Monday, 15 December 2008

Earlybird, Dec. 15, 2008

Headlines for Dec. 15, 2008:

U.S. -- Bush Denies Imminent Auto Aid Package: (Reuters) Stock markets and the dollar will feel the pinch of this no-imminent aid package. The fate of the Big 
Three remains undecided and with that, the luck of stock investors that had recouped part of their losses in a ten-day rally that died last Friday.

CHINA -- Manufacturing Grows at Slowest Pace Since 1999: (Bloomberg) If China sneezes, the world is likely to catch a cold. The result will add pressure on the Chinese central bank to cut interest rates again before year-end.

BRAZIL -- Lula is Sure Consumers Will Shrug Off Confidence Crisis, Resume Purchases: (Estado) Morgan Stanley analysts are predicting that Brazil will fall into recession at the start of the year -- if it didn't during the fourth quarter. Lula is moving quite fast to avert more job losses and a paralysis of production across the board. He will hardly succeed.

ECUADOR -- Correa May Formally Skip Bond Payment Today: (Comercio) The aim of President Correa is to force bondholders to accept an Argentina-like restructuring that allows him to recognise just a small fraction of what the country owes to bondholders. As oil plunges and aid from Venezuela fizzles, he will have not so much space to succeed.

ARGENTINA -- Fernandez to Announce 71 Billion Peso Investment Plan: (La Nacion) Argentina is implementing a similar strategy to Brazil's, that is, subsidising consumer credit and investing heavily in infrastructure to ensure growth remains in pace. A Latin revival of Keynes, but obviously, with the political taint included. The recent confiscation of the private pension funds is giving her administration additional gas to keep boosting spending. the problem is, when Argentines realise that their savings were seized to pursue populist goals, will they stay home quiet and happy? 

U.S. -- Madoff Avoided Controls Until Ponzi Scheme Burst: (Bloomberg) This is the next news in the Madoff saga. The former NASD executive avoided almost any control from regulators, casting doubts over the SEC's ability to regulate the U.S. financial markets. In another development, Banco Santander SA -- which had eluded the subprime meltdown thanks to its no-greed policy of not investing in this type of obscure securities, -- unveiled exposure of $3 billion to Madoff's firm. The Spanish lender isn't immune to greed, it seems.

ASIA -- Avian Flu Threat Resurfaces: (WSJ) On one hand, this might be good news for poultry exporters in Brazil, like Sadia and Perdigao. On the other, this only adds more tension in an already challenging moment for the region's economy.

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