TheEconomist

Senator Renan Calheiros, president of Brazil´s Federal Senate and of the National Congress, will probably loose his mandate as senator by the State of Alagoas, under charges of corruption acts discovered after the accusation of pension payments to jornalist Monica Veloso, mother of Renan 4 year old daughter.

The senator is still married to Veronica Calheiros.

As a distinguished member of the strong PMDB (Party of the Brazilian Democratic Movement), who defeated the military rule in 1985 and now is allied to president Luis Inacio Lula da Silva´s Workers PArty (PT).

Lula tried to save his friend and may still have success in doing so tru the majority Government coalition has in Senate.

But the charges were so evident and the scandal lasted so long that Lula told people to let it go and try to solve the crisis as soon as possible because he - and the country - needs Senate being full opeational.

Senate has been paralized for the last quarter by Renan´s struggle to keep his job anyway.

It looks he won´t succeed and will have the same fate of former president Fernando Collor, also from Alagoas state, who resigned and lost his political rights for eight years under charges of corruption.

Last year Collor was elected senator after the 8-year period of punishment, but his role now is so ofuscated by his past that he decided to take a 4-months vacation, starting last week.

The main reason: not to be obliged to vote in Renan´s impeachment next week.

On the economic front, it´s expected for tonight the Central Bank announce about the basic interest rate, which the market wants to be cutted by 0,25 percent points.

Sao Paulo and Rio stock markets are on red now, following Dow Jones after bad news in US house financing market.

Dollar is woth R$ 1,94 which means everything is normal in Brazil at this moment.

Finance Minister Guido Mantega gave in Brasilia a few cues to the decision Central Bank´s monetary policy committee (copom) is taking at this exact moment on what to do with basic intereste rates in Brazil.

We are divided: most os our economists were betting on a hardstop on rates falling curves planned before.

Even they stop it tomorrow, decidion is annouced, it would be simply a break to breath and unerstand better what the hell is going on in Uncle´s Sam banks…

Central BC committe was working for many months to give a help to economic growth, in order to make sure Brazil´s GDP would keep on a sustained goodwill path starting from something more than 5% in 2007, 6% in 2087 (municipal elections in Oct 5th), 6,5% 2009 and the magic 7% exactly in presidential elections year!

Now, no-payers in the States are shaking things around the overfinacerized global capitalism.
There is an spectre rounding not only Europe like in 19th century but the wole blogal village now.

Woukd there be a recession in the States, following the present credit crisis in the mortgage system spreading sub-porimes roten papers around banks all over.

Is there gonna be a world recession?

We don´t think so, but you better take your precautions… like not believing anibody, not even the economist next door.

Or next blog.

I say there won´t be a recession, but an adjustment all over the globalized economies.

It´s ridiculous to expect that a people like the Americans, modern Romans leading manking to the stars, has won all the batlles against all the socioeconomic engeneering challenges, to begin with American Revolution and going over The Great Depression and…

Well, I know very well the Amnericans, my son is one of them. I´ve been covering Insternational Monetary Fund (IM) annual meetings for over two decades.

As a Finance minsiter´s press officer during the Real Plan implantion and consolidation, I got insede the monster - it´s nice the building from inside, the general-manager rooms, the women around… well-dressed female PhDs

I used to jave a fried there, who´s retired now, that introduced me to the  IMF building at 19th street undergrounds - it´s sort of mindblowing, my friends from Berkeley would say.

At a time, around the end of 1998, I even accepted to participate of the Brazilian small delegation headed by Finance Minister Pedro Malan - well, I thought I still was a Marxist, but I also had to help the nation overcome the foreing crisis and we´ve got to save the new and stable Real…

After IMF agreement in 1998 we decidend to leave the Executive. In early 199 we quited Government, toghether with Gustavo Franco, replaced by Henrique Meirelles at Banco Central (where companheiro Lula kept him up to now).

Read all that, then you already know what I think about tomorrow´s annouce by Brazilian Central Bank´s monetary policy committe - don´t you?

All my friends on the economic midia sage believe the  basic interest rates (selic rates) will b cutted by 0,25% only (modifying the downward trend followed in the last  months to get advantage of good fundamentals.

Market operators expected a cut by 0.5% before the mortgange crisis in the US.

May I tell you my game?

They won´t do anything but stay where they are: watching tv to see what´s going on around with the US and European banks, the credit and, last but not least, inflation expctations outside and specially inside Brazil.

Finance Minister Guido Mantega said we´re going tru some consumer pressure on prices. “I don´t see any major inflation pressures, but consumer is high at this moment, whic is good”, he saida few hours ago.

To good unerderstanders, half a word is enough.

I´d keep basic rates where they are,  for two more weeks or so  -  and then see what happens,  wait to see what goes on with inflation and economic growth at home.