CSA has moved!

After over one year of ups and downs with Google's blogger, my loyalty to the tech giant is slowly fading as its service remains blocked in The People's Republic of China.

Adding insult to injury is this new limit on the number of tags / labels you can use when posting.

Please visit http://chinasouthamerica.com/home to access all the content you see here on ChinaSouthAmerica and for future updates.

Thank you,

Benito

FINAL MOVE -- GOTO---- chinasouthamerica.blogspot.com for future updates

Final decision has been made to operate this New and Analysis blog from its original URL. Please check for updates there.

http://chinasouthamerica.blogspot.com

A world without poverty -- ACCION & LendtoEndPoverty.org

Microfinance is a topic i've touched upon before on this site (See June 17, 2008 post). In this turbulent time, Microfinance borrowers believe it or not but are still paying back their loans despite the credit crisis.




Microfinance is an effective, long-term solution to ending poverty that empowers poor families with the financial resources they need to improve their lives.

But there is an urgent need to expand these services. Right now, microfinance is only reaching 10-20% of the estimated 500 million people who would benefit from these life-changing opportunities.

As you'll see in the two-minute video, microfinance has the power to improve the lives not just of individuals, but of families and entire communities around the world.

~ ACCION Video Link courtesy of Youtube

Special Report: Is the Grim Commodities Outlook Prices in? -- Bloomberg

Coverage from Sao Paulo, Brazil: Emerging Markets Dropped in Second Half, Morgan Stanley's Index Plunging 55% for the Year

China starts spring cleaning on the internet

Chinese authorities have shut down about 1500 pornographic websites and are making no secret about it, reporting about it in their own state press.

A total of 41 individuals where also apprehended during the crackdown after being linked to the vulgar content.

Singapore's Straits Time reported:

"The government has warned that Internet giants such as Google, MSN and Baidu, the most popular Chinese search engine, could also be shut down if they continue to link to vulgar content.

Google, Baidu and others have since issued apologies and said they have taken steps against online porn."

Click here to read more on this story from the Straits Times

Does Brazil have a cash flow problem?

Brazil seems to be having some money troubles by the looks of the press. It's not good news for Latin America when its largest economy slows, especially when until just recently it seemed Brazil (the depreciation of the Real aside) was well relatively well poised to weather the storm.

Like its fellow BRIC country's, Brazil is far from immune to the global crisis. The country is still heavily dependent on commodity exports, which was the main engine of growth for both the Brazilian economy and stock market the past few years.

Despite reports that consumer spending is still holding up and that Brazil's big state conglomerates like Petrobras are increasing spending (see MercoPress article here), it simply won't be enough to keep the economy afloat forever—and it definitely will not be enough to maintain growth levels of 4-5%.

Poor Ronaldo seen here losing at the French World

Now... for the grim news. While just days earlier Petrobras reported it will be increasing spending, yesterday things did not go its way when it went shopping in international markets to raise money. The company was forced to put off plans to sell bonds because the cost of borrowing to finance the bonds in dollar denominated debt was simply too high (see Bloomberg article here)

Moving on. Brazil's government also had some bad news to bring to the table, announcing plans to freeze roughly 6% of its planned spending budget for 2009 because slow economic growth is eroding tax collection ( see bloomberg article here)

To round up the negative news is one last story concerning loan defaults in Brazil. Credit card spending may be surging, people may be packing the stores but they aren't paying their bills. Loan defaults surged last month to their highest since September 2002 (see Bloomberg article here).

Not good news people...

South-South Cooperation: Venezuela's PDVSA begins drilling in Bolivia's Vibora Field

Petroleos de Venezuela SA (PDVSA), announced today one of its oil rigs began operations in Bolivia. Drilling is reported to have begun in the Vibora field, roughly 170 km north of the city of Santa Cruz.


Not a bad headline for Morales and his supporters who voted "yes" for a new constitution just days ago which allows for Morales to run beyond his term limits and which is partly designed to empower indiginous rights.

Bolivians back Morales Charter - Reuters

Jan 26 - Bolivian President Evo Morales appears before a crowd of supporters to claim victory in a controversial election that grants him the right to run for re-election

Bolivian voters approved a new constitution to give the poor indigenous majority more power, let socialist President Evo Morales run for re-election and hand him even tighter control over the economy.

Aymara, Quechua, Guarani and other indigenous groups who suffered centuries of discrimination in South America's poorest country largely backed the new constitution and exit polls showed it was approved with around 60 percent support.

Penny Tweedie reports.

Commodities in focus – Gold prices rise above $900/oz

The spot price of Gold rose above $900/oz on Monday for the first time since October 10, 2008.

Gold ETF's also benefited. New York's SPDR Gold Trust GLD, the world's largest gold EFT allows investors to invest in physical gold like they do normal stocks. This is accomplished through issuing securities backed by physical gold stocks. SPDR said its security backed gold holdings rose 1.6% percent to an all-time high of 823.57 tonnes during Friday trading.

The ETF isn't doing all that bad either. Year-to-date it is up 4.92%. Take a look at the ETF's performance over the year year. The chart truly does justice to the age old concept of investing in gold as a safe heaven. With interest rates so low, investing in Gold, even at yields of 4.92% will become even more enticing as banking woes persist in developed world.




The Royal Bank of Scotland's head of commodity strategy, Nick Moore told Reuters factors including falling interest rates, the re-inflation of Western economies and the prospect of lower supply both from mines and via central bank sales were supporting gold.

“In times of economic crisis, falling equity markets and mounting aversion to risk, physical gold is preferred as the safest form of investment,” Commerzbank analyst Eugene Weignberg said.

Below I have included two links. The first link directs you to a informative analysis and perspective on the gold market by Lawrence Williams who, along with his “expert panel” are forecasting gold prices to reach a high of $1074/ oz.

The second is a article about how gold miner Red Back has managed to successfully raise capital on the Toronto Stock Exchange, further indication of the support for gold.

Forecasting the gold price – expert panel predicts $1074 high, Mineweb readers $1305 – Mineweb

Gold miners still able to raise capital from the markets – Mineweb

Direct flights open between Peru and Cuba! -- Andina reports

Lima, Jan. 26 (ANDINA).- TACA Airlines will begin flying directly between Lima (Peru) and Havana (Cuba) in the first quarter of 2009.

Beginning on March 23rd, TACA will fly three times a week on the Lima-Havana route to meet the growing demand from travelers.

Click here to access the full article from Andina

Global financial crisis lifts Australia's four largest and relatively healthy banks into the top 20

Australia's big banks have joined the ranks of the world's largest banks. Australian banks have seen their share prices plummet around 50%, but no less remain in relatively healthy positions when compared with their counterparts in the United States and United Kingdom.

Total stock market capitalization of Westpac, Commonwealth Bank, National Australia Bank and AZN (Australia and New Zealand Banking Group) is now greater than Citigroup, Morgan Stanley, Barclays and Deutshe Bank.

Phil Chronican, head of institutional banking at Westpac said “the maintenance of the bank's market capitalization and value compared with its international peers had increased its reputation and knowledge among major institutional investors.

The banks seem in good position for foreign expansion and acquisitions. ANZ has already been widely successful in Asian markets. Westpac now ranks at the 9th largest bank in the world, and is seeing its foreign exchange deals increase substantially.

"The Australian banking sector is now roughly a quarter the size in market capitalization of the US listed banking sector and much larger than the UK, which raises the question why not expand and become seriously global," Mr Davison said. "However, we believe the most likely scenario is domestic banks will simply be in suspense from the ever changing effects from the nationalization of banks in these foreign markets and survival as a private entity will be deemed being successful."

Click here to read a more comprehensive report of this story at the Australian

Happy New Year China!

Chinese people around the world began their 15 day long lunar-calendar celebration this weekend, ushering the start of the "Year of the Ox."

Citizens go shopping in Fuzhou, capital of south China's Fujian Province, Jan. 25, 2009.
Spring Festival, or the Chinese Lunar New Year, is the most important traditional Chinese
festival of family reunion. It falls on Jan. 26 this year.(Xinhua/Wei Peiquan)

Chinese folk lore describes the Ox as a sign of prosperity through fortitude and hard work. Appropriate considering the current financial crisis don't you think?

Just in case you where wondering... If you happen to be born in the Year of the Ox (1913, 1925, 1937, 1949, 1961, 1973, 1985, 1997, 2009), you are believed to have a natural tendency to exhibit patience, speak little and inspire confidence in others. Not a bad set of characteristics huh?

Anyway... Happy New Year to the billion + Chinese around the world and all others celebrating this joyous holiday!

Migrant workers, who could not return home for the Spring Festival,
gather together to have new year's dinner in Guilin, a city of south China's
Guangxi Zhuang Autonomous Region, Jan. 25, 2009. (Xinhua/Chen Ruihua)

Looking to the East -- Peru and South Korea to discuss a FTA in March

Peru and South Korea have agreed to hold the first round of negotiations for a Free Trade Agreement this March, according to Peru's Minister of Foreign Affairs and Trade.

Korean President, Lee Myung-Bak (left)

Peruvian President, Alan Garcia (right)
Photo: ANDINA /Jack Ramon

Preliminary work for the FTA was compiled in Lima January 20-21, days after the Asian Pacific Economic Cooperation (APEC) had concluded.

“At the preliminary talks, the two sides agreed upon the scale, formation, process and schedule of the Korea-Peru FTA, and together laid the groundwork for effective negotiations in the future," the ministry said.

The two sides will now examine each others drafts of the Agreement before meeting in March, at which point they will debate and hopefully find a middle ground on how to go about opening each market up to one another.

This is great evidence of something that has been written about on this site since its creation, that is—the Pacific countries of Asia and South America are finding cooperating in both economic and political contexts is beneficial for all parties and increasingly necessary in this global and interconnected world.

Bolivia nationalizes one of the last remaining foreign owned natural gas fields

Bolivia's President Evo Morales, on Friday nationalized one of the last remaining gas fields of which a foreign entity was the still the major share holder. Standing alongside his supporters, military and thousands of indigenous leaders Morales explained his "regret that some energy companies do not respect Bolivian laws."

President Evo Morales

The Carrasco gas field is located in the central province of Cochabamba, which by most accounts is Bolivia's wealthiest. Prior to nationalization, the Chaco gas company controlled the production from this field.

British Petroleum (BP) owns 60% of Pan American Energy which in turn owned until yesterday, 51% of Chaco. The remaining 49% was already in Bolivian control... by the country's state-owned petrol company, Yacimientos Petrolíferos Fiscales Bolivianos YPFB which owned the remaining 49%.

Chaco, which operates about a dozen gas fields in Bolivia recently announced plans that it would invest $64 million to increase gas production in the country. Despite the good will, Hydrocarbons Minister Saul Avalos, explained the government was not able to reach an agreement with Pan American Energy on how to arrange for majority control to pass to YPFB.

There are interesting developments from the Andean nation. A mere two days before the referendum on the new constitution President Morales has proposed.

Brazilian province of Minas Gerais floods -- Reuters video

Jan. 23 - Rescue teams rush in to save trapped flood victims as heavy rains and severe flooding continue to plague Brazil's southeastern state of Minas Gerais.

27 people have died in the state since the rainy season began in September and over 100 districts have declared a state of emergency. Pavithra George reports.SOUNDBITE: Alexandre Fernandes Rosario

For those of your who are not too familiar with Minas Gerais, it is Brazil's 2nd or 3rd most important region after Sao Paulo and Rio de Janeiro. Called Minas Gerais because of its mineral wealth. The province is supposed to be one of Brazil's driest, hardly ever getting rain. So you might be able to guess why it's a big deal when it floods like this.

South-South Cooperation in focus: Venezuela & Argentina

Argentine President Cristina Fernandez signed 21 agreements on Thursday with the country of Venezuela. The agreements are meant to lay the foundation for future cooperation between the two South American nations in such fields as energy, industry and transportation.

Argentinian President Cristina Fernandez (L) and Venezuelan President Hugo Chavez
attend the signing ceremony in Caracas, the Capital of Venezuela, Jan. 22, 2009.

The two presidents agreed to set up a joint venture between Petroleos de Venezuela (PDVSA) and Argentina's state-operated Enarsa energy company to develop oil fields in Venezuela.

"Our strategic cooperation is increasing," Chavez said when referring to the commercial and diplomatic ties between Venezuela and Argentina.

Click here to read further details from this article, courtesy of Xinhua

South-South Cooperation in focus: Peruvian PM to meet with Correa in Ecuador

The PM of Peru, Yehude Simon travels to Ecuador today to hold a meeting with Ecuador's president, Rafael Correa (the one who recently caused all those headlines with the bonds) to discuss bilateral trade topics.

According to the information reported over at Andina, Simon is heading to Ecuador discuss and resolve any problems related to the Resolution No 466 adopted by the Foreign Trade and Investments Council (COMEXI) of Ecuador.

"Resolution No 466 authorizes the application of a protection measure for balance of payments, general and not discriminatory, to imports of all countries including those that have trade agreements in force with Ecuador which recognize tariff preferences, as it is the case of Peru."

Click here to access Andina's article on this topic

Many face gloomy Chinese New Year -- AlJazeeraEnglish

Hundreds of thousands of Chinese have begun their journey home for the Chinese New Year festivities, but for many, the global economic downturn has left very little to celebrate.

Al Jazeera's Melissa Chan reports on those who have taken the one-way ticket home.

Good readings

Opinion: India, China, and Obama's Oil Policy
by William Nobrega
Business Week Online 1/22/2009


If China's Growth Goes South What Happens to Oil?
by G. Allen Brooks
Parks Paton Hoepel & Brown 1/22/2009


The China factor and what it means for the price of copper
by Simon Hunt
Weybridge, UK (SHSS) 1/14/2009

Reuters Video -- China's GDP Slows