Many experts say that there is no asset price bubble in Brazil because Brazilians are not leveraged, citing the country’s low credit-to-GDP ratio. This statement is, at least, questionable…

Roberto Attuch, analyst at the São Paulo branch of Barclays Capital told the local press that Brazilian’s home mortgage payments “went from being about 25% of income in June 2006 to about 40% in November 2010.”
A good read from Walter Morano:
“Unfortunately, consumer credit is the main driver behind the frenzy of economic activity. Brazilian households are now addicted to credit, in the same way that their North American brethren were just a decade ago. Recent government measures to restrict credit were mainly focused on the small and medium-sized banking institutions. However, there has been an explosion of shadow-banking activities that are providing new credit opportunities for households. Retailers are using securitization and receivables funds, known as FDICs, to provide “zero-interest rate” credit cards to boost sales. The problem is that these loans are outside the purview of the central bank and financial regulators. Therefore, this is the reason why consumption continues to soar ahead, despite the government’s attempt to temper the level of economic activity. Things are so tight that consumers complain endlessly about the lack of available goods and services. There are waiting lists for all sorts of durable goods and automobiles. Airline flights are oversold and hospitals are running at full capacity. Nevertheless, the government’s policy of concentrating power in the hands of a few players only creates obstacles at promoting competition and efficiency. The structural conditions driving consumer prices higher, while reducing income equality, are well known ingredients for social unrest.Brazil may be “o maior do mundo,” but at the current pace it is headed for an unnecessary explosion.”
Full Article Here: “Brazil: O Maior do Mundo

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