipeline will take approximately 30 months once all financing is approved.



I learned today through researching this particular "investment," ProInversion allows private investors to invest in numerous infrastructure and state projects of the Peruvian state. Although the English site is a little vague on how the investment works, it is interesting to see such a site exists and that the Peruvian state has managed to package the debt of such products into purchasable and tradable forms.

Investors, seeking a alternative avenue to diversify their investment should consider such investments. ETF's and mutual funds, or even direct purchase of equity is risky considering the current state of the global economy and the world's financial markets.

I am sure many situations from the past can be pointed out by others who are aware of them of times when Latin American government have issues similar "bonds" or purchasable equity to finance their own projects... only to never pay their investors back. People have good reason to be worried, but ask yourself... in today's market, what investment comes with "no worries?"

Video -- Investing in Peru

Flooding continues in Southern China as new tropical storm hits South China

Local residents are trapped in floods in Heyuan city, south China's Guangdong province, June 27, 2008. (Xinhua Photo)


Armed police transfer trapped residents in Heyuan city, south China's Guangdong province, June 27, 2008. Affected by Typhoon Fengshen, heavy rainfall hit Heyuan on Thursday and Friday, flooding some roads and houses. Over 2,000 local residents have been transferred to safe places by the armed police.(Xinhua Photo)


Reuters Video Footage - China Flooded by tropical storm

The Shanghai Stock Exchange unveil's new rules intended to prevent investor fraud and manipulation of securities

New rules unveiled by the Shanghai Stock Exchange summarized below... Or view the full story on Xinhua's website, accessible here.

Proceeds from initial public offerings (IPO), private placements and bond sales should be put in an account opened by the board of directors, the rules said.

Listed firms should notify underwriters if they want to cash in more than 50 million yuan (7.3 million U.S. dollars), or at least 20 percent of the proceeds, from an account, the bourse said.

The proceeds should not be used to buy tradable financial assets or lent to others. It is also banned from being invested in stock funds or in companies mainly engaging in buying and selling securities.

China and South America in focus: China considers boycott of Australian BHP Billiton... could help Brazil's Vale

The Chinese are considering a boycott of BHP Billiton (BHP), the world's largest miner, according to a report by London-based investment bank Fairfax (article from BNAmericas).

Rio Tinto and China's Baosteel, recently announced a joint venture deal, which China now argues exports iron ore, (one of Brazil's major exports to China) at a fair market price while Australia's BHP Billiton does not...

Interesting being that it cost $45/t more to ship Iron Ore from Brazil to China than it does from Australia to China. Despite the distance, the recent 100% increase imposed by the company (BHP) on Australian iron ore, makes iron ore from the Australian mining giant with more expensive ore than China can obtain 1000's of miles away from its Brazilian counterpart.

Dangerous move for BHP, but in the end it might work out considering that BHP and RIO combined export about 80% of the world's iron ore, even if RIO can hold out for a while and BHP feels the pain from the Chinese boycott, the global macro economic conditions of the commodity market, combined with the market share BHP currently retains may force RIO to raise its prices as well.

Pedro Galdi, an analyst at SLW Corretora brokerage firm in Brazil, stated the following:

"In reality, Vale- Rio Tinto (RIO) and BHP account for 80% of global [iron ore] mining needs. Demand is higher than supply and it's hard to imagine one of these players leaving this market, or selling iron ore at spot prices, which could be bad for everyone," said Pedro Galdi.

"I do believe this is going to become a duel of giants but it's still too early to say that BHP is going to be selling at spot prices during this year, especially with its acquisition attempt of Rio Tinto. We have to wait until June 30 to see what is going to happen," Galdi said.

Once again, if you would like to read the full article please visit BNAmericas or click here for a direct link to the publication.

China's Muslim Uighur minority, call for Olympic boycott... not just Tibet

Xinhua Finance - XFML - Stock Update -- CEO and Independent Directors Purchase Company Shares

I'll admit... I jumped on the "bandwagon" of Chinese IPO's in early 2007, through the form of Xinhua Finance (XFML). I analyzed the stock as I did most my other Chinese picks at the time. With little history on the company, horrendous management (at the time), little clue on how to deal with press and transparency. What So as a result...

(If you missed my first post on XFML, click here to check it out.)

I made the investment with a simple macro-economic analysis of the Chinese market, believing the stock's debut on the NASDAQ at around 11-12/share as a fair price. After a year of turmoil both within the company, in Asian markets, and with global markets around the world in general the stock has sat and done little except inch it's way down to the current price of $2.66/share. The "good times" in 2006 had gotten to me as they had many people playing Asia.

Good news is on the horizon... just in time for the Olympics which scares me a bit, especially considering I'm sure XFML, which has a decent amount of debt, is hoping the Olympics boost their "brand," and that the advertising projects it has been hired to do for the games actually bring in some solid revenue... which would also help their share price.

Raising money in the current market would be hard. XFML suffered some bad publicity earlier in this year, do your own research if you want details since much of it in my opinion was based off unfounded facts, over-exaggerated and politically motivated.

They hired new PR, reshuffled their board and management, have revamped their main financial news page: http://www.xinhuafinance.com/en/, acquired some nice companies for decent prices this year, saw revenues rise in all their current operations (including print media), got some nice projects for the Olympic games, and are about to expand into sports media-- a largely untapped market in China.

Now to top it all off, this morning in my mail box I was sent a pleasant news break on the company, informing me Freddy Bush, the CEO and Independent Directors Purchased Company Shares due to their feeling of the company "being undervalued." Generally good news.

Not saying go out and buy, this website represents my opinions, commentary and analysis alone and not the actual course of events that will play out. Please invest with caution.

For full article regarding the purchase made by the CEO and other directors click here for Yahoo Finance's link to it. I'll copy the companies performance once again of XFML since it's debut last year.

Hilarious headline flashed earlier on Bloomberg Live TV "breaking news"...

"Texas real estate slump lets Mexicans take it back."

Thought I would share that, lol. Goodstuff Mexico!

US-listed Chinese Stocks in Focus -- Xinhua Finance Consumer Confidence Index Inches up

Beginning in September of 2007, I started to get accustomed to reading reports of slumping consumer confidence in China. Every month, Xinhua Media, one of China's premier financial information and media service provider emails me a copy of their benchmark consumer confidence index they started in April 2007. This month (June), consumer confidence inched up for the second time since September of 2007, the other gain being the month of March-- which can partially be attributed to recovery efforts after a week long freezing snow storm which crippled southern China in late winter.

In this case too, investors should remain cautious, as the analysis released along with the new figures in indicate, confidence rose in certain areas of China and dropped in others. Among China's major cities, consumer confidence rose in Beijing and Ghuangzhou while it fell in Shanghai. Overall, below is long-term picture of the Xinhua Finance eziData China Consumer Index.

Xinhua Finance is one of China's domestic premier financial information and media service provider. Listed on Tokyo's Mothers Board (9399), Xinhua Finance is headquartered in Shanghai, with a global network spanning 12 countries worldwide.

Beijing's gain can be attributed in large, due to the upcoming Olympic games in August. Overall gains in the index, as described in the report can be attributed to two major factors;

"continuously easing general price rises due to the central government appreciating the RMB (yuan) and acting correctly to stem inflationary pressures. Second, encouraged patriotism among average Chinese from the Wen Chuan earthquake rescue efforts, which in a very abstract sense thereafter encouraged consumers to remain more enduring when facing difficulties."

Now the investor at this point should ask him/her self... Is it time to get into China? Big names like Jimmy Rogers say yes, but realize they know the market beyond just the scope of China. Rogers knows and analyzes much of his China picks within the larger context of Asia and more particularly, the global commodity market.

Jimmy Rogers for instance has recently focused on Taiwan's market, and made comments on Japanese stocks being relatively "under-valued." This does not mean it's time to pour your assets into stocks from the mainland, although major financial media that blizt's viewers with anything he says have interpreted it as such.

For the long term investor out there... It is difficult with a lack of transparency and speculative investment in many Chinese ADR's, to really value most stocks accurately. No less, here are some equities on my China watch list, two of which I currently own.

Note I do not own all these stocks, I'll admit to buying shares of XFML and CHCG.OB recently, and that I used to own CAGC.OB, but, I no less still follow these stocks and feel these five in particular have become more attractive in light of recent pull backs, leaving XFML, CHCG and CAGC under-valued by the market.

GRO and CHNR less so, and I know less about the two companies leaving me apprehensive about investing in either. I also question the true profitability of CHNR, which I feel has a great deal of hidden debt will find the Iron, Zinc and Copper mines in operation and their exploration projects within China will not yield as much raw material as the company has projects.


1) Xinhua Finance - XFML, as described above is a leading provider of financial news in China. The company I receive the monthly consumer confidence report from, and which I am personally invested, is involved with more than just financial news. They provide advertising services to upscale Chinese firms, own the rights to certain TV stations in China, own newspapers (which are not suffering declining circulation as they are in the US and still used as the primary medium of obtaining news in the mainland), among other operations.


2) China 3c Group - CHCG.OB.




*** now for three commodity related plays, two in the agriculture sector and one in metals, which I am personally weary of despite all the hype surrounding it-- China Natural Resources Inc

3) China Agritech Inc - CAGC.OB


4) Agria Corporation Inc - GRO



5) China Natural Resources Inc - CHNR

Reuters -- "Era of Cheap Oil Over" -- IMF' chief Dominique Strauss-Kahn warns of looming threats from rising prices for LATAM

Using the great and free online personal finance management site "Mint," I have been able to monitor all my personal expenditures from my various bank accounts and credit cards.

Since the month of September, I've seen my expenditure on food increase roughly 20% and my gas expenditure has increased about 70%. Since August 2006, when I purchased the car, the cost of filling my tank has more than doubled.

If price rises are really hitting home in the United States, the cliche "world consumer," this pinch is definitely affecting the emerging world. IMF, chief Dominique Strauss-Kahn urged Latin American leaders on Monday "the rising threat of inflation in Latin America, urging policymakers to take steps to contain the shock to prices from energy and food."

He continues, explaining "The task for policymakers is to ensure that the initial impact of the supply shock on prices is contained and that macroeconomic policies successfully prevent higher inflation from becoming entrenched in expectations and wage demands"

“In the short term the challenge for Latin America is inflation. The region built credibility in the last decade and that credibility is now being tested”.

Strauss-Kahn's comments as the world as a whole attempts to fight inflation and ride the wave of problems resulting from the global credit crunch and sub-prime mortgage crisis in the US.

To view the full article from Mercopress in which I accessed Strauss's comments from click here

Reuters - Era of Cheap Oil Over

Venezuela's PDVSA and China's CNPC to cooperate in the production of 8 new oil rigs -- annually

I am intrigued, as usual, by the fact I am only able to find a few sources in English which have covered the recent development in Sino-Venezuelan cooperation. I suppose this is one of the main reasons I started this site-- to share developments in the works between China and South America, which go largely unnoticed in the West.

As described in a recent article published by BNAmericas, Venezuela's state oil company PDVSA (Petroleos de Venezuela S.A) and China's state oil company CNPC (China National Petroleum), have entered into a joint venture in which the two government owned oil conglomerates will work together in order to produce 8 new oil rigs by years end in Venezuela.

This adds to the two oil rigs delivered by CNPC in November 2007, and three more to come in 2009, bringing the total number of "made in China" oil rigs operating in Venezuela to 13. This will also allow Venezuela's PDVSA, for the first time in the country's history to construct their own oil rigs domestically... without North American or European assistance.

Don't get too excited... This it is not major sign of political or economic unity between the two nations. At least, not on the level Venezuelan state media is reporting it to be. Want proof?

Chinese media has virtually ignored this development, as they usually do with most things concerning Venezuela. China does not want to attract the attention of the US or Europe by dealing too closely with Chavez.

The most recent article published by China's state media, Xinhua, I can find on this subject (in either Chinese or English), is dated May 13, 2008.

Granted my reading ability in Chinese is far from perfect, however searching the words "petrol," and "Venezuela" can usually lead me in the right direction and allow me to find a story pertaining to the topic I am searching for. From what I am able to comprehend in this Chinese article from May, I personally do not feel it is directly related to the deal discussed on June 23, 2008 on BNAmerica's website.

Chavez would like to consider China a strategic ally, both on a political and economic level. As the world's second largest consumer of energy, the match seems to fit... Too bad for Chavez its quite costly to ship Venezuela's heavy, dirty crude oil all the way to China.

Second, Chavez has unrealistically already raised China's economic position and importance for his country right next to the spot the US still occupies. This is hardly feasible to imagine considering Venezuela and China's geographic locations.

Third, Venezuela's trade with China is inconsequential compared with Venezuela's trade with the US.

Fourth, when you compare China's trade with other Latin American nations, Venezuela's trade is insignificant when compared with China's current trade with other nations such as Brazil, Chile or Argentina.

Last, and perhaps Hugo's biggest mistake, is thinking China would be willing to extend it self to a country which is not only in the "back yard" of the US, but also a country which currently is not on good terms with US. Chinese culture, tradition and history have shown the Chinese have a tendency to avoid potential problems that could threaten "peace" or "stability," and a more significant relationship with with Venezuela would therefore be risky.

China has no interest in antagonizing the US, which remains China's major trading partner in the global economy. For now, China's outbound investments will be focused in projects such as the one discussed above. PDVSA will retain a 85% stake in the project, leaving 15% to CNPC. Total investment is projected to be roughly $430 million usd.

Quite small, when you consider for China's new sovereign wealth fund has about $300 billion usd sitting in reserve, waiting to be invested.

**Useful hint for readers **

It is easy to translate English words into Chinese characters without a pinyin input system using this great Chinese-English online dictionary / translator (dict.cn). After you find the characters for the key words you're looking for use "ctrl + f" or "apple key + f (for mac os)," to search for them in a article. Petrol = 汽油 (qi you) , Venezuela = 委内瑞拉 (wei nei rui la).

Rising food prices hit home -- Bolivia's poor, whom sit at "the heart of South America" -- go hungry as food prices continue to rise

Apologies if entries this weekend where a bit "lacking." I was traveling and simply had little access to computers.

Following up to this mornings post, in which I discussed in brief the tremendous untapped agricultural capacity of South America, emphasizing Brazil and Argentina, I present the other side of the story via this video from Reuters.



Bolivia, South America's poorest country used to feed over half a million people using UN donations. Those same donations, in the wake of rising fuel costs, can feed a mere 200,000 today, leaving many with empty stomachs as the video above describes.

The question remains... Yes, no one doubts the "richness" of Latin America, but how do you translate natural resources or un-tapped agriculture potential into sustainable development? Second, how do these countries keep their resources from being exploited by multi-nationals or corrupt and greedy locals?

Most Latino's learn in school and as they grow up their countries are richly endowed with resources, giving their countries the potential to emerge from poverty and develop their countries. Sadly, this has not been the case for any Latin American country, perhaps Chile being a unique example once again.

Chile did succeed to a certain degree in this, putting much of their copper wealth towards sustainable economic development goals. The Chilenean economy emerged significantly more competitive and efficient compared to its neighbors in South America.

Let us not forget the high-cost and much suffering on the parts of some people who lived through the Pinochet dictatorship and the reforms of the "Chicago boys."

Bolivia, itself, in the past 15-20 years has developed its own agricultural capacities in the low lands of the country. I learn new things about Bolivia everyday, society is quite fragmented between the mestizo population (and European descended), and the indigenous community. Despite social and racial problems, a countries people, endowed wit vast resources as Bolivia should not be going hungry.

Bolivia is a unique country in South America, the good man Erneste "Che" Guevara called it the "heart of the America's," and that it is. I hope to see the country with my own two eyes one day before I pass further judgment, but no less, regional methods or a more cohesive internal movement should be put in place to at least alleviate malnutrition and hunger in Latin America.

The continent is poor, but always prided itself as being a poor continent which at least "did not go hungry." This age old myth (yes... myth), is now also on the verge of disappearing as food prices around the world continue to rise.

Argentina's agricultural sector in focus -- ''There's a lot of capacity in Argentina, including a lot of capacity that hasn't been met,'' Pisacco said

''There's a lot of capacity in Argentina, including a lot of capacity that hasn't been met,'' Pisacco said. ``We believe we'll be able to help feed the rest of the world.''

A farmer in Argentina told a reporter for the Miami Herald, this weekend. Click here to read the full article.

No less, the current picture of the global economy remains quite gloomy, and leaders around the world will be desperate to keep their people from going hungry, including the countries of South America.

South America, in particular Argentina and Brazil, currently have found themselves as possible answers to world food shortages and sky rocketing prices.

Ironic as large portions of the population in these countries and South America as a whole live in poverty and struggle on a daily basis.

Central and South America as they have been centuries, are stuck within greater global economy with a image they have found hard to shed. Articulated very nicely in Michael Reid's book "the Forgotten Continent," mentioned in earlier posts, as follows:

"Latin America has often been condemned to failure. Neither poor enough to evoke Africa's moral crusade, nor as explosively booming as India and China, it has largely been overlooked by the West."

Click here to purchase the book

Eurocup 2008 - Spain emerges victorious after years of historical "under-achievement"

Spain advances to the semi-finals in Eurocup 2008, after years of "La Madre Patria'' (the mother country), entering international championships with world quality and internationally top ranked teams... yet always falling short of expectations.


Hopefully the Spanish economy can make such a come back, as my last post indicates, their position in Latin America has grown in the past years and their FDI is crucial-- especially to countries like Cuba and even Peru and Argentina which few can deny are dominated by Spanish banks, telecommunications and construction. Perhaps "dominated"is not the correct term, but rather, lets me describe it as Spain's growing market presence in Latin America is significant and growing.

Peruvians, despite many expressing their anger over Fujimori's government signing of what many consider monopolistic rights to Telefonica of Spain, realize Spain is an important partner in the international community.

Telefonica did come to control the majority of the Peru's telecom sector, and they do charge very high prices for their services in Peru, Spain no less is a important source of FDI, in addition to China, the US, and Europe as a whole.

Latin America continues to grow, and achieve healthy growth rates when compared to other countries and regions in the world economy. Spain knows Latin America is a region they strategically have a advantage over other countries due to the similarities in language, religion and if I might say...

The United States re-placing Spain as the "imperial power'' or ''empire.'' Today, as of 2008, I believe it is fair to say the failures of the neo-liberal reforms of the 90's in Latin America. Combined then with the fact the Bush administration in the US has largely ignored Latin America for the past 8 years, has greatly helped Spain's image in Latin America, along with China, India, Europe and other countries around the world.

Spain, however, is a unique partner in the fact, much like Britain, the countries of Latin America have inherited certain traits and characteristics from the ''mother country.'' Second, Spain recently grown quite wealthy in a short period of time, they are in a position more than ever to invest, initiate cooperation and work with Latin America towards helping each other-- in economic, political and cultural respects.

Miraflores,Lima. The trendy/modern district. Symbolic of Peru's recent economic growth.

Spanish banking giant Banco Santander 2008 profit suprasses 10 bil Euros, helped in large by their operations in Latin America

Santander 2008 Profit to Surpass 10 Billion Euros (Update2)

By Charles Penty

June 21 (Bloomberg) -- Banco Santander SA, Spain's biggest bank, forecast profit will surpass 10 billion euros ($15.6 billion) in 2008, a record, as growth in Brazil and elsewhere in Latin America offsets an economic slowdown in its home market.

``Banco Santander has shown its considerable strength in the face of the abrupt change in financial markets,'' Chairman Emilio Botin, 73, told shareholders today at the bank's annual meeting in Santander, Spain. Santander earned 9.06 billion euros in 2007, or 8.11 billion euros before extraordinary items.

Santander, which makes about 80 percent of its profit from retail banking, has sidestepped much of the collapse in the U.S. subprime mortgage market that so far has caused almost $400 billion in losses. Santander is doubling its presence in Brazil with the acquisition of ABN Amro Holding NV's bank and Botin said today he expects Latin American profit to increase 20 percent this year in dollar terms.

Santander has ``performed well in this environment and that's admirable,'' said Peter Braendle, a fund manager who helps manage about $60 billion at Swisscanto Asset Management AG in Zurich. ``But make no mistake -- they're facing many challenges.''

---> To access the full story from Bloomberg LP click here

** Apologies once again for the lacking analysis in the past two days of posting, i'm traveling at the moment and unable to spend much time at the computer. Will make up for in the days to come!

All eyes on Tibet - Beijing Olympics 2008 cont. coverage / updates

As Reuters reported, Lhasa, the capital of Tibet has been in "lock-down" since the protests began earlier this year. China reports they have been largely instigated by both the Dali Llama and Western Media.

The first video presented by Reuters updates readers on the journey of the Olympic torch, which has finally reached Llasa.





This second video, also provided by Reuters displays the tough stance China is taking in regards to Tibet and the upcoming Olympic games in August--asserting Tibet "will never change." Rather vague statement, very typical of the Chinese and the central government in Beijing.

Asian Financial Markets in Focus -- Mainland China, Thailand, Singapore finish in the green while the rest of Asia falls on increased petrol prices

Apologies but today I am updating this site using predominantly the news which grabbed my attention this evening, and which I would have ordinarily included in a typical analysis with. Sadly I was stuck in traffic the entire day moving around the North Eastern United States along with 1000's of other gas guzzling behemoths.

Asian Shares End Mixed -- China hikes fuel prices 18%, hoping to trim demand in the world's second largest consumer of oil. -- Reuters

India -- China's neighborer and fellow BRIC country India suffers wide scale flooding, adding to the list of natural disasters this year

Disaster looms in India as flooding worsens -- Reuters

Beijing 2008 - Olympic Games in Focus: Video updates on developments relating to the 2008 games

Apologies but today I am updating this site using predominantly the news which grabbed my attention this evening, and which I would have ordinarily included in a typical analysis with. Sadly I was stuck in traffic the entire day moving around the North Eastern United States along with 1000's of other gas guzzling behemoths.


1. Pollution worries continue to plague China's upcoming games -- Reuters




2. Beijing residents protest as urbanization plans of the central government force residents and shop keepers to move in preparation for further large scale construction projects -- Reuters




3. Beijing fights back- central government in the process of planting a "green wall" around Beijing -- Reuters

The growth of the Micro-Finance Industry in Peru: Mi Banco of Peru helps thousands overcome poverty

Microfinance, is a economic development tool which aims to reduce poverty and empower the global poor with the skills and means to generate sustainable development through, providing small "micro-loans" and other financial services to poor entrepreneurs whom otherwise lack the knowledge or means to acquire them from the formal sectors in their home countries.

In 2006, over 10,000 Micro-finance Institutions where in active operation within 85 countries; financing 150 million micro-entrepreneurs all over the world and offering an array of financial services otherwise inaccessible for poor people in the developing world.

(Note decided to re-publish, or in this case change the publication time of this post with editions / update from yesterday June 19 to today June 20.)

ACCION International, Established in 1961 and a leader in microfinance since 1973, ACCION has over 45 years of experience in the field of international economic development. Please visit the following pages to learn more about who we are, what we do, and how we do it.

In Peru, ACCION International is partnered with a local Peruvian bank called Mi Banco, which serves as ACCION's main avenue in which to access the Peruvian market on a wide scale, would ordinarily be impossible or very difficult to say the least due to the restrictions in place by formal Peruvian Institutions which at the moment impede many smaller MFI's from evolving into a official bank which can accept deposits and make loans.

I would like to especially extend my gratitude, to a dear professor of mine, whom I was fortunate enough to have on multiple occasions while attending American University, who was a true inspiration. A charismatic and energized teacher who drew upon his real world experience in business, international development and financial management/ investments in over 20 countries-- and a individual whom I truely respect a great deal: Dr. Ghiyath Nakshbendi. International Business Professor at American University Kogod School of Business, he single handedly created and organized the first course to be offered in the Washington D.C area focusing on Micro-Finance. To that I give him my most esteemed gratitude and respect for his forward thinking of mentoring students in what is a very fast growing and continuously more influential field of study and work.

The video below truely describes the power of Microfinance and micro-credit. Consider these ladies, who relied and used micro-credit through to survive... Having to cope with 3 currencies, 4 presidential elections, 1 dictator, hyper inflation, terrorism, violence, abusive husbands... and still prospered beyond what would have in any other shape or matter have been possible.

I use the word prosper loosely here, for they are will working hard, in a hard world and face adversity and challenges on a daily basis. No less it is a incredible example of the power of micro-credit and MFI's and the inspirational ability of such individuals to persevere through such difficult times.

Last, they are a success story so to speak, many examples persist which are sad case studies. Despite this all, progress through the use of Microfinance institutions is being made, especially in comparison to past methods of poverty alleviation.





Great Video below describing what is one of the first cities in the America's... Special thanks to Five Talents International, helping with international development around the world.



And to end this post -- a bit of mixing modern pop culture with helping the dis-empowered, historically ignored, people of the 3rd world.

The power and capabilities of Microfinance to help the global poor is truely unimaginable. I'll personally be investing assets of my own in the Microfinance / Bank / public traded traded company-- Compartamos.

Described here in Businessweek

Summed up in a nice poppish music video / footage from this youtube video

Chengdu, China -- Truely a beautiful city full of incredible people, 10 mil strong... video footage I took back in 2006 while visiting Chengdu

After a long amount time (well more than usual), spent thinking about what to concentrate this update on, I found this video on my Picassa (google video) web albums-- along with other long forgotten items...

I decided to orient this post video which is of a taxi ride down a major avenue in the Capital of Sichuan Province, Chengdu. This post is therefore dedicated towards helping the people of Sichuan province, who as I've reported in past posts have suffered a great deal in the past month and a half.

The province of Sichuan is known to be home to the Chinese frequently considered the most "relaxed and mellow," people of China. Traditional tea houses, some with a modern flare these days, are all around the capital of the province-- Chengdu. Sad it was the only part of the province I was able to visit.

I shot this video using a digital camera in December of 2006. My friend and i were on our way from our hotel to Chendu Daxue-- which translates into Chengdu University.

This video was taken as my friend I road in a taxi along a main road in Chengdu, a city in South-Western China of 10,000,000 people!--which despite being larger than New York City has remained largely off the world's radar for years... that is until a 8.0 earthquake struck, killing roughly 65,000 thousand people and causing countless other miseries.

Following the video are links to websites in which you can offer your support if you so choose to the victims of the earthquake in Sichuan province.




Support the Quake Relief @ -->

Mercy Corps and Tzu Chi Foundation via google's easy donation site are the ways I personally used.

World Vision I have read and personally be told is a good avenue to donate and have your $$$ reach the victims.

The Redcross and the UN have their own donation sites as well, google them if you'd like. I tend to avoid both, but who I am to judge... No further comment, hehe.

Road Blocks end in Peru - Southern Copper resumes operations -- see post on Inka Kola News

Was planning up posting my own update on the strikes that had been afflicting Southern Copper (PCU) operations, but Inka Kola News already got the job done. The strikes have ended... check out Inca Kola News for details and analysis.

I highly recommend people check out this great site which reports and keeps the average reader up to date on many news developments relating to Latin American stocks, politics and economics.

Inca Kola News can be accessed here: http://incakolanews.blogspot.com/

And the report / analysis covering the end of the the road blocks in Peru can be accessed directly through clicking on this link.

Also see update, accessible through this link.

China -- China embraces Spanish culture -- Will olympic broadcasts be able to go live?

Reuters Video's of the day - June 19th -- Region/topic: China


China Embraces Spanish Culture -- Reuters Video -- "Chinese say Ole! to all things Spanish!"






Beijing Olympics in focus -- will journalists and press be able to broadcast live? Chinese officials respond with their usual foggy answers... "beating around the bush so to speak." -- Reuters

Copper in focus: Southern Copper Peru (PCU) updates

Southern Copper Peru - listed on the NYSE, under the ticker PCU (google finance info)



Southern Copper Peru has recently has seen its shares fall across all exchanges in which this Mexican Conglomerate trades-- There are many reasons and factors at play, however at the moment a mix of both the fact copper has recently declined in international markets, but also because, a important area of Peru, where Southern Copper operates is experiencing union strikes and are protesters who have blocked Peru's main roads the area.

Argentina witnessed la Presidente-- la Senora Kichner deliver a speech this evening about her own countries protesters blocked roads. I may not love their populist rhetoric or economic policy, but Mrs. Kirchner said something that makes sense... (translated from her speech shown on CNN espanol), "a select group of society can not paralyze the road and the country as a whole, they have no right to disrupt all the people's in their own self-pursuit."

I admit I may be butchering the speech in the moment but, the fact remains... In Latin America, roads are blocked and then the economy stops. Without infrastructure, or the preventing of people from using the little infrastructure that does exist, Latin America remains in a "catch 22." In situations where it socially may make sense to implement reforms, governments are forced to make concessions due to necessity.

Photos below are pictures of PCU's operations in Peru and links to available financial info-- via Google.com/finance and yahoo finance --> Southern Copper Peru (PCU)


















I recall being in Tarapoto, Peru, in the Peruvian province of San Martin in 2002. Rice workers had paralyzed the region because US subsidies had made their rice more expensive than the also available imported rice from the US. The protesters took over the town square over and as temporary tourist I had to rush through the back roads in the amazon to the Airport, and hide out in a back office until a flight could take myself and my family of 12 back to Lima.

Click here to view a article in English I was able to find about the incident.

It is ironic food prices are now so high, Tarapoto's Rice industry is now growing rice and actually making a profit, although US subsidies still aren't help the overall market. The fact and main point I am attempting to get across is that all it took for protesters to paralyze the region was to blockade one highway--leaving the city isolated. and disrupting economic activity in the rest of the region due to the fact major roads pass through Tarapoto, the biggest city in the region.

I hope in a general sense things improve-- both on the part of the protesters in Peru, who do deserve new benefits as a result of high commodity prices, but also for Peru as a whole which in reality suffers a great deal, proportionately speaking when events such as this occur.

Emerging markets with complementary economies beginning to respond to developments and market movements from their fellow emerging markets

The recent mining strikes in Peru's Moquegua province, which in reality is not numerically that significant when you consider GLOBAL copper production, and Peru's total copper production from other regions has no less grown in influence to the point it can affect markets in various places. Examine the articles below, courtesy of many sources but cited here due to quality, reporting from my friends at Reuters. Oh... and Forbes for using Reuters report on their website headline 3...

Headline 1: Shanghai zinc up 1.8 pct, strikes lift copper! (Click here for full article)

Headline 2: India copper rises on supply concerns; zinc, lead rise (Click here for full article)

Headline 3: LME copper rises on Peru unrest, lead up 5 pct (click here for full article)

More in depth analysis to come tomorrow, but as it stands, it is increasingly interesting how interconnected emerging markets have become with one another.

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Side subject relating to post this morning about Bush's desire to life bans on offshore oil drilling.

And as usual, as I also stated in my earlier post, each side will simply dismiss one another. As I've said I don't know the politics behind each sides perspective to the extent necessary to make true judgments, but as I notice in Latin America when nothing but talk and argument happens I see happening here too in the US. Will continue to monitor and research subject for more in depth report to come.




And John Mc Cain jumping on the bandwagon... hehe =) and then Obama, countering. Oh... Politics.

US fastfood might have to warm up to the new kid on the block-- Bembos, Peru's growing fast food chain, and Peruvian "cuisine" goes International

Bembos is Peru's home grown fast food chain which for years has held it's head high in the wake of "yankee invasion" of US fast food giants, lush with capital and experience and initially gaining almost total market share of the fast food market in Peru.

I can personally attest... it is amazing and superior to US fast food unless your from the US and craving the particular style of Burger King's chicken nuggets, almost all the people from the US and Korea I have personally traveled to Peru with, have continuously told me, quite shockingly to me at first, thinking they would be inclined to dismiss Bembos, they all thought Bembos was better than their competitors, sometimes in food court like malls as in the United States-- especially in Lima.

I'd say the only problem, which is not unique to Bembos, but to all fast food in Peru is that is isn't truly fast food. For one its superior to the quality of US fast food, but what I really want to narrow in on is speed...

Considering I grew up in New York City I may be bias all together. Even here in DC, where I currently write to you from I think the people of Virginia, DC and Maryland are slow as snails. In all the "Latin" or known to be slow paced countries of the world I have visited: Peru, Mexico, Spain, France, and the Dominican Republic-- the three "latin" cultured and known to be slow paced countries I've visited, they fast food is generally just slow. Bembos is no different, but it lacks the model of US fast food, to lets just say actually make the food fast...

Bembos no less, is very nice "fast food" place, and quite tasty one to check out if you're ever in Peru.





















Playa Asia, very popular beach south of Lima .... and.. A Bembos in modern day Lima--

Moving on... Bembos is testing expansion in probably what many will read is a very unexpected choice... India! Five Bembos will be opening in Lima as the you tube video I posted in an earlier entry indicated, it was in Hindi, but due to the description on you tube being in English and the content in the video you could figure what it was about-- you don't Anderson Cooper, who CNN has sadly cast as their pretty face narrating much their reporting, to say the least... (no disrespect intended, I do recognize his abilty, but what they feed him is sometimes pathetic)

I must thank the Miami Herald for writing a story compiling many of these developments into one well written piece, accessible here.

Other Peruvian food chains are also spreading. Second, after Bembos, is Pardo's chicken, a staple in Lima for families of friends desiring delivery or "take out" chicken-- Peruvian styled roterseierre chicken. Pardo's recently opened it's first location in Manhattan, a tough market to say the least... I'm personally hoping for the best and will make a trip to it next time i'm in NYC to pay my respects. (Click here for the English version of Pardo's website.)

Third, there is China Wok, a Peruvian Chifa chain (see wiki definition), which is what Peruvians call their Chinese food. Peruvian Chinese food, like Chinese food in the United States has been altered by US tastes to a certain extent, Peruvian Chifa is therefore mixed with the rich and unique elements that come with being a Andean country with incredible biodiversity and unique flavors.

Peruvian cuisine in general, even in the more "upscale" trendy, socialite circles of major cities is gaining popularity, as the article describes from the Miami Herald describes. Peruvian food, excuse me, cuisine as I call it, is garnering world wide attention and respect... About time!

Viva El Peru! -- Various developments and stories from the Andean Republic

Since beginning this site, I aside from mentioning Peru within posts, most of my longer and more in depth analytical pieces have been on Argentina, Ecuador, China, commodities and rising food costs.

I would like to dedicate this update and perhaps the one to come later this afternoon (July 18- 2008) to recent developments in Peru, one of Latin America's best preforming economies in recent years and quickly gaining international recognition for both its economy and equally important-- Peru's unique culture.

I begin today's focus on Peru, with a chart I assembled for my dissertation on Sino-South American relations and economic cooperation, providing a general picture of how Peru's economic growth compares with its neighbors. My dissertation focused on the below countries and their growing relations and trade with China.

I must mention Ecuador and Uruguay each experienced their own respective healthy growth rates in 2006 and 2007. Information has been assembled from the International Monetary Fund (IMF), and account for inflation which is on the rise throughout the continent, but is particularly high in Venezuela and Argentina.

As you can observe above, comparing Peru with other countries in the region, it is preforming quite well and the IMF forecasts healthy growth for the country foward to 2009, at which point it has also been estimated Peru's economy will achieve fast. At the time of writing of my dissertation (Jan-April, 2008), estimates and future forecasts by the IMF were as follows. Please, by all means, let me know if the figures have been significantly altered since earlier this year.


Latin America - Country Growth Rates 2006-2009 (r = Real GDP percent change, e = expected and f = forecast)

Source: IMF GDP calculations adjusted for inflation

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Peru has many good things going for it right now. First, copper unarguably one of Peru's most important natural resources has risen sharply in value over the past few years, in addition to other raw material exports Peru has in abundance-- fishmeal, gold, silver and zinc. Copper is a key input in economic development-- and even if as of recent days the price has dropped, it will remain a commodity in strong demand for quite some time-- thanks in large to China which now relies on Chile and Peru for 50% of its total imports of copper from abroad.

Below is a graph which predicts copper demand and China's economic growth based off the proportional level of copper demanded from other countries at similar levels of development, using South Korea as the primary benchmark due to many similarities its own plan for initiating their economic development and similar needs of having to import many of the inputs necessary to industrialize.



Below is a graph generated from the London Metals Exchange home page, using their price graph generator.

LME copper spot 2002-2008

Thankfully, as Mr. Michael Reid states in his new book, the Forgotten Continent: The Battle for Latin America's Soul it seems Latin American countries are in a different position than they where during past commodity booms. Today, thanks in large to the BRIC countries and to emerging market demand, the current commodity boom will remain in swing for longer than ones of the past. Second, from historically failing to re-distribute profits from commodity booms to constructive areas of the economy to ensure sustainable growth after commodity prices fall many leaders now know better.



Peruvian present Alan Garcia, who had previously been considered a charismatic, populist, has shown he's learned from many of his past mistakes and currently retains pretty decent support and popularity rating in Peru.

In his first term as president in the late 1980's, his economic and internal policies lead to escalating violence from the war then in full swing, with the Peruvian state on one side, fighting the Maoist Shining Path Guerrillas on the other. Escalating violence and failed economic plans also lead the nation to experience the worst hyper-inflation of Peru's history.

Today he is viewed as a healthy moderate, leading the way with other popular Peruvian politicians such as Lima's mayor who also enjoys high popularity ratings as of recent polls, in investing profits from commodities in constructive projects. New water facilities are being built for Lima, which sits in the driest desert on the planet, highways are being built / repaired, ports are being upgraded and new airports are being built in Northern Peru (a region historically ignored in large by the central government).

I end this post (with more to come later), with a article I saved from March's APEC summit which took place in Lima.

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China sees Peru as the gate to South America - Andina News

Lima, Mar. 10 (ANDINA).- Macroeconomic and political stability and impressive growth makes Peru the ideal entrance gate for Chinese investments and trade to Latin America, said Chinese ambassador to Lima Gao Zhengyue.

One of the advantages that Peru offers to China as economic partners is its strategic economic convergence, derived from its geographical position in the continent, as a bridge between Asia and South America and the Atlantic Ocean through the bioceanic corridor.

Peru is also important due to its projection towards a sub regional extended market through the Andean Community (CAN) and Mercosur.

Chinese Ambassador to Peru
Gao Zhengyue

So far this year, around 30 delegations have visited Peru, and probably this number would increase when the Free Trade Agreement (FTA) between Peru and China is signed, he told Andina news agency.

Chinese business leaders are very interested in diversifying investments to Peru, currently concentrated in mining, in sectors such as ports, airports and road construction.

The Chinese government is interested in taking part in the social programs promoted by Peruvian government, as "Agua para Todos" (Water for Everybody) and "Techo Propio" (My Own Roof), he said.

"Whenever the Peruvian government can show projects to the Chinese business leaders, they will start to study them and decide to make investments", he said.

Gao Zhengyue told Andina that he is very satisfied with the firts two Rounds of Negotiations to sign a Free Trade Agreement (FTA) between Peru and China and hopes the FTA could be signed at the end of this year, so it would come into effect immediately.

The Chinese diplomat said his country is ready to welcome Peru's President Alan Garcia when he visits China next week.

(Accessed via Andina news agency -- China-Peru Free Trade Agreement Joint Feasibility Study; 2005-06).”