Buysiders.com » macro

Quick video, tough subject

IP — Fri, 03 Feb 2012 16:25:25 +0000

Seth Godin’s appearance in this talk show (video embedded inside) is constrained by the format: a talk show requires “controversial sound bites” and leaves little room for deep analysis of a given issue. That’s up to us, and the ideas he repeats here – “get ready for a ‘forever recession’ by reinventing yourself”, “learn by doing”, “go ahead and do it”, “take risks” – are worth considering during the weekend.

The video:

China’s future prosperity

IP — Tue, 31 Jan 2012 18:08:11 +0000

Very interesting Economist.com article on the roots of China’s success – and why China must change to achieve future prosperity. There is an interesting Case Study by Harvard Business School professor Diego Comin called “China ‘Unbalanced’” (updated very recently), which forms a very interesting base for discussing these issues. That said, the “China Unbalanced” debate is far from over, and countless arguments have been laid out for each side of the debate. Why does it matter to us? Surely, as Brazilians, because of the undeniable impact of China in our economy. But more importantly, as global citizens and asset managers, because of the uncertainty that comes from such a wide range of possible outcomes.

Free-spending Brazilians

IP — Wed, 28 Dec 2011 17:36:31 +0000

Two recent stories in US newspapers – New York Times and Wall Street Journal – highlight the huge per-capita spending of Brazilians in the US. While the Wall Street Journal piece focuses on tourists in NY and retail sales, the NYT piece focuses on Florida and also mentions Brazilians buying up real estate in the state.

The big point behind both stories: the protectionism that drives the huge taxation making imports so expensive in Brazil as to justify, in some cases, the airfare and hotel expenses.

Brazil and the future

IP — Tue, 13 Dec 2011 18:53:58 +0000

The Financial Times’ Beyond Brics blog has posted an article by PUC-Rio professor Marcio Garcia, and it’s a very sober look at what this country has been through in the years since it was included in the “BRICs” by Jim O’Neill. Much more importantly, however, is the warning about what we must still do if we are to succeed in the future. We have sounded these warning bells many times before, and we will continue to do so.

Brazil’s influence worries neighbors

IP — Tue, 08 Nov 2011 06:00:04 +0000

Brazil’s efforts to influence its Latin America neighbors are not always well-received, notes the New York Times. That by itself isn’t a problem, at least not beyond the stated and unstated strategies and goals behind such initiatives. Reaction will always occur as one group or another feels threatened/ diminished/ left behind. However, it is important to keep an eye on the trend. Much has been said about Brazil having “lessons to teach” other LatAm countries, and we have been skeptical (see previous Buysiders.com posts here, here and here) given increased government spending and intervention in the economy – alongside rising inflation. Brazil has done well, no doubt, but let’s keep our minds open to our own problems before we try to “export solutions”.

Brazilian credit and Chinese cars

IP — Tue, 01 Nov 2011 18:58:43 +0000

Three recent Financial Times stories with one theme in common: the rise of the middle class and the availability of credit. Looking at banks or diversified financials top-down is not our specialty and, as we’ve said in our Q3 2011 report published yesterday, “is only of interest to us in order to gauge an important part of the risks”. Keeping this in mind, one of the articles is bullish and points to recent reports showing that credit here has actually accelerated in September, despite talks of banks – and financial authorities – reining in loan growth. It also mentions that property prices are still increasing in double digits in larger cities. The other two articles are also bullish but still reflect, in a way, the difficulties of sustaining such growth.

The first one describes Chinese car manufacturer JAC Motors’ amazing success story in entering Brazil from scratch, using cheap yet “complete” cars appealing to a middle class perhaps in search of a first car. Yet this story is at risk because of a sudden and relatively targeted regulation change – a change that has other Asian factories formally protesting it with the WTO (World Trade Organization).

The second article describes HSBC’s sale of its large consumer financing operation in Brazil, Losango. While the main motivation for the sale is certainly a CEO-led restructuring that has HSBC shedding assets and laying off tens of thousands globally, it doesn’t hurt that delinquencies are on the rise.

California nightmare

IP — Thu, 13 Oct 2011 22:58:17 +0000

After depicting both sides of the Eurozone crisis – Greece on the one hand and Germany on the other – Michael Lewis now turns his attention to the USA and to where he might find trouble. That he does, and plenty of it, in California.

Our usual cautionary notes – about great writers sometimes skimping over a bit too much evidence for the sake of an argument – apply.

Brazilian diplomacy

IP — Thu, 22 Sep 2011 19:13:49 +0000

Two very public comments by high-level Brazilian authorities regarding currency wars: one by the highest possible authority – our President herself, in an editorial piece in the Financial Times. Another in the form of comments by our finance minister, Guido Mantega. Regardless of what one thinks about the global financial crisis and the state of macroeconomic policies each country should follow amidst the turmoil, it’s hard to see what diplomatic, political or practical gains could be achieved through this kind of rhetoric via the global press vehicles.

The “risk-free” conundrum

IP — Thu, 08 Sep 2011 02:37:45 +0000

We thought we had stumbled upon an older article when we saw this piece in the Financial Times a few days ago: “Get used to world without a risk-free rate“. After all, we had published a Financial Times video in July pretty much on the same subject and using the same arguments, and even posted an update published a few days later – but yes, we assure you it’s a new article altogether. Given the timeless importance of the subject, let this be an excuse to bring it back to our attention.

Update on Buffett’s tax article

IP — Wed, 24 Aug 2011 12:00:31 +0000

As per our post on Monday, Buffett’s article on taxing the mega-rich caused a wave of reactions – favorable, negative and the personal-attack type. Since then he went to Charlie Rose and discussed the article – and the deficit debate – for +50 minutes in this video interview. There were at least three new strong reactions against the article as well: one by former American Express Chairman and CEO Harvey Golub (Berkshire has owned AXP stock for quite some time), one at Institutional Investor magazine citing “prominent hedge fund managers” supposedly irritated by the article, and another by Weekly Standard’s Chris Caldwell in the Financial Times.