Brutal news is pouring in from pretty much everywhere.
US retail sales are flat and wholesale prices are falling. Big retail chains are missing on earnings and seeing their shares plunge.
Chinese nonperforming loans are soaring while imports, car sales and steel production are way down. Continue reading »
Brazil’s economic recession is likely to be deeper and longer than Fitch’s earlier expectations and its performance has diverged materially from those of its rating peers. Medium-term prospects also look weak compared to peers and most other large emerging markets. Fitch forecasts that Brazil’s economy will contract by 3% and 1%, respectively in 2015 and 2016 before recording modest growth in 2017, with risks skewed largely to the downside.
Brazil, which is caught in a vicious recessionary spiral which is only set to get much worse before it gets better, tried to obtain some much needed cash when earlier today it conducted an auction to sell exploration rights for of its oil and gas. It was, in short, a disaster. According to Reuters, by midday Brazil had only sold 17 of 119 blocks offered. A total of 36 companies from 17 countries – including Petrobras, ExxonMobil Corp, BP Plc and Royal Dutch Shell Plc – registered for the auction. None of the majors have bid so far. Only a handful of sold blocks were even contested.
H/t reader M.G.:
“See what happens when foreign greedy guts down grade your bonds to junk? They get austerity measures passed, even by a relatively humane leadership……
They did keep transaction taxes passed, such as we ought to have in the US….”
– “Junked” Brazil Is Falling Apart At The Seams; Cancels Bond Auction (ZeroHedge, Sep 10, 2015):
Exactly one month ago, in the aftermath of the Chinese devaluation announcement, we made a simple prediction. “Biggest immediate loser from China’s devaluation: Brazil” Today, following the overdue, long anticipated, and yet “shocking” downgrade of Brazil by the S&P to junk, this prediction is coming true.
– Brazil Cut To Junk By S&P, ETF Falls 5% Post-Mkt (ZeroHedge, Sep 9, 2015):
Brazil, whose economy officially slid into recession in Q2 – a quarter during which Brazilians suffered through the worst inflation-growth outcome (i.e. stagflation) in over a decade – and whose efforts to plug a yawning budget gap are complicated by political infighting and a growing public outcry against embattled President Dilma Rousseff, has been cut to junk by S&P.
Published on Sep 6, 2015
The $100 billion BRICS Contingent Reserve Arrangement (CRA) has become fully operational following the inaugural meetings of the BRICS CRA Board of Governors and the Standing Committee in the Turkish capital of Ankara.
Continue reading »
After last Friday’s GDP print which confirmed that Brazil 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 a veritable nightmare, 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 estimate.
“China, Australia, Brazil, Canada, Sweden – it is beyond us how anyone can declare the crisis isn’t spreading. Be prepared – there are going to be lots of opportunities to both make and lose money. But first, you have to recognize what is happening.”
– The Crisis Is Spreading: China, Australia, Brazil, Canada, Sweden… (ZeroHedge, Aug 15, 2015):
Earlier today, we posted an excerpt from IceCap Asset Management’s latest letter to investors focusing on the farce that is the Greek bailout #3, which can be summarized simply by the following table…
… and Keith Dicker’s assessment which was that “for Greece, it’s mathematically impossible to repay its debt” and that the Greek “economy continues to plummet to deeper depths and is now -33% less than where it was in 2008.”
But the truth is that for all the endless drama, Dicker continues, “the Greek debt crisis isn’t THE crisis. Rather it is simply a symptom of a much larger global debt crisis.” Continue reading »
– Brazil’s President Dilma Rousseff Approval Rating Crashes To 8% – Worst Since Military Dictatorship (ZeroHedge, Aug 10, 2015):
With the economy imploding, currency collapsing, and credit risk soaring, it is perhaps no surprise that just under a year since she was re-elected, Brazil’s President Dilma Rousseff is now Brazil’s most unpopular democratically elected president since a military dictatorship ended in 1985, with an approval rating of just 8%. In a recent poll, 71% said they disapprove of the way Rousseff is doing her job… and two-thirds would like to see her impeached.
Via The Digital Journal,
Dilma Rousseff is now Brazil’s most unpopular democratically elected president since a military dictatorship ended in 1985, says a poll out Thursday that put her approval rating at eight percent. Continue reading »
– Is This Country Latin America’s Next “Argentina” (ZeroHedge, Aug 6, 2015):
Today, following another spike in negative news, it appears that the credit markets have finally woken up, and a quick look at Brazil’s CDS shows that following today’s spike to 314bps, the country’s implied default risk is back to levels last seen in April of 2009! We expect more credit market participants to notice the depressionary developments in brazil, and as the country’s CDS continue to blow out, many will start asking themselves: is Brazil the next Argentina?
– BRICS Bank Officially Launches As Sun Sets On US Hegemony (ZeroHedge, July 8, 2015):
The long-awaited BRICS bank has officially launched, marking yet another milestone on the road to global de-dollarization and lending further credence to the notion that the sun is finally setting on the US-dominated multilateral institutions that have defined the post-war world and served to underwrite six decades of dollar dominance.
– China ratifies the creation of BRICS bank (RT, July 1, 2015):
The Chinese Parliament has ratified the creation of the BRICS Development Bank. The New Development Bank was conceived as an alternative to Western financial institutions such as the World Bank.
The new bank will provide money for infrastructure and development projects in BRICS countries, that is Brazil, Russia, India, China and South Africa. Each nation will have an equal say in the bank’s management, regardless of GDP size.
Each BRICS member is expected to contribute an equal share in establishing a startup capital of $50 billion, with a goal of reaching $100 billion in capitalization. The BRICS bank will be headquartered in Shanghai, with India presiding as president during the first year, and Russia serving as the chairman of the representatives. Continue reading »
– BRICS starts examining SWIFT alternative (RT, June 17, 2015):
The BRICS members have kicked off consultations on an alternative to the global SWIFT system that processes about 1.8 billion financial messages annually, said Russian Deputy Foreign Minister Sergey Ryabkov.
The BRICS system for the transmission of financial information is expected to protect the member countries from any possible disruptions, and provide better security.
“The finance ministers and executives of the BRICS central banks are negotiating … setting up payment systems and moving on to settlements in national currencies. SWIFT or not, in any case we’re talking about … a transnational multilateral payment system that would provide greater independence, would create a definite guarantee for[BRICS – ed.]countries on risks associated with arbitrary decisions …made by countries that have current payment systems under their jurisdiction,”Russian Deputy Foreign Minister Sergey Ryabkov told RIA in an interview published Wednesday. Continue reading »
– Brazil Retail Sales Drop Most On Record, Goldman Warns Will Get Worse (ZeroHedge, June 16, 2015):
Just a few months ago, we warned Brazil’s economy was on the verge of collapse as the fiscal situation was deteriorating rapidly. It appears, judging by the most recent data from the oil-rich nation, that we were right. Broad retail sales have now declined for five consecutive months with the seasonally adjusted broad retail sales index now at the same level as early 2012. Core retail sales declined 3.5% YoY during April (weakest print since Aug 2003) and broad retail sales declined by an even larger 8.5% YoY (lowest on record), and as Goldman warns, the outlook for private consumption and retail sales in the near term remains very weak.
– China Becomes Global Lender Of Last Resort With Bailout Of World’s Most Indebted Oil Company (ZeroHedge, April 2, 2015):
Over the course of last month we variously described the Asian Infrastructure Investment Bank as an attempt by Beijing to deal a decisive blow to the post-World War II global economic order by undermining US-dominated multinational institutions, as an attempt to usher in a new era characterized by yuan hegemony, and as an effort to cement China’s regional influence via the implicit establishment of a sino-Monroe Doctrine.
With that in mind, we find it somewhat ironic that the China Development Bank (which isn’t the same as the AIIB but which we think might offer some clues as the how the new venture will be run under Beijing’s control), is set to provide $3.5 billion in financing to Brazil’s deeply indebted Petrobras. The new funding comes 6 years after a $10 billion oil export deal between the company and China and just days after Brazil signed up as a founding member of the AIIB. Continue reading »
– It’s Happening – More US Allies Join The Anti-Dollar Alliance (Sovereign Man, March 18, 2015):
The United States government just went from “Please, baby, don’t leave me,” to frustrated threats and whining.
After the UK announced it will join new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member late last week, Germany, France and Italy decided yesterday to follow Britain’s lead and join as well.
Welcome to the beginning of the end of the US dollar’s domination. It’s happening.
For the past few decades America was the undisputed global economic and political superpower.
The entire world happily used the US dollar, and hence, the US banking system. More importantly, the world happily placed its trust in the US government.
But there’s a limit to how irresponsible, reckless, and threatening you can be. Eventually such behavior catches up to you.
That time has now come. Continue reading »
– Thousands Crowd Brazil’s Streets: Demand Military Intervention & Rousseff Resignation, Impeachment (ZeroHedge, March 15, 2015):
It appears the ‘people’ are growing more and more dissatisfied with their corrupt and greedy leaders across the world. As we noted recently, Brazil’s economy is imploding, consumer sentiment is at record lows, and with the Petrobras scandal providing a glimpse at just how deep the corruption might go, Brazilians are revolting. Hundreds of thousands are crowding the streets in several regional Brazilian capitals, dominated ironically by the middle and upper classes. Demands for “Dilma Out” and “Impeach Dilma” are also interspersed with calls for a quasi-coup and “military intervention.“
Hundreds of thousands of people protested today against Brazilian President Dilma Rousseff , in Rio de Janeiro, within a day of demonstrations in dozens of cities across the country. Continue reading »
– Brazilian Farmers Occupy and Cancel Approval Meeting for GMO Trees (Sustainable Pulse, March 5, 2015):
300 farmers have taken over the building where Brazil’s GMO regulator CTNBio was meeting Thursday to decide about whether to approve GE eucalyptus trees. The meeting was cancelled.
Also Thursday, 1,000 women took over operations of FuturaGene across Brazil. The action included the destruction of all GE eucalyptus seedlings. About 1,000 women of the MST occupied the Suzano company (parent corporation to GE tree company FuturaGene) in Itapetininga, Sao Paulo, Brazil. Continue reading »
(L-R) Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, Chinese President Xi Jinping and South African President Jacob Zuma join their hands at a group photo session during the 6th BRICS summit in Fortaleza July 15, 2014. (Reuters/Nacho Doce)
– Russia ratifies $100bn BRICS New Development Bank (RT, Feb 20, 2015):
The Russian State Duma has ratified the $100 billion BRICS bank that’ll serve as a pool of money for infrastructure projects in Russia, Brazil, India, China and South Africa, and challenge the dominance of the Western-led World Bank and the IMF.
The New Development Bank is expected to start fully functioning by the end of 2015, according to the Russian Finance Ministry. Continue reading »
– The Mexican Peso & Brazilian Real Are Collapsing (ZeroHedge, Jan 30, 2015):
Back over 15 / USD for the first time since March 2009, the Mexican Peso is tumbling hard this morning… and the Brazilian Real is also tanking (back near 10-year lows) – no clear catalyst aside from further weakness in oil producer and EM FX sentiment.
– Brazil’s Economy Is On The Verge Of Total Collapse (ZeroHedge, Jan 30, 2015):
Back when the BRICs were the source of marginal global growth, the punditry couldn’t stop praising them. However, in the past year, now that China’s housing bubble has burst and its shadow banking system has imploded, those who remember what BRIC actually stood for are about as rare as those who recall what it means for the Fed to hike rates. Which is precisely why nobody in the mainstream financial media has commented on the absolutely abysmal economic update reported earlier today out Brazil.
We are happy to do so because today’s data follows up quite well to our article from a month ago “Brazil’s Economy Just Imploded” and as the earlier article on the crashing Brazilian Real hinted, things for the Brazilian economy how gone from imploding to, well, worse because not only did the twin fiscal and current account deficits rise even more, hitting a whopping 11% of GDP – the worst since August 1999, but its government debt soared to 63.4% in 2014, up from 56.7% a year ago, and the highest since at least 2006. In short – the entire economy is now on the verge of total collapse. Continue reading »
– Brazil’s Economy Just Imploded (ZeroHedge, Dec 29, 2014):
China may have mastered the art of fabricating economic data to a level unmatched by anyone except the US Department of Labor, but its derivative countries have much to learn. And none other more so than one of China’s favorite sources of commodities over the past decade: Brazil. It is here that things are going from worse to catastrophic, as disclosed in today’s update of Brazil’s fiscal picture.
Here are the disturbing facts showing that behind the world’s propaganda growth facade, it is all hollow: Brazil’s consolidated public sector primary fiscal balance, which posted a significantly worse than expected R$8.1bn primary deficit in November driven by the R$6.7bn deficit of the Central Government, dipped into negative territory: -0.18% of GDP, driven by the significant deterioration of the Central Government finances.
– China’s Stocks Worth 50% More Than Rest Of BRICS Combined (ZeroHedge, Dec 19, 2014):
Thanks to the massive surge of speculative trading account openings, Chinese stocks are up 28% in the last month and a stunning 52% since China unleashed ‘QE-Lite’. This has sent the total market capitalization of China’s stocks soaring relative to the rest of the BRICS. In fact, Chinese stocks are now worth 55% more than Brazil, Russia, India, and South Africa combined… the most ever.