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View Poll Results: Do you think there will be a recession in 2007?
Yes for sure. A recession is looming. 11 10.89%
It is a toss. 23 22.77%
No recession in sight. 39 38.61%
I am not informed enough to say one way or the other 28 27.72%
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Re: Another indicator shows recession
Old 01-09-2007, 12:50 PM   #21
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Re: Another indicator shows recession

Quote:
Originally Posted by brewer12345
RM, the real question in my mind is how closely the rest of the world will follow the US economy in the next slowdown (whenever it arrives). Hard to tell if the BRIC countries are better insulated this time around or not.
Brazil (the B on BRIC) certainly is not. A massive outflux of capital would be quite crippling, since the government uses foreign investment to finace its MASSIVE budget overruns. Brazil already has some of the highest interest rates int he world, and a massive capital flight would force interest rates even higher.
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Re: Another indicator shows recession
Old 01-09-2007, 01:14 PM   #22
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Re: Another indicator shows recession

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Originally Posted by camberiu
Brazil (the B on BRIC) certainly is not. A massive outflux of capital would be quite crippling, since the government uses foreign investment to finace its MASSIVE budget overruns. Brazil already has some of the highest interest rates int he world, and a massive capital flight would force interest rates even higher.
Uhuh, but where is most of the external capital coming from? Private citizens within Brazil? US (unlikely)? China? Makes a big difference in what a US economic slowdown woud mean.
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Re: Another indicator shows recession
Old 01-09-2007, 01:30 PM   #23
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Re: Another indicator shows recession

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Originally Posted by brewer12345
Uhuh, but where is most of the external capital coming from? Private citizens within Brazil? US (unlikely)? China? Makes a big difference in what a US economic slowdown woud mean.
Mostly US. Lots of money from US investors to capitalize on the very high interests (17% APR) on the MM accounts.
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Re: Another indicator shows recession
Old 01-09-2007, 01:31 PM   #24
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Re: Another indicator shows recession


Mostly US. Lots of money from US investors to capitalize on the very high interests (17% APR) on the MM accounts. That is why the Real (Brazilian currency) is so over appreciated right now.
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Re: Another indicator shows recession
Old 01-09-2007, 01:32 PM   #25
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Re: Another indicator shows recession

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Mostly US. Lots of money from US investors to capitalize on the very high interests (17% APR) on the MM accounts.
Link?

Not being a pedant, just genuinely curious.
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Re: Another indicator shows recession
Old 01-09-2007, 01:40 PM   #26
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Re: Another indicator shows recession

Quote:
Originally Posted by brewer12345
Link?

Not being a pedant, just genuinely curious.
If you can read portuguese, see the document straing from Brazil's largest bank (Banco do Brasil). Please see page 8.

http://www.bb.com.br/portal/dwn/fnd/dem04061548.pdf
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Re: Another indicator shows recession
Old 01-09-2007, 01:49 PM   #27
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Re: Another indicator shows recession

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Originally Posted by camberiu
If you can read portuguese, see the document straing from Brazil's largest bank (Banco do Brasil). Please see page 8.

http://www.bb.com.br/portal/dwn/fnd/dem04061548.pdf
Yes, and I can fly a table to the moon, too. Oh well.
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Re: Another indicator shows recession
Old 01-09-2007, 02:02 PM   #28
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Re: Another indicator shows recession

Maybe this will help:

http://www.bloomberg.com/apps/news?p...P7Y&refer=news
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Re: Another indicator shows recession
Old 01-09-2007, 02:14 PM   #29
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Re: Another indicator shows recession

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Hmmm, they quote someone talking about trade surplusses, which suggests that the Brazilian gummint may be dependent on brrowing, but the economy as a whole is not.
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Re: Another indicator shows recession
Old 01-09-2007, 02:23 PM   #30
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Re: Another indicator shows recession

Quote:
Originally Posted by brewer12345
Hmmm, they quote someone talking about trade surplusses, which suggests that the Brazilian gummint may be dependent on brrowing, but the economy as a whole is not.
As a Brazilian myself, I wish that was the case. You see, without the foreign borrowing, Brazil's goverment would have no choice but to raise interest rates (already the highest in the world) and taxes even further in order to finance its deficit (Brazil's goverment has no concept of cutting costs), which would have a devastating effect on the economy. Brazil is a 3rd world country with tax levels that rival those of seen in Scandinavian nations. A significant outflow of capital would be devastating (it would not be a new experience however, we have been through that story quite a few times already).
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