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Lackluster Recovery: Brazil GDP grew by just 0.9% over 2012

Posted on March 1, 2013 · 9 Comments
Screen shot 2013-03-01 at 6.49.27 AM
A report showed Brazil’s economy expanded in the fourth quarter at a slower pace than forecast. GDP grew by 0.6% q/q in the fourth quarter of last year, meaning that the economy grew by just 0.9% over last year as whole. Here is what Capital Economics’ Neil Shearing had to say about the weak numbers: “Brazil’s recovery [...]
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Top 20: World cities with the most billionaires; Sao Paulo at 12th

Posted on March 1, 2013 · 1 Comment
jorge paulo leman
A survey by a China-based wealth magazine claims Asia has more billionaires than any other continent. The Hurun Report, which compiled the list, suggests there were 1,453 people around the world with a personal wealth of $1 billion or more as of January 2013, including 608 in Asia, 440 in North America and 324 [...]
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Chart: 2013 Global stock market performance; Brazil is the 3rd worst only ahead of Slovakia and Jamaica

Posted on February 28, 2013 · Add Comment
stock market world
Below is a table from Bespoke highlighting the year-to-date performance of the major stock markets for 77 countries around the world. The BRICs (Brazil, Russia, India, China) have not had a great start to the year.  China is up the most of the BRICs, but it’s only up 1.94%.  Russia ranks second with [...]
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Hong Kong’s property bubble and its upcoming bust

Posted on February 28, 2013 · 1 Comment
Screen shot 2013-02-26 at 6.27.06 AM
Since the US began quantitative easing, Hong Kong home prices have doubled (see chart). Last week, according to FT, Li Ka-shing’s Cheung Kong Holdings sold 360 individual hotel rooms in the New Territories for a cool $180m. Hong Kong regulators are now raising stamp duties and trying to restrict home loans to cool down a real estate market that has [...]
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Top 10: The Most Expensive Neighborhoods in Brazil

Posted on February 28, 2013 · 6 Comments
Screen shot 2013-02-26 at 5.20.47 PM
Prices below are as of January 2013 and refer to the average price per square meter, as advertised by Zap’s website. The research underlying this FipeZap index is updated every month for 16 cities. Neighborhood                            City             [...]
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The coming dollar bull run: will it end in another crisis?

Posted on February 27, 2013 · 5 Comments
us dollar
We have just recently wrote that in the dollar bear market of the past decade, the BRIC countries have been the darlings of international speculative capital. But in recent months, the BRIC countries no longer receive strong inflows anymore. Their currencies have been under downward pressure. The chances are that the market consensus on the [...]
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Chart: Why is Turkey underperforming?

Posted on February 27, 2013 · Add Comment
turkey stock market
After gaining 52% in 2012, the MSCI Turkey Index has dropped 3.6% in 2013. TheMSCI Emerging Markets Index is essentially unchanged this year. To get a sense of the turnaround, take a look at the chart below from Barron’s. It shows the MSCI Turkey Index divided by the MSCI Emerging Markets Index. When the line is rising, Turkey [...]
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Short sellers advance on Brazilian stock market (Valor Economico)

Posted on February 27, 2013 · Add Comment
short-sale
(an excerpt from Valor Economico article written by Teo Takar) In today’s bear market, borrowing stocks is increasingly becoming more common at brokerages’ trading desks. The financial volume of this type of transaction tripled in the last four years and continues growing at a fast pace. Whereas the leading stocks on the Brazilian market seem [...]
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iBovespa down 7% in 2013: How does Banco Votorantim’s comic forecasts of 40% equity returns stand so far?

Posted on February 26, 2013 · 1 Comment
ibovespa
The Bovespa index’s drop of 7% so far this year virtually “destroyed” the 2012 gains of 7.4%. In this up and down movement, the index seem to be on track to repeat its “sideways” move, with no direction on site. The index lost about 14% in its last 12 months (see chart below from Read Full Article →

“We could be witnessing the end of Brazil’s multi-year consumer boom”, says analyst

Posted on February 26, 2013 · 1 Comment
Screen shot 2013-02-24 at 11.21.24 AM
Between 2006 and 2012, retail sales in Brazil grew about 90%. In other words, retail almost doubled in size in less than a decade. Last December, retail sales fell by 0.5% m/m, but it’s important to remember that this follows a period of strong growth – in the previous six months sales had increased by an [...]
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Andy Lees: Emerging Markets Unable To Continue The Heavy Lifting

Posted on February 25, 2013 · 3 Comments
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In the last few days we have seen reports suggesting Brazilian household debt and service payments are weighing on growth, that Southeast Asia’s commercial credit is approaching its pre-1997 financial crisis peak of 75% GDP, and that South Korea’s household debt has reached 164% of disposable income compared with 138% in the US at the [...]
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Brazil’s labour market strength is puzzling considering the weak economy, says Capital Economics

Posted on February 25, 2013 · 8 Comments
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According to London-based research firm Capital Economics, Brazil’s “puzzling” labor market has continued to defy gravity even as the economy has slowed to a crawl – from 7.5 per cent in 2010 to about 1% in 2012. Here is what the CE’s emerging markets team led by Mr. Neil Shearing had to say: “The most puzzling aspect [...]
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Chart: Hedge funds are dumping gold like there’s no tomorrow

Posted on February 22, 2013 · 4 Comments
gld gold positions
Hedge funds have been lowering their holdings of long-time favorites like gold. Holdings in GLD were lower than they have been in at least four years, equaling just 0.6% of long positions as the ETF fell 6% in price… Like Howard Marks recently said: “There is nothing intelligent to be said about gold. Nobody [...]
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Consumer defaults in Brazil rose 15 percent in 2012, but bullish analysts say “Brazilians are now saving more”

Posted on February 22, 2013 · 3 Comments
casas bahia
About one in every six households is now overleveraged, according to a recent report by Santander (via Reuters). But still, many economists believe Brazil’s consumers still have room to spend more and support an economy that has otherwise stagnated in the past two years, as sectors like manufacturing struggle. The more bullish analysts tend to see recent [...]
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Roubini’s Perfect Storm (again): US’ economy on the edge, BRICs’ declining growth, China’s bust, Euro’s stagnation, Arab’s oil spring

Posted on February 21, 2013 · 4 Comments
roubini
Nothing like great piece of news from “Dr. Doom”… 2013 looks promising so far! Here’s a quick review the macroeconomic dangers Dr. Doom Nouriel Roubini saw in his late January warning on Slate.com: “Prepare for a Perfect Storm.” Our world is a game of dominos, any one of which could put in motion a global [...]
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US CEO: Stupid to do business in France; the “so-called workers” put in only 3 hours a day!

Posted on February 20, 2013 · 7 Comments
france
No news here really, but… OUCH! The CEO of Titan, a U.S. tire maker has delivered a crushing summary about France’s work ethic in a letter saying he would have to be stupid to take over a factory whose staff only put in three hours work a day. Here is a highlight of what he [...]
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PwC: “Brazil to surpass Japan and become the world’s 4th largest economy”

Posted on February 20, 2013 · 5 Comments
largest economies ppp
… by 2050. That’s the conclusion of PwC’s study “The BRICs and Beyond: prospects, challenges and opportunities.” Perhaps this is one more of those studies predicting infinite growth for the BRICs based on past decade data… but it’s worth a read. Here are some of their findings: “China is projected to overtake the US as [...]
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Futia on the Dollar and Inflation: “Dismiss the doom and gloom about the US economy… US doomsters are wrong”

Posted on February 20, 2013 · 2 Comments
doom gloom 2
Markets expert Carl Futia has recently received an e-mail asking his opinion about the prospects for the US dollar and the US economy. Obviously, each investor and market pundit has his own opinion, but we decided to reproduce Futia’s opinion, which is interestingly bullish for the US. Below is his response: “There will be no [...]
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PIMCO and AllianceBernstein pessimistic about Brazilian stocks; Blackrock and JPMorgan optimists (Valor)

Posted on February 20, 2013 · 1 Comment
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Concern about inflationary pressure, the low competitiveness of the Brazilian economy and greater government intervention in the private sector have shunned foreign managers  from the stock market in Brazil. This year, while funds focused on emerging markets raised $30.8 billion, portfolios focused on Brazil had an outflow of $307 million by February 12… American fund [...]
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Frances Hudson: “The rise in EMs is tied to currency appreciation; economic growth does not mean strong equity market”

Posted on February 19, 2013 · Add Comment
Hudson, Frances
According to Standard Life Investments’ strategist Frances Hudson, it is much harder for countries to make the transition from emerging to developed economies than was previously commonly thought. In her latest report (link below), she concludes that emerging economies are unlikely to sustain rapid growth unless the developed world is also in growth mode. Here is [...]
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Chart: Based on Overbought/Oversold data, is Bovespa now a buy?

Posted on February 19, 2013 · Add Comment
overbought oversold markets
Thanks to Global Macro Monitor, here is a momentum chart showing the oscillation of prices around major markets around the world. The RSI moves between zero and 100 and is considered overbought with a reading above 70 and oversold when below 30. It seems like Bovespa (at almost 30) is approaching an oversold [...]
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Brazil’s corrupt politicians are zombies fooling Brazilians over and over, says The Economist

Posted on February 18, 2013 · 10 Comments
Renan Calheiros
Despite serial corruption allegations, the old guard of corrupt politicians just keeps coming back. And Brazilians seem to have just been taken for fools. Here’s from a recent “The Economist” article: “Mr Calheiros is the latest example of a well-established Brazilian phenomenon: the politician who can survive any number of seemingly killer blows. Paulo Maluf, [...]
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Brazilian REITs starting to unravel? Four real estate funds default on payments within two weeks

Posted on February 18, 2013 · 2 Comments
A recent report from InfoMoney  highlighted a growing incidence among Brazilian commercial real estate investment funds (like REITs) defaulting on interest payments on properties. Real estate funds Panamby (PABY11) and RSB1 will not pay their dividends for the month of February, according to a statement from their managers Brascan and NSG Capital. Brascan, manager of [...]
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Barron’s Cover Blasts Obama: “Follow me, we can be like Greece”

Posted on February 17, 2013 · 3 Comments
barrons obama
The magazine cover is somewhat polemic. Barron’s recent article on Obama concludes that hiking taxes alone won’t put the U.S. on a sustainable fiscal trajectory. Thus, the idea is that politicians embrace the upcoming sequester of spending cuts set to take effect March 1. Here is from the article: “In his State of the [...]
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Andy Xie: BRICs today are exactly like Southeast Asia before the ’97 crisis

Posted on February 16, 2013 · 1 Comment
AndyXie
In the dollar bear market of the past decade, the BRIC countries [Brazil, Russia, India and China] have been the darlings of international speculative capital, like Southeast Asia fifteen years ago. Even though they have little in common, just a phrase has launched numerous funds in their name. Whenever there is a hot concept like [...]
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Is Ray Dalio’s hedge fund Bridgewater betting on Brazil?

Posted on February 15, 2013 · 1 Comment
Ray Dalio
Bridgewater, the massive hedge fund run by Ray Dalio, has increased its positions in emerging-market exchange-traded funds. Here are his EM ETF investments, according to his SEC filings: Its position in EEM climbed to $2.5 billion during the fourth quarter, from $1.4 billion at the end of the previous quarter, while its stake in Read Full Article →

Chart: The most and least active countries in the “currency wars”

Posted on February 14, 2013 · 3 Comments
Currency-war-ranking-HSBC
A recent research from HSBC found out that (surprise surprise) currency wars are on the rise as of late and produced this rather useful chart to indicate which countries are the most (and least) active in this scenario. Some of the strongest concerns have been expressed in emerging economies. In particular, Brazilian [...]
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Ranks: Here are the world’s largest stock exchanges by market cap

Posted on February 14, 2013 · 2 Comments
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According to the World Federation of Exchanges (WFE), in 2012 the global equity market capitalization grew 15.1% to about US$55 trillion, even though the volume of transactions dropped by 22%. The best performance in 2012 was observed in the Americas (+17.2%) followed by Asia-Pacific (+15.4%) and EAME (+11.6%). Here are the largest domestic equity market [...]
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Five of the 10 most-shorted stocks in Brazil are homebuilders; demand for homes is cooling

Posted on February 13, 2013 · 1 Comment
pdg mrv real estate brazil
According to data from Bloomberg, traders are increasing bets that PDG, Brazil’s worst- performing homebuilder in 2012, will plunge further after short positions returned more than 60 percent in the past year. The ratio of borrowed shares in Brazil’s third-biggest homebuilder exceeds 16 percent, the third highest among companies on the benchmark Bovespa index and [...]
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Brazil x Mexico: Is The Economist magazine cover a good predictor of economic weakness?

Posted on February 13, 2013 · Add Comment
brazil gdp
In 2010, many thought the Mexican economy had been settled. The Brazilian economy, more than double the size of Mexico’s, grew at a 7.5% annual rate while Mexico puttered forward at close to 2%. What a difference two years makes. While the Brazilian economy shambled along at an annualized rate of 1.0%, the Mexican economy grew [...]
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