Brazilian bottom falling out - How low will it go?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Why is this man screaming?
"Certainly puts Japan's 9 year economic collapse in perspective doesn't it [$3,000,000,000,000.00], having to deal with a Savings and Loan bailout every single year for a decade. And in the rounding up the usual suspects category, it was also reported that Japan's central bank seems to have a corruption problem. We are SHOCKED-SHOCKED-SHOCKED. Really we are. This would be like accusing the Federal Reserve of manipulating the stock market."
Looks like the Crash Avoidance Team is busy with the Boys from Brazil this week. Wonder what next month will bring...
-- a (firstname.lastname@example.org), January 14, 1999
Hi a, I'm worried about the ripple effect of the Brazilian devaluation too; thanks for keeping an eye on it. Here's what was on the business page of the London Evening Standard tonight:
Brazil rebound calms the City
BRAZILIAN markets rebounded today, bringing relief to the City following yesterday's (pound sign)50 billion stock market slump, writes Ben Leapman. [About US$75 billion.)
The local currency, the real, stayed just inside its new official limits following yesterday's 8% devaluation. Government bonds began to bounce back in Brazil, Argentina and Mexico while the Bovespa share index in Brazil gained 3% after diving 18% in three days.
In London, the FT-SE 100 index jumped 59 points to 5909.1 after losing 183.5 points yesterday. The US dollar recovered some losses. Paul Chertkow at Bank of Tokyo-Mitsubishi warned that history showed an 8% devaluation would not satisfy the markets or allow Brazil's punishingly high interest rates to come down.
Last info I saw re Brazil's interest rates showed 50%. Ouch! Note the warning in the last sentence--the rebound may not last.
-- Old Git (email@example.com), January 14, 1999.
The rally didn't last long. From the BBC tonight:
A further plunge in Brazilian shares has sent Wall Street sharply lower for the second day in a row.
In late Thursday trading on the Sao Paolo stock exchange was halted for the second time in two days after the leading Bovespa index shed 10% of its value.
New York's Dow Jones index fell sharply in sympathy as traders watched the opening prosecution remarks in the Senate impeachment trial of President Clinton.
At 1910 GMT, the Dow was down 212 points or 2.2% at 9,237.
The Brazil sell-off
On Wednesday, investors had embarked on a wave of selling, fearing that Latin America could fall into a prolonged recession - which would have dire consequences for the world economy.
Brazil's decision to devalue its currency triggered predictions that last year's currency crisis in Asia was entering a new and perhaps more dangerous phase.
Merrill Lynch Chief Economist Bruce Steinberg said: "Brazil's problems probably usher in a new round of global contagion.
"Most of Latin America will now fall into recession, there could be spillover effects into other emerging markets and questions have to be raised about U.S. and European growth and earnings prospects."
The sell-off was sparked by the devaluation of Brazil's currency, the resignation of Gustavo Franco, Governor of the country's central bank, and a massive flow of capital out of Brazil.
Brazil's economy has seen $1bn per day fleeing the country, although Wednesday's figures was smaller than expected - only $1.09bn instead of $1.5bn.
-- Old Git (firstname.lastname@example.org), January 14, 1999.
Gee, a, do you think the other South American companies will have the money to dismantle their oil refineries to find the little bad boy chips lurking there? I sure feel confident about our oil supply. What's the best way to store gasoline, besides a drum?
-- jhollander (email@example.com), January 14, 1999.
Nah.....I'd say a drum is the best instrument for storing gasoline in.
Clarinets and oboes and flutes have too many holes that you have to plug up first.
Pianos are quite large, but often the gas seeps between the keys and all in all makes it nearly impossible to smoke safely whilst you play.
And of course, the most useless instrument for gasoline storage would have to be the triangle.
-- Craig (firstname.lastname@example.org), January 14, 1999.
For about $30,000 you can have a gas tank installed on your property, but it's too late for you to have that done now, and you may not be able to have it done in the first place. You must comply, comply and comply with all government regulations. They have us by the balls!
-- ~~!! (~~(!!@~~.com)), January 14, 1999.
Craig- good one ;)
-- Leo (email@example.com), January 14, 1999.
The world desperately needs yuppies and it just lost a whole lot of Asian and Brazilian yuppies," says EDWARD YARDENI of DEUTSCHE BANK SECURITIES. "The only thing between global depression is the American consumer. Thank god we were born to shop. [But] if Latin America and Asia depress U.S. corporate profits and bring stocks down to planet Earth, then we'll all be in trouble." ("The Washington Post", 1/14)
Think about it. ww
-- WAYNE WITCHER (WWITCHER@MVTEL.NET), January 14, 1999.
"What's the best way to store gasoline, besides a drum?" If you're serious... My family recently got a great deal on a 400 gallon tank (less than $500). They were even going to paint it red for free. Let's just say that we have a different color scheme in mind. It's not too late to get that kind of stuff, but it will be soon.
-- d (firstname.lastname@example.org), January 14, 1999.
Take a really hard look at the 1-day charts of your selected US Stock Index (your chioce!) for the last two days and watch today (fri). If you don't see the "fine Italian hand" of the Plunge Prevention Team in there ..........
I would NOT want to be on this team now for ANY money. The stress would be incredible. As would the hours, and the need to surf the ticker and make truly split second decisions. Now, the intelectual challenge of steering the funds through the various stocks so as to make sure that we do NOT see a precipitate drop, and to unwind those positions the next day, or later would be REALLY NEAT. After all, you're playing with the house's money, and there's a big truck on the way down the road with a LOT more chips......
-- Chuck, night driver (email@example.com), January 15, 1999.
A little humor from a cartoon in the op-ed section of my city's newspaper.
TV news announcer: "The world's eighth largest economy suffered a severe jolt today...
Husband, just walking in the room: "Brazil?"
Wife: "Michael Jordan..."
-- Kevin (firstname.lastname@example.org), January 15, 1999.