Tuesday, 13 January 2009

Earlybird, Jan. 13, 2008

News headlines for Tue., Jan. 12:

MARKETS -- Bankruptcy Financing Costs Seen Skyrocketing (Reuters): Excellent story by Reuters, that goes straight at the core of second-round problems in the current crisis. It will be costlier than ever, Reuters says, for companies to obtain financing and keep operating during bankruptcy proceedings. ''Restructuring experts say the financing markets have been exceedingly difficult to navigate.´´ Jesus ... what a crisis! you cannot even die -- your death costs your family more than keeping you alive!

BRAZIL -- Bradesco Names Trabucco as Successor to CEO Marcio Cypriano (Valor): The bank is in a process of succession that allowed Marcio Cypriano to take over from Lazaro Brandão almost a decade ago. Luiz Carlos Trabucco is the mastermind behind the growth in the insurance unit of Bradesco -- the largest in Latin America these days. His challenge is to grow organically or through acquisitions in a market where consolidation is expensive and tricky.

BRAZIL -- Pension Funds Lost More Than $10 Billion in Market Rout (Estado): The business group representing pension funds estimated that average returns in the industry were close to 3 percent negative. Savers are a bit poorer -- following four years of irrational exuberance. The thing to fear is that the Brazilian small investor loses faith in capital markets and decides to, like Colombians, pour their money into less orthodox investment alternatives -- like pyramids. One aspect that market people ought to worry during a crisis of this proportions (and they usually don't do) is the impact that losses have on citizen's perception about market institutions.

BRAZIL -- Real is Most Volatile Currency Among Sample of 48 Currencies (Folha): Good news for those who love currency volatility. The real fluctuated 48 percent from peak to trough in the past three months. ''It's like an electrocardiogram,´´ said the analyst responsible for the study.

COLOMBIA -- Pyramid Scheme Company Raised Illegally More Than $200 Million (Tiempo): In another episode of regulatory failure, prosecutors found by accident that Costa Caribe, a pyramid company based in a town close to capital city Bogota, raised more than $200 million from a little less than 20,000 investors. If this scandal doesn't hit President Alvaro Uribe's image, well, he is simply unbeatable.

U.S. -- Bush Asks for Rest of Bailout Money; Congress Somehow Resists Pressure (WSJ): I guess Congress members are right. Why do American taxpayers have to keep wasting their money to save a financial system that is simply taking too long to clean up its balance sheets? Citigroup Inc. shares dropped yesterday more than 17 percent on concern losses exceeded $10 billion in the fourth quarter. I mean, what is this Citigroup CEO Vikram Pandit still doing there? That bank should be taken over and its assets broken up -- the same way those three banks did with ABN Amro of the Netherlands last year.

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