Guest Notes From The Sales Desk - Can Brazil Get Its Groove Back?

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Fri, 10/21/2011 - 16:20 | 1798461 mayhem_korner
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Over the long run, do you really think the US will be able to outperform Brazil?

Innovation and entrepreneurship are mobile - the US is fast becoming an unfriendly state to both.  So "no" is the answer.

Fri, 10/21/2011 - 20:22 | 1799169 trav7777
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Brazil has a lot of lazy people and corruption.  It's why they've been the country of the future for 50 years.

Meanwhile the evil white nations just keep chugging along.

Sat, 10/22/2011 - 07:11 | 1799720 johny2
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man, you are full of shit. 

Fri, 10/21/2011 - 20:59 | 1799237 Buck Johnson
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Your correct.  Also Brazil was the next country to go to that was friendly to the west that wanted to be like the west.  So they did the same thing the West did and are cooking their own economy to become a burnt out economy.

Fri, 10/21/2011 - 16:23 | 1798471 DoChenRollingBearing
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A little O/T, but you see LOTS of Brazilian made goods in Peru.  LOTS of trucks!  Lots of transportation related goods.  Beer.  Other goods actually used by Peruvian manufacturers as well.

Fri, 10/21/2011 - 16:23 | 1798474 GeneMarchbanks
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'Yes, they are likely to have an inflation problem to deal with, particularly when the US Fed launched QE3 in earnest.'

Lets first see how that gets handled before concluding:


Perhaps that buying opportunity isn’t today, we’re still a long way away from the Great Reset.  But in a world where fiat currencies are devalued and consumers over-leveraged, it’s going to be commodity rich Brazil and their young population that will do the best on a relative basis.

Australia, Russia, Canada, Mongolia, Norway etc. these countries would also qualify as resource rich and have cheaper fiat to promote export.

Fri, 10/21/2011 - 17:34 | 1798676 topcallingtroll
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All of what you say is true but brazil has a young and growing population and little debt. None of those other countries have both.

The others you mentioned are fully valued to over valued.

Brazil appears to be undervalued based on its long term risk.

Fri, 10/21/2011 - 18:21 | 1798809 EvlTheCat
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I would like to know how much you travel, and are involved in Brazil?  To find it such a good investment.

In my opinion Brazil is a debt bomb waiting to go off.  Many people I know are overleveraged with the easy credit provided to them inorder to spurr economic growth.  On top of this the ecomonic infrastructure to pursue fraud is almost non- existant.  That may be one reason your perception of debt is so low?

It may seem like a killing field for investments, and it probably is to the unscrupulous, but long term they look like the U.S. to me.  With one big difference, Brazilians thrive on unscrupulous behavior. Can you?

Fri, 10/21/2011 - 20:26 | 1799181 trav7777
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Brazil's problem is that they are even more wealth stratified than we are.  Professionals are underpaid compared to prices and oligarchs are overpaid.  If they want to broaden their economy, they are going to have to route less money into billionaires and more into ordinary professionals. 

Additionally, brazil is hamstrung by a huge black population which does pretty much what every other black population everywhere else does.  The cities in the south such as Curitiba are vastly different in terms of HDIs and levels of corruption and crime than further north.

Brazil, instead of limiting professional and technical immigration, should be paying for it.  Bring in more white people, asians, and indians.

Fri, 10/21/2011 - 16:25 | 1798481 TheLooza
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Um.  My ashole is bleeding from today's melt-up.  Why is it so much easier to lose five figures than it is to make it?  Fucxk me.

Fri, 10/21/2011 - 17:03 | 1798591 Manthong
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I tend to look at the positive side of things.

If I lose enough, I just get to go back to using drugs, hanging around in bars and carousing with the kind of women I gave up to get to where I am now.

Fri, 10/21/2011 - 17:09 | 1798606 JohnG
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This has been the case since trading began in time immemorial.

Call it.......TUITION.

Fri, 10/21/2011 - 17:34 | 1798675 NotApplicable
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Because you're competing against the world's premiere criminal cartel with both hands tied behind your back, while blind-folded.

Meanwhile, your so-called stop-loss order is their tree-shaking target.

Personally, I find sniffing glue to be more productive.

Fri, 10/21/2011 - 20:07 | 1799139 4shzl
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Meanwhile, your so-called stop-loss order is their tree-shaking target.


Fri, 10/21/2011 - 16:33 | 1798490 BRIC-layer
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Brasil also has one major and rather unique policy plank  going for it: an active targeting of the Gini coefficient, alone among major economies. This will continue to work wonders in the medium term when allied with it's demographic advantages.

Brasil is also relatively immune to a lot of the social pressures confronting heretofore ädvanced"economies. There is an optimism and dynamics reminiscent of the US in the 1950's in a lot of the country.

Having lived through similar crises in the 1980s and 1990s, the Brasil Banking system, as well as it's participants, are far better prepared to confront any stresses from the 2008 Depression.

Fri, 10/21/2011 - 20:29 | 1799185 trav7777
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I'll agree with you on the optimism.

The problem is that social spending didn't work here and won't work there to remedy fundamental aptitude gaps between populations.

The chicks are hot and like white guys.  That's enough for me to think about moving there.

Fri, 10/21/2011 - 16:32 | 1798505 buzzsaw99
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This from someone who all they want to do is exploit Brazil to make more clownbux. who. the. fuck. cares.

Fri, 10/21/2011 - 17:24 | 1798638 topcallingtroll
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Clownbux still have value for now and owning "things" such as pieces of companies with an overweight in natural resources cant hurt, even if clownbux go the way of the dodo.

Fri, 10/21/2011 - 16:33 | 1798508 moskov
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How about USA? not only non-productive but the biggest sinkhole ever recorded in the history of mankind

Fri, 10/21/2011 - 16:49 | 1798549 Sudden Debt
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I also think we'll have to wait a pretty long time for the big reset in many countries, but not for the big meltdown. 2 years at mpst is my guess unless we get brasilian like rates above 10%

Fri, 10/21/2011 - 16:50 | 1798553 CHARLIE.DONT.SERF

Brazil's real estate market is way over heated.  According to this article the average square foot in Leblon, RJ is over $1000 while it is $354 in South Beach.  Any global shock could burst that bubble as quickly as you can say "fudeu".  

Fri, 10/21/2011 - 16:52 | 1798556 RobotTrader
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Will they?

Or won't they?

If Brazil and China announce easing measures at the same time the Eurozone comes up with a "Bazooka" plan, the meltup next week in the equity indexes could be breathtaking.

But most of you should not worry, because gold and silver will go up with it, as PM's will also benefit from the coming "Economic Boom of Epic Proportions" in 2012 - 2015.

Fri, 10/21/2011 - 17:19 | 1798625 topcallingtroll
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Wrongo robo.

If you wont be a troll I will.

Once some growth resumes and if europe manages to bring out a bazooka there will be a huge melt up.

Gold and silver may participate initially, but once fear is gone and people are convinced inflation is staying muted pm's will do well to eke out small annual gains.

High beta is the way to play this if you think there may be a melt up.

Brazil is high beta with excellent value and fundamentals. Cant get better than that long term.

Fri, 10/21/2011 - 17:13 | 1798613 topcallingtroll
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Valuations remain high?

Bullshit. EWZ has an almost seven percent yield and PE of 8.

These same fund managers are recommending Chile with a dividend yield of 1.8 percent on the main ETF. They were bullish at 76 but now are bearish at 58? Fucking idiots.

Brazil's problem is their fear of inflation and underestimation of their true growth potential. However they are lowering interest rates and high growth will resume.

The time to buy is now but dont bet the farm. Dollar cost average over the next couple of years. Hold forever. Brazil is a buy and forget investment. Check it again in ten years. The first world is japanifying. Second and third world is place to be.

Fri, 10/21/2011 - 17:24 | 1798626 Monedas
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Electing an ex-Communist Guerilla bitch as President is not my idea of good PR ! The New World Latins have the sickest, most conceited and myopic faith in Socialism ! They just don't get it and no one challenges nor ridicules them for it.....except for Monedas 2011 and a few other visionary comedians !

Fri, 10/21/2011 - 17:28 | 1798657 topcallingtroll
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There is plenty of untapped OPM to keep the socialists funded for a long time.

For the next ten years, at least, brazilian socialism and a great ROE can coexist peacefully.

Fri, 10/21/2011 - 17:35 | 1798683 NotApplicable
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Don't forget the upcoming UN taxing authority. Once that takes hold, Hell won't seem quite so bad, after all.

Fri, 10/21/2011 - 21:01 | 1799240 Monedas
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I'm really out of the loop ! What's ROE ? UN Taxing Authority ? You mean some of these "emerging" nations are going to receive taxes from other countries ? There is no end to the filthy business of Socialism ! Monedas 2011 Schweinfurt Ball Bearing Works am Main

Fri, 10/21/2011 - 18:02 | 1798763 youngman
youngman's picture

They left out corruption...and Brazil has plenty of that...and it works in a slowing economy as well as a growing economy...steal it ...its the easy way to make the millions...

Fri, 10/21/2011 - 18:10 | 1798797 spanish inquisition
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I am shocked. Once I started hearing about the Brazil investment miracle from supermodels and rap stars, I thought "Wow, skys the limit".

Fri, 10/21/2011 - 19:28 | 1799029 buzzsaw99
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when i started hearing "emerging markets" every two seconds i knew what was coming.

Fri, 10/21/2011 - 21:09 | 1799254 Monedas
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We need to use the Spanish Inquisition as a model for liquidating the Socialist filth ! We need to put a bounty on their heads....payable in PMs, por supuesto ! Monedas 2011 I volunteer for the death panel !

Fri, 10/21/2011 - 20:48 | 1799217 Monedas
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Everythings comin' up roses ! Soon Brazil's Afrikan population will exceed that of Afrika due to robust demographics in Brazil and Muslim extermination of Black Christians in Afrika ! Monedas 2011 Comedy Jihad Holocaust Hoe Down

Fri, 10/21/2011 - 22:06 | 1799318 Monedas
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In summation:  The Red Cross, Bleeding Heart Christian Charities and Hollywood Guilt Merchants provide food aid to Sub-Saharan Muslims....whose governments deny aid to starving Christians who wander the Savannah and get so weak they die or are easy to mow down ! I call it "Open Range Genocide"....minimal infrastructure required ! Monedas 2011 Comedy Jihad Cost Effective Genocide

Sat, 10/22/2011 - 21:17 | 1800890 forgetalpha
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Let's not make this complicated...


BRICS=leveraged bet on equity market rebound

Brazil = not China

Reliance upon China + Chinese RE collapse = everyone is screwed

everyone is screwed = brazil is screwed

Relative value works on a consistent basis, oh wait, that's right...never

Have fun trying to explain this bloated sales pitch to an over caffinated (among other things) HF trader...or better yet, to a HFT algo. The zeroes and ones have a great history of applying relative value arbitrage to their trading strategies right?

Also...can we please stop with this nonsense that China HAS to sell all of their US Tsys in this grand fell swoop in order to save their economy and/or screw the US....screwing over one of your top trading partners has always been a great strategy....also, if China sells all of their Tsys in response to whatever retarded scenario you assume, then the greatest trade balance in modern history would be decimated in know what happens when China sells their Tsys? The greatest tool in modern economic history for global trade dominance (otherwise known as the USD peg for RMB) will be destroyed and the RMB would appreciate at an extreme rate, simultaenously destroying China's export industry and everyones paper thin margins to begin with.

Better luck next time, Brian of Fator...I hope you and the Fator Group of companies in Brazil manage to sell this obvious  sales pitch to the fat dumb and blind investors of the world, otherwise known as retail investors and the 'responsible' financial "advisors" that represent them.

Sun, 10/23/2011 - 00:03 | 1801208 GoinFawr
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"We're all in this together kid" Harry Tuttle, Heating Engineer

Sun, 10/23/2011 - 01:09 | 1801299 Grand Supercycle
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SP500 weekly chart shows megaphone wedge and looks bullish.

Market consensus became clearer on Friday so back to the original bullish analysis and SP500 weekly chart reverts to bullish/neutral.

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