Tuesday, 27 January 2009

Earlybird, Jan. 27, 2008

The headlines are:

BRAZIL -- Corporate Defaults Reached Ten-Year High (click here for link to Estado's story): Although Brazil's corporate sector is far from facing a systemic crisis, domestic bankruptcy filings soared 146 percent in 2008.In December corporate defaults jumped 36 percent in December. A major area of concern for companies and banks is the rapid deterioration in consumer creditworthiness. Personal loan default rates and the number of dishonoured cheques are soaring. This can only get worse in the first half of 2009 as job losses deepen.

BRAZIL -- Fraga is Confident that Rates Will Drop Fast (click here for Estado story): The most prominent central bank hawk is signaling that the space for rate cuts is ample. Arminio Fraga is someone who investors should always listen to.

ARGENTINA -- $23 Billion Fled the Country in 2008, Most Since 2001 When the Government Devalued the Peso (click here for link to Nacion's story) : The peso touched 3.5 to the dollar yesterday. Unfriendly policies that punish investors and give privilege to political decisions, and lack of transparency seem to be feeding the hemorrhage.

WORLD -- Nations Turn to Barter Deals to Secure Food (click here for FT story link): As trade finance dries up, poor countries are resorting to barter to buy food. One of the aspects that have made the Brazilian government very active in fighting this credit crunch in the issue of trade finance (Brazil is a major food exporter.)

U.S. -- Geithner Sworn In as Treasury Secretary (click here for WSJ story): No one would like to wear his shoes at this moment. He has a hell of a task ahead -- drafting a quick recovery plans for the financial sector, pushing for the aid package, dealing with a quick surge in joblessness that will be on for years maybe, proceeding with a few bank nationalisations if things get worse in the marketplace ...

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