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Just When You Thought It Couldn't Get Worse For Brazil...
Brazil’s economy is incredible.
Just when you’re sure - and we mean sure - that it can’t possibly get any worse, or at least not materially worse in the very short-term, something else happens to further underscore the deep, dark economic malaise plaguing one of the world’s most important emerging markets.
So after last Friday’s GDP print which confirmed that the country slid into recession during Q2 - a quarter in which Brazilians suffered through the worst inflation-growth outcome in at least a decade - and after July’s budget data which confirmed that the country’s fiscal situation is, as Citi put it, “a bloody terror film,” we got a look at industrial production today and boy, oh boy was it bad. So bad in fact, that it missed even the lowest analyst expectations.
Here are some key excerpts from Goldman's breakdown:
Sharp Decline in Industrial Production in July
IP contracted by a much larger than expected -1.5% mom sa (-8.9% yoy) in July (vs. the -0.1% mom sa market consensus). Furthermore, the June print was revised down to -0.9% mom sa from the original -0.3% mom sa. During the last nine months industrial production declined at an average monthly rate of -0.9% mom sa. Of the 24 main industrial segments, 14 recorded a contraction of output in July.
IP declined 8.9% yoy in July, with the largest decline recorded in capital goods -27.8%. Overall, IP declined 6.6% yoy during January-July 2015.
IP has now contracted for eight consecutive quarters and is likely to decline again during 3Q2015.
In July, IP was 14.1% below the peak level registered in June 2013 and was at the same level as March-April 2006.
The industrial sector (which has been reducing headcount) contracted 1.1% in 2014 and we expect it to contract at a much higher rate in 2015 as it continues to face strong headwinds from high levels of inventories, record low confidence indicators, a high and rising tax burden, rising energy costs, and weak external demand (particularly from Argentina for durable goods).
Meanwhile, exports cratered 24% and critically, it wasn't all because of lower commodity prices.
CDS now at six-year wides...
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Should be a great Olympics for the Ponzi Pumping Pricks
World sprint records will be set by tourists fleeing street crime.
If they drink the water, the sprinters might "explode out of the blocks" in more ways than one.
#Immodium
pods
(Reuters) Sao Paulo- On Tuesday Jaan Van Sputum, a 52 year-old out-of-shape chainsmoking businessman from Amsterdam, was celebrating his countrymens' success in swimming at the local watering hole. Halfway through his second drink, Jaan noticed he was surrounded by angry locals. When the bartender said, "we take a kidney", Van Sputum ran a three-minute mile back to his hotel....
Hillary is coming down for a wax?
"When in Brazil..............."
Downvoted you for putting that image in my head and ruining breakfast.
Did the same.
Sorry, pods. No offense meant.
Pods, it'll take some serious tequila to get that image out of my head......
Good god man, the SMELL.
Not to worry, it will get worse here too - the land of the free is not immune from economic distress despite all the lies from Old Yeller and the corrupt, controlled financial press.
Yep, but Brazil is a lot closer to the edge of the cliff, so we get to see the splash pattern before we go over too.....
Keep in mind Brazil is still the country of the future. The future is full of incompetence, corruption and whores.
LikeI Mexico
Just like the present.
Perfect time to move all these shadow US bond purchases from Belgium to Brazil...
-Argenta
Not all bad, they still have those rumps in tight bikinis
The good news: when the Brazilian bankers and politicians has successfully destroyed their economy, we'll still get to enjoy looking at their women.
Meanwhile the Brazilian Real is getting crushed like an over-ripened acai berry under the gyrating platform shoe of an Amazonian-sized samba dancer! BRL/USD 3,75 says it all...
It is also surprising that exports have declined by so much, as noted in the article...this really demonstrates how absurdly uncompetitive Brazil is....its exports are now 50% cheaper in USD terms, yet they still can't manage to sell much outside their own country.
that's the point. You can't sell goods to a world where the global economy has collapsed and trade is at absurdly low levels. We are already there. Commodity prices have collapsed. There are NO global consumers. China is in a recession, and possibly a banking crisis. Chinese businesses are cutting back ... right, left and center. Countries that used to export to China - are on the "life support list" for their economies now.
China catches a cold and Brazil goes in to cardiac arrrest....
Now there's a tune i have not heard in a while.
There's no doubt that a chain of national bankruptcies and downgrades is coming. Brazil is on the "Critical" list, and the Venezuelan economy is already on CPR.
YES, street crime in major South American cities is going to hit epic proportions. As if Rio and Sao Paulo don't already have enough problems!!
YET IRONICALLY - the financial data coming out of Brazil are not fudged. Go figure. Anybody see a lesson there?
They still have hot women!
I think its time for many countries to wean themslves off China.
Eg Brazil, Australia and my own New Zealand.
But we must not forget that China's slow down is also caused by the world slowing down and buying less form China so they need less commodities.