TheEconomist

President Bush is speaking now, no annouce some help to house sector in US.

Federal Reserve´s presidente Ben Bernanke, said he will do everithing is necessagy to face the house sector crisis in, but it´s not his role to help banks.

It means there will be no raise in US basic rates now in 5,25%.

Fed will review it next 18th and may as well as may not cut something like 0,25%.

We do not believe it will hapen, as we said since the begining of the crisis.

The Global Worl Empire´s central bank will not do anything different from the good old monethary policy.

-We all know what has to be done, but people seems to love dreaming… - said a first line Brazilian bank CEO, friend of us and very very cautious.

Indeed the chances for an interest rate cutting now is less than 50%, we´d bet.

There a few recent figures on macroeconomic situation of Brazil facing the reflex of American slowdown, to name.

(… in a few minutes, please… ).

Nothing like a day after another one, says the Portuguese.

Everything looked nice today in Brazilian economy - even the stock markets went up again in Sao Paulo (2,11%), following Wall Street (Dow Jones up 1,9, Nasdaq 2,5%).

And, basically, the exuberance spread around by US Federal Reserve with a few more billions given to save banks.

Exchange rates in Brazil keeps on floating, as it should be in this world finance crisis:

US dollar was negotiated by the end ot the day at R$ 1,966 for US$ 1,00 (better than crisis breaking point of 2,0).

All figures are far out in Brazilian economy, at least to Banco Central:

* Foreing Reserves are up again in few days, from US$ 158 billions to US$ 161 this Wednesday;

* Inflation is under control (small pressure on July prices);

* Foreing commerce must end this year with a surplus around US$ 44,5 billion, as Central Bank´s directors told the press this evening in Brasilia.

The balance of commerce registered a surplus of US$ 44,3 last month, just a little bit lower than June´s figures (US$ 44,3 bi).

Well, as a friend from Rio said today at an internet meeting, the only thing President Lula is in debt with Brazil is a deep economic reform.

To cut public expenditures (which are growing as GDP´s 5%) to modernize the country and GNP growth at sustained 7% yr without destroing Amazon forest for that purpose.

No more than the usual - that´s what is expected from cabinet meeting President Lula is helding this Thursday to listen Minister of Finance Guido Mantega on the external finance crisis.

He´s got nothing new to say but reinforce the goodness of Brazil´s accounts and economic situation: foreing reserves are about US$ 160 bi, balance of commerce surplus around US$ 40 bi this year and inflation goals being fulfilled (around 4% and under control since Real Plan in 1994).

But Lula´s goverment has already started to act against the worst thing he could expect from now to 2010 when there will be presidential elections (Constitution doesn´t allow third terms but expects to help elect his successor based on the alliance between his Workers Party (PT) and conservative PMDB.

The turmoils in stock markets this Tuesday - São Paulo followed Dow Jones 2,1% fall and closed down 2,7%, like most of stock markets around the world, in the footsteps of US finance system crisis (Barclays, who could say that, was the one under strong market pressure at Wall Street ).

What happned today in US and in Brazil has the same logic: investors want Federal Reserve to cut basic rates (presently at 5,25% aa) anytime from the beggining of the crisis, about two weeks ago.

When they found out the Fed wouldn´t give any indications that basic rates will be cutted, even at the meeting scheduled for Sept. 18th, everything came down in the markets.

Investors selling stocks that had gone recent price rises also helped this movement, but in the center of it there´s a growing feel of uncertainity about how large will the hole be at the end of the on-going adjustment  in US  financial system.

Impressions in Brasilia this Tuesday night, inside goverment and among Congress people, is that the finance crisis may be deeper than we´ve been thinking up to now and it will cause a recession in American economy that certainly will cut Brazilian GNP growth from 5% this year to something like 4,5% next year.

This is not good news for Lula - today he had another bad one comming form Supreme Court that accepted the criminal denounces against 40 people involved with the gang that promoted corruption between leftist PT and  rightist allied parties from 2003 to 2005.

President Lula called a cabinet meeting next Thursday (30) to discuss international finance crisis and its impact on Brazlian economy this year to 2010. 

Right now São Paulo stock market is down a little bit now (minus .42%).

Commercial balance superavit is gorwing to a

Volatility in exchange markets haven´t come to anything else but a nervous day all over.

Importer quant to know how much their´re gonna pay?

Exporter are optmistic - at least in Asia, this moring.

Here, expectation about the exchange rait  - wait to see how it will be.

Brazilian real is worth the same as last Friday: R$ 1,95 for US$ 1,00.

Here, everyone looks at US economic indicators like if America were in the hurricane eye.

Were?

Denise Abreu, the strong young woman who was seen smoking cigars after the Air Bus explosion (photo) in Sao Paulo Congonhas Airport, Brazil.

Now the new Defense minister, Nelson Jobim, will appoint to Congress new names for the agency, one of the responsible for the disaster that killed 199 people recently.

Famosa nos últimos dias por opor resistência a todos e tudo na autônoma Agência Nacional de Aviação Civil (Anac), Denise Abreu finalmente pediu demissão.

Diretora com mandato aprovado pelo Congresso, Denise irritou parlamentares nas CPIs do Apagão Aéreo na Câmara e no Senado, pela arrogância que não foi desfeita por pedidos formais de desculpa.

Nomeado pelo presidente Lula para resolver a crise aérea brasileira, o maior problema deste segundo mandato, o novo ministro da Defesa, Nelson Jobim, perdeu a paciência ontem com a Anac e pediu de público que a diretoria toda renunciasse para facilitar a solução dos problemas.

No Congresso, ela tentou ao longo da semana enrolar senadores e deputados com a estória de um documento que foi parar na internet (sobre normas para não serem permitidas aterrisagens em Congonhas de Air Buses com reverso travado sob chuvas).

Nem o digitalizado e experiente deputado verde Fernando Gabeira (PV-RJ) conseguiu que Denise entregasse o jogo na CPI do Apagão Aéreo, pois ela dizia que o documento não era oficial, não sabia porque foi para a rede de computadores e, finalmente, de que não valeria de qualquer forma para aviões do tipo que explodiu em Congonhas (foto).

Para os deputados, Denise e a Anac devem ser co-indiciadas pelo acidente com 199 mortos com o Air Bus da TAM no aeroporto de Congonhas - pelo menos.

A ex-diretora é acusada também de ter feito gestões para beneficiar amigos empresários com a transferÊncia da área de cargas da capital paulista para aeroportos no interior do estado.

(detalhes nas agencias)

“IMF is unemployed”, said today Natan Blanche, Tendencias Consulting´CEO in Sao Paulo, commenting the impact from intrnational credit crisis on Brazilian economy this year and 2008.

What he menas is that the whole job is being done by the Fed and other central banks in Europe and Asis, in a completely new situation of global economy.

Tomorrow Bank of Japn is to decide wheter the present interest rates should be kept or raised a hl point or so.

Similar expectation feeds the stock markets all over, as Federal Reserve let it be understood that could hapen in Sept 18th or even ealier. The Fed it would make everything that could be necessary to stabilize the credit markets.

Fusions and assets shifting estimulated good results also in Europe, following New York, and Sao Paulo, up 3,87% at the end of the day. 

The europeans are the ones to suffer the largest piece of loss in the already running assets accomodation.

The problem for president Lula team is now to figure out what´s gonna happen to exchange rate at home and how the world economy will react to lower groth in US.

Dollar at this momment ( 1h30PM) is stable in its new equlibirium point,  around 2 reals: after been up at 2,2 and the stepping back at R$ 2,11.  Before the crisis US currency was worht R$ 1,80.

Anyway, Brazilian GNP must growth around 5% this year but can suffer next year the negative impact of fiscal adjustment beeing the confidence word and of lower economic growth at the Unidades States, 25% of global economy.

Economist Blanche said it´s possible but he himself doesn´t believe in interest rates reductions by the Fed.

The job is being done and probably will continue to be doing by the Fed and its similars, using classical monethary tools such to inject or extract money from the banking system.

That´s why we maybe should look for another job for International Monetary Fund (IMF).

“IMF is unemployed”, said today Natan Blanche, Tendencias Consulting´CEO in Sao Paulo, commenting the impact from intrnational credit crisis on Brazilian economy this year and 2008.

What he menas is that the whole job is being done by the Fed and other central banks in Europe and Asis, in a completely new situation of global economy.

Tomorrow Bank of Japn is to decide wheter the present interest rates should be kept or raised a hl point or so.

Similar expectation feeds the stock markets all over, as Federal Reserve let it be understood that could hapen in Sept 18th or even ealier. The Fed it would make everything that could be necessary to stabilize the credit markets.

Fusions and assets shifting estimulated good results also in Europe following New York and here, in Sao Paulo.

The europeans are the ones to suffer the largest piece of loss in the already running assets accomodation.

The problem for president Lula team is now to figure out what´s gonna happen to exchange rate at home and how the world economy will react to lower groth in US.

Dollar at this momment ( 1h30PM) is stable in its new equlibirium point,  around 2 reals: after been up at 2,2 and the stepping back at R$ 2,11.  Before the crisis US currency was worht R$ 1,80.

Anyway, Brazilian GNP must growth around 5% this year but can suffer next year the negative impact of fiscal adjustment beeing the confidence word and of lower economic growth at the Unidades States, 25% of global economy.

Economist Blanche said it´s possible but he himself doesn´t believe in interest rates reductions by the Fed.

The job is being done and probably will continue to be doing by the Fed and its similars, using classical monethary tools such to inject or extract money from the banking system.

That´s why we should look for a new job for International Monetary Fund (IMF).

President Lula said this morning in his weekly radio talk that Brazilian economy has not been hit yet by the American house-financing crisis, although there are enemies trying to make this happens for political purposes. 

Yeah, he´s right: up to now there´s nothing wrong with Brazilian markets this Morning with central banks all over agreed to put some money to calm down speculators.

Sao Paulo SE was up 2% a few moments ago and probably will follow NY tendencies today.

Exchange rate between Brazil´s real and US dollar is stable this afternoon and it is expected to flutuate around 1,9 and 2,1 in the immediate future.

One thing  people at Finance Ministry told us off the record is the clear perception of someone being actually inside the eye of the hurricane, as minister Guido Mantega said last week.

Even you can´t see it cleary, you feel it´s around - and it´s terrific such as a friend from Austin told us about images coming from Caribbean islands hit by Dean yesterday.

US Federal Reserve kept on injecting money on the American banking system, as did the Japanese monetary authority, which is helping to keep the markets calm, like it was in Europe today. 

The “thing” is the perception that there is a financial internacional crisis on the going and investors are moving  towards US bonds, leaving behind worried emergent markets.

Brazil´s risk rate is still high, compared to other countries, around 215 points at JP Morgan.

Nobody doubts Brazilian GNP will close this year around 5% - the highest in this century and the first step for Lula´s allied parties dreaming about some kind of third term without Lula (he´d rest for coming back for years later), maybe with Defense minister Nelson Jobim (PMDB) and Civil Affairs minister Dilma Roussef (PT).

It´s all still, the dreams. People sleeps with an open eye.

Real side of Brazilian economy is doing well upt to now.

And it will get better with the green revolution (ethanol and conservation of Amazon forest), paving the road for next years of not so modest GNP rates.

People who sleeps deeply usually are more optimistic and dremans Brazilian economy growing at 7% in election year of 2010.

Brazilian economy will grow between 4,5 and 5% this year in spite of the US credit crisis impact still on the financial level, according to economist Alexandre Shwartsman, talking to journalist Miriam Leitao on GloboNews TV.

Former president of Brazil´s Central Bank Affonso Celso Pastore expects a little bit more than 5% for GNP this year.

These real-time expectations, by two of the most respected economists in Sao Paulo financial market, are to be taken serious.

Lula´s administration is already doing that : off the record, Workers Party (PT)  heads dreams about going up from this year 5% to some 5,5 or 6% next (local elections) year, followed by 6 or 6,5% in 2009 and - what a wonderful world! - something like GNP growing the magic, long talked about, the percentage of 7% a year.

Wouldn´t it help people become happier on general elections in October 2010?

For now, it would be enough to assure PT a sort of third term in the Presidency, allied with newly appointed minister of Defense Nelson Jobim´s Democratic Brazilian Movement Party (PMDB).

Experienced politician, known nationaly since played key role as head of House of Representative´s Justice and Constitution Committee in 1992, Jobim became president of Supreme Court and now, as Defense minister, is doing a good job in these first days to fight the air crisis in Brazilian airports, companies and traffic control under the military.  

Keeps he on doing it - and global financial crisis really behaves like economists want it to,  without so much impact on emergent economies like Brazil - Lula will have a good night sleep in spite of the possibility of another atipical markets movements from now on.

Tokyo market has just started the da. Let´s keep an eye on it.