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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...
China Development Bank keen to support projects in Peru – reports Andina.com
Lima, Nov. 30 (ANDINA).- The China Development Bank (CDB) is interested in supporting infrastructure and agricultural projects in Peru as part of a cooperation agreement recently signed with Peruvian state-bank Banco de la Nación (BN).
"China Development Bank is very interested in infrastructure and agricultural projects that involve development of rural communities in Peru," BN general manager Julio del Castillo told Andina news agency...
Click here to access the full story from Andina.com
BRIC Shoppers Will “Rescue World” Says Goldman Sachs Economist – reports Bloomberg's William Mellor and Le-Min Lim
Dec. 1 (Bloomberg) -- The best hope to keep the global economy growing may be people like Wei Yufang. A peasant who farms a small plot beside the mud-brown Huaihe River in central China, Wei has a modest dream: to buy an air conditioner to give her family relief from the dusty heat that each summer envelops Xiaogang (Little Hill) village in Anhui province.
With economies from the U.S. to Japan in recession, Wei and the other 2.8 billion people in Brazil, Russia, India and China may provide the consumer demand needed to counter the slump.
Jim O’Neill, the Goldman Sachs Group Inc. economist who in 2001 coined the acronym BRIC from the initials of the four big emerging economies, says the faster growth investors have come to expect from these countries will survive this crisis. O’Neill, who is based in London, says the citizens of the BRIC nations are poised to spend more. “The BRIC consumer is going to rescue the world,” he says...
Click here to access the full story from Bloomberg LP
China, India Drop Inflation Controls as Economic Growth Slows – reports Bloomberg's Nipa Piboontanasawat and Thomas Abraham
Dec. 1 (Bloomberg) -- China and India lifted controls targeting prices of products from vegetable oil to natural rubber after inflation eased in the world’s fastest-growing major economies.
China today stopped requiring companies to seek approval for some food-price increases, the government said. India dropped a ban on futures trading in natural rubber, soybean oil, potatoes and chickpeas, the consumer affairs ministry said.
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“For China, the main focus of the government is to boost economic growth and prevent deflation,” said Wang Qing, chief China economist at Morgan Stanley in Hong Kong.
In India, Prime Minister Manmohan Singh dropped a seven- month ban on futures trading in natural rubber, soybean oil, potatoes and chickpeas...
Click here to access the full story from Bloomberg LP
China's Manufacturing Contracts by Record on Exports – reports Bloomberg's Nipa Piboontanasawat
Dec. 1 (Bloomberg) -- China’s manufacturing shrank by the most on record and export orders plunged, adding to evidence that recessions in the U.S., Europe and Japan are dragging down the world’s fastest-growing major economy.
The Purchasing Managers’ Index fell to a seasonally adjusted 38.8 in November from 44.6 in October, the China Federation of Logistics and Purchasing said today in an e- mailed statement. A second PMI, released by CLSA Asia-Pacific Markets, also showed a record contraction...
Click here to access the full story from Bloomberg LP
Following visit Russian leader calls for bigger LATAM role
Russian president Dmitri Medvedev said he was very satisfied with his Latinamerican tour which took him to Peru, Brazil, Venezuela and Cuba because it enabled to re-establish strong links with the region.
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“Latinamerica is a region developing fast, which has a concentration of significant intellectual and natural resources, and most important the peoples of the region want to cooperate with Russia”, added Medvedev
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“We are prepared to increase political, economic and military cooperation with Latinamerican countries and their leaders, particularly in a world with so many security problems and challenges.” ...
Click here to access the full story from Mercopress
1) India and China step up protection from global crisis -- courtesy of Bloomberg LP
Nov. 3 (Bloomberg) -- India and China are accelerating efforts to prop up growth as a global slump threatens the world's fastest-expanding major economies.
The Reserve Bank of India on Nov. 1 lowered its benchmark interest rate for the second time in two weeks, and for the first time in 11 years reduced the amount of money lenders are required to keep in government bonds. China's central bank removed temporary controls over loans to maintain ``relatively fast'' growth, Xinhua News Agency reported Nov. 1, three days after cutting its key rate for the third time in two months.
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Emerging Asian economies that account for one-fifth of world growth are being dragged down as their main markets in the U.S. and Europe contract, increasing the likelihood of a global recession. Policy makers in India and China are also boosting spending to prevent their economies from going under.
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China's Premier Wen Jiabao says sustaining economic growth is the government's ``first priority.'' China has already raised export incentives, cut costs for home buyers and pledged infrastructure spending.
India and China need to move fast to implement their stimulus plans, with growth already slowing in Asia's second- and third-largest economies amid weaker foreign demand.
2) China's stocks drop to a two-year low -- courtesy of Bloomberg LP
China's stocks fell to the lowest in almost two years, led by industrial companies, after a report showed China's manufacturing contracted amid the worst financial crisis since the Great Depression.
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The CSI 300 The CSI 300 has slumped 69 percent this year, making it Asia's worst-performing benchmark index. Stocks have fallen amid concern demand for Chinese products will decline as the global credit crisis drags the world's largest economies into recession.
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Net income at the 487 companies listed on the Shenzhen Stock Exchange's main board rose 3.4 percent in the first three quarters, a fraction of the 89 percent increase a year earlier, according to data in a statement released by the bourse today.
Economy Slows
China's economy grew at the slowest pace in five years in the three months through September as export orders shrank and industrial production waned. The expansion cooled for a fifth straight quarter, to a 9 percent gain from a year earlier.
3) Subbarao Abandons India 'Inflation Vigil,' Cuts Rates -- courtesy of Bloomberg LP
Nov. 3 (Bloomberg) -- Indian Central bank governor Duvvuri Subbarao has abandoned the "inflation vigil'' he outlined just 10 days ago in his inaugural monetary policy statement.
For the first time since 1997, the Reserve Bank of India on Nov. 1 deployed all three of its main tools to shore up growth after inter-bank lending rates climbed to 21 percent. Economists at Yes Bank Ltd. and Standard Chartered Bank predict more interest-rate cuts following the weekend reduction.
``India's central bank has no other option but to focus on economic expansion," said Shubhada M. Rao, chief economist at Yes Bank Ltd. in Mumbai. ``Global cues have turned against growth and it was surprising to see the hawkish tones on inflation'' last month.
Subbarao, less than two months into the job, has grappled with monetary policy at a time when inflation is double the central bank's target and a global downturn threatens to hit the economy. The central bank's renewed focus on growth aligns with Prime Minister Manmohan Singh's push to buoy the economy ahead of elections due by May.
The decision to cut rates on Nov. 1 was a U-turn from the stance Subbarao spelled out in his first statement. At that time, he said price pressures could come from lower farm production, volatile oil prices and a weaker rupee.
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4) BRIC see no relief even as rally lures stock bulls -- courtesy of Bloomberg LP
Nov. 3 (Bloomberg) -- Forget last week's record 20 percent gain in emerging-market stocks. Hard times are ahead for equities in Brazil, Russia, India and China, some of the world's biggest money managers say.
Even with developing-nation shares trading at their cheapest levels in a decade, financial crises in Hungary and Pakistan that required international rescue packages and concern that economies from Turkey to Argentina are also teetering prompted investors to pull out of emerging-market funds at a record pace.
RBC Capital Markets cut its estimates on Oct. 23 for 2009 economic growth in Brazil to 2.5 percent from 4 percent and Russia to 4 percent from 6 percent. That may undermine analysts' forecasts for a 14.5 percent increase in earnings at a time when the global credit crunch seized up lending from Sao Paulo to Seoul and a slump in 24 of 25 developing-nation currencies last month inflated the costs of repaying dollar-denominated debt.
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5) Brazil central bank to signal interest rate outlook: week ahead -- courtesy of Bloomberg LP
Nov. 3 (Bloomberg) -- Brazil's central bank may provide signals on the outlook for interest rates after halting six months of increases to weigh an economic slowdown against inflationary pressure from a weakening currency.
Economists will be closely reading the minutes from the bank's Oct. 28-29 meeting, to be published Nov. 6, to gauge whether its unanimous decision to pause rate increases herald a change in policy.
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6) After Colorado rally Obama says U.S. - Peru ties to grow stronger -- courtesy of Living in Peru
RPP Noticias, a local news agency in Peru had the chance to speak with Barack Obama after his final campaign stop in Colorado on Saturday November 1.
After a festive meeting with thousands of jubilant supporters dancing in the streets, Obama affirmed to RPP reporters that the relationship between the United States and Peru would grow closer and stronger.
RPP correspondents explained Obama made these statements as he was leaving his rally, which was compared by Peru reporters to the presentation of a famous show-business star.
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China's foreign media is reporting Hu Jintao's participation in the G-8 summit this week as a milestone, calling it a "major diplomatic move which produces important achievements in many aspects for China."
Click here to access the full story from Xinhua-- China's State Media
Through the G8 outreach session in recent years, communications between the world's developed and developing countries have been conducted on key issues to coordinate stance and seek solutions to key issues, a move deemed conducive to the South-North cooperation and the settlement of global problems reports Xinhua.
It is interesting how China's state media describes Hu Jintao's presence at the G-8. Western press has been very critical as to why China, India and other emerging markets are not included in the some of the more important meetings which only the actual G-8 member countries can attend.
It is clear developing countries have gained some influence in the international arena. The global food crises, energy crises, climate change and other important issues can no longer be left to debate soely amongst the world's industrialized and wealthiest nations.
Described both in this upate and in my post yesterday, developing countries are increasingly forming their own strong connections with one another. The leaders of the BRIC countries; Brazil, Russia, India and China can be seen below expressing their solidarity at the end of the G-8 summit. These four emerging market giants want to make it clear that on certain issues they stand united and that when united their voice should not and can not be ignored.
After all, accounting for only the populations of the BRIC countries, these four nations represent roughly 2.7 billion people...
Chinese President Hu Jintao (2nd R), Russian President Dmitry Medvedev (2nd L), Indian Prime Minister Manmohan Singh (1st L) and Brazilian President Luiz Inacio Lula da Silva (1st R) pose for a photo as they meet at Toyako in Hokkaido, north Japan, on July 9, 2008. (Xinhua Photo)
Poor Ronaldo seen here losing at the French World 
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