Friday, 6 February 2009

Tú, Coutinho? Tú Tambêm? These Guys Are a Joke ...

Coutinho: In a few days he will be saying that he was
misunderstood, that he didn't quite mean to say
what he said ... you know what I mean, right?

Read this. This is simply unbelievable. As one source says, this ranks first for joke of the week. The story is ''courtesy´´ of Bloomberg News ...

WTO Claims That Brazil Subsidizes Loans ‘Unfounded,’ BNDES Says

Feb. 6 (Bloomberg) -- World Trade Organization claims that the Brazilian government subsidizes companies by offering loans at less than the benchmark interest rate are “unfounded,” the state-development bank’s president said.

The cost of borrowing from the government-owned lender, known as BNDES, is higher than rates on similar loans in rich nations, bank President Luciano Coutinho told reporters today in Sao Paulo.

Fála sério!
What does this borrowing-costs-in-developed-countries argument has to do with the fact that Brazil is facilitating loans at below-market rates to companies in exchange for political perks or favours? Gimme a break ...

Luciano, correct me if I'm wrong: Lending rates in developed economies are smaller than those in Brazil because the former have a decent record of creditworthiness, or pursued orderly fiscal policies for decades or were somehow friendly to businesses. Borrowing costs in those countries probably reflect a small probability that consumers and companies are likely to default on their obligations. The cost of credit in those nations, not in Brazil obviously, represent risk perception, so the lower the rate, the smaller the perception of risk. Anyways, ... Brazil's cheap BNDES loans are a dumping-like practice and someone must help abolish them.

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