Post: #1

Is it the new rising star of the Americas that will become an economic powerhouse? I've long felt that once the poverty and crime situation are handled, Brazil will be about as perfect a place as you'll find.

Post: #2

(07-29-2010 08:49 PM)speakeasy Wrote:  Is it the new rising star of the Americas that will become an economic powerhouse? I've long felt that once the poverty and crime situation are handled, Brazil will be about as perfect a place as you'll find.

Yes. But that crime shit has got to get resolved. I say bring Giuliani into Rio for the 2010 - 2012.

Post: #3

yea the crime and poverty thing aint gonna get fixed anytime soon. lol

Post: #4

Brazil is the current favorite of the investment world. However, it is heavily dependent on Chinese imports of their raw materials. If China experiences a slowdown, Brazil will get hit and the currency will go down (which is what we want).

If you talk to most Brazilians they still don't have confidence in their economy. I find Brazilians to be some of the most proud people in the world (similar to Americans in their love of country), yet when it comes to economic issues they are skeptical. It was only 9 years ago that Argentina collapsed and Brazil was hit hard. They also experienced hyperinflation in the 80's. So the memories of bad economic times are with every local.

Mainly, the Brazilian people don't have confidence in their government. It is extremely corrupt so they just can't imagine a sound economy where the government doesn't steal the riches and ship off the loot to Switzerland. The tax situation in Brazil is probably the most byzantine among G20 nations.

In other words, there are a lot more headwinds than income inequality. I think Brazil has great potential but a lot can go wrong as it develops. Not every country will develop into economic powerhouse like the U.S.A. circa 1950-2000.

Post: #5

(07-29-2010 11:44 PM)Lief Wrote:  Brazil is the current favorite of the investment world. However, it is heavily dependent on Chinese imports of their raw materials. If China experiences a slowdown, Brazil will get hit and the currency will go down (which is what we want).

If you talk to most Brazilians they still don't have confidence in their economy. I find Brazilians to be some of the most proud people in the world (similar to Americans in their love of country), yet when it comes to economic issues they are skeptical. It was only 9 years ago that Argentina collapsed and Brazil was hit hard. They also experienced hyperinflation in the 80's. So the memories of bad economic times are with every local.

Mainly, the Brazilian people don't have confidence in their government. It is extremely corrupt so they just can't imagine a sound economy where the government doesn't steal the riches and ship off the loot to Switzerland. The tax situation in Brazil is probably the most byzantine among G20 nations.

In other words, there are a lot more headwinds than income inequality. I think Brazil has great potential but a lot can go wrong as it develops. Not every country will develop into economic powerhouse like the U.S.A. circa 1950-2000.

Good post

Post: #6

(07-29-2010 08:49 PM)speakeasy Wrote:  Is it the new rising star of the Americas that will become an economic powerhouse? I've long felt that once the poverty and crime situation are handled, Brazil will be about as perfect a place as you'll find.

Depends....
Brazil has a turbulent history much like most of latin america with hyper inflation,currency controls, and political structure. If you go through the history over the last 100 years (not that a mf should) you will see a ying yang to the economy. Much like it's government, which alot of people forget hasn't been a democracy for long. Mostly falling under military rule and then back to civilian (but heavily influenced by military opinions during civilian rule)..

The real key like other op' have said is
-democratic stabilization..
-control inflation
-find balance with the farmers - rainforest's depletion
-continue the development of the entrepreneurial spirit
-improve the education system especially in regard to the favela's/youth it's the only way to reduce crime and poverty..
-smooth out the draconian bureaucratic inefficiencies
-fight the corruption and murders. not that Americans have room to talk..order and progress is on the flag for a reason though.
-affirmative action - for all the people who say we need to get rid of affirmative action...take a nice glance at Brazil and you will see exactly what you'll return to in the U.S or pre 1970....even LuLa has acknowledged this....

Post: #7

You know the favorite saying of Brazilians:

Brazil is the country of the future, and always will be.

Post: #8

I have been listening to this since I was a kid. About our economy: we had at least 4 current money since the 80's. When I was at the school, I learnt how to count money with cruzeiros, my cousin with cruzado (probably) and her sister cruzado novo and finally my younger cousin with Real, as you know today (14 years ago - not long huh?).
So, don't tell me that your economy is strong, because it is not. Owr law sistem also is slow, the education, key to erradicate the poverty is a shame.
Overall, if you have an issue, don't worry in 2014 all this will be resoved. HAHAHA.

Post: #9

(07-29-2010 10:17 PM)Weapons Wrote:  I say bring Giuliani into Rio for the 2010 - 2012.

Fuck that cretin.

Post: #10

(07-30-2010 11:54 AM)Global Baller Wrote:  

(07-29-2010 10:17 PM)Weapons Wrote:  I say bring Giuliani into Rio for the 2010 - 2012.

Fuck that cretin.

Lmaooooooooooooooooooooooo

that mf is a crook..but that's another thread....i see why his kids hate his fcuking guts

Post: #11

Is it?
http://www.chongas.com.br/2010/07/rio-po...-de-fotos/

It doesn't look like it judging from these pics.

Post: #12

What happened there?

Post: #13

(07-29-2010 08:49 PM)speakeasy Wrote:  Is it the new rising star of the Americas that will become an economic powerhouse? I've long felt that once the poverty and crime situation are handled, Brazil will be about as perfect a place as you'll find.

I have been to Brazil many times it is actually one of my favorite places. But they need to get their economy in place. Eidoos77.

Post: #14

Underestimating Brazil is probably a mistake, I think. It is not a "resource economy" in the Congo or Venezuela sense of the term. Somewhat closer to Australia or Canada. The Brazilians have technologically advanced and independent mining and agricultural industries. On top of this they have advanced manufacturing and engineering: aircraft (they're cleaning up globally in small jets and props), autos, some electronics, etc.

To boot, they have demographics on their side. Their "baby boom" generation is roughly 20 years old now. They'll be growing gangbusters when that generational swell hits forty. That's what always happens (ref HS Dent). See USA circa 1999, Japan circa 1980, China roughly now, and so on.

I can't tell you about the next five years (probably a major correction), but to buy and hold for the next thirty years I'd buy a Brazil ETF way before I buy a China ETF.

Brazil has a large underclass, but I'm not sure how much that really matters. The US has long had an underclass problem, too, though too a lesser extent. It basically doesn't affect the people who are capable and want to make money.

Drunkenly expounding on that last point, George Carlin said that in America "The poor are there to scare the shit out of the middle class." I think there's a lot of truth to that. In homogeneously middle class and ethnically united countries you get way more emphasis on social solidarity and quality of life. People are less concerned with getting rich than fitting in and living well. In class structure societies like Brazil and the US, there's a stronger emphasis on fighting to keep on top and away from the bottom. If there's any basis to this thread, Brazil has that going for it. Though Mexico is in the same boat and their elites seem to choose stealing from everybody else as the primary means to keep on top. I get the impression Brazil is more business like. Sweden is at the other end of the spectrum, where everybody is ethnically united and relatively middle class, so they all agree that building kick-ass enterprises and wealth should take second seat to taking care of everyone.

Post: #15

Brasil has been labelled as the country of the future for the past 50 years or so. But now finally more than ever, this country is poised to live up to that heavy tag. Here are in nutshell some of the reasons why Brasil is not only the country of the future but already a major player in the global arena:

- The IMF (International Monetary Fund) is expecting Brasil's economy to grow by 5.5% in 2010 and 4.1% in 2011.
- Brasil was one of the last countries to be hit by the global recession that hit the world in 2008 and one of the first countries to return to growth.
- Despite the global crisis, the Bovespa (the the equivalent of the Dow Jones in Brasil, in São Paulo's stock exchange index, the biggest in Latin America) rose by 83% and the Real (Brasil's currency) rose by 33%. As an example from first hand experience, in 2002, the US$ was flirting with 4 Reais, now, it's barely above 1.7 Reais).
- The Economist predicts Brasil to be a top 5 global economy by 2024. I personally expect that to be earlier than that around 2017-2018 based on my dealings with Brasil.
- In 2010 alone, Brasil is expected to see an influx of foreign investment to the tune of $45 Billion US$. That's 74% more than 2009.
- Brasil is energy independent and that since the mid 70's thanks to the development of the ethanol than the US/Europe are taking notice of only now.
- The new massive oil fields (the famous Tupi oil) found just offshore of Brasil's coast will start pumping oil of an estimated 60 billion barrels of oil which would put Brasil as a major global energy player.
- The Brasilian manufacturing sector is very strong and I've seen it first hand as I have visited quite a few sites over the years in my trips to Brasil. Brasil produces everything a country needs to run: planes, cars, trains. As a matter of fact, Embraer, is the 2nd biggest company in the world in producing airplanes, trains after Bombardier the Canadian worldwide leader.
- Brasil is one of the largest food producers in the world.
- Brasil is already the world leader exporter of iron, coffee, soy, orange juice, beef, chicken, sugar and ethanol.
- Brasil is a world leader in hydroelectric power generation where 73% of its electricity is produced from its hydro power centres, with the biggest of all, being in Itaipu where the biggest dam in the world produces 100% electricity of Paraguay and up to 80% of Argentina's power.
- Brasil has the largest freshwater reserves in the world.
- Lula has done a lot of good stuff for the working class (among his more laudable policies are the "fome zero" or zero hunger; the bolsa familha to stimulate and encourage poor families to send their kids to school by giving them a kind of allocation if their kids attend school; and the salario minimo (minium wage) more than doubling since he took office in 2002 from 236R to 580R per month. All of that has played a huge role in allowing the poor to be "upgraded" to middle class and their buying power has increased tremendously. This has created a new big consumer base in Brasil that is hungry to consume and has the money to do so. Right there, that's a massive opportunity for manfacturers.
- Brasilian banks are giving away credit lines and credit to more and more Brasilians than ever before in history. I witnessed that personally in my last trip to Rio. The car dealerships were full of people ready to buy. As a matter of fact, car sales rose by 20% in March 2010 over March 2009.
- Brasil is blessed land as it is free of earthquakes, tornadoes, volcanoes and other natural disasters, save the occasional flooding in some parts of the country. But that's due mainly to the poor infrastructure in those areas than anything. Once these infrastructures will be improved, the floods will be considerably reduced and eventually dissapear.
- Brasil is a blessed land (part II) as it is politically stable and has no ethnic divisions or conflicts. Brasil is a country that doesn't interfere in other country's internal affairs nor goes to war at the drop of a hat. Brasil is a relatively neutral country and has a very positive reputation worldwide.
- World Cup 2014, the biggest global sporting event will be held in Brasil.
- Rio Olympic Games in 2016, the 2nd biggest global event will be held in Rio.
- Massive investments are under way by both the governments at all levels as well as private firms/companies to improve the infrastructures of not only the cities hosting the World Cup but also overall around the country. Needless to say these works and projects will create tons of jobs as well as attract hundreds of millions of tourists to the country not just for these events but also for a long time as the country is simply stunningly beautiful and very richly varied in all senses.
- Brasil has some of the best beaches in the world.
- As I constantly tell my friends and relatives, anyone who invests in real estate in Brasil, specially in any of the cities hosting the World Cup matches in 2014 will see at the very worst case scenario their investments double if not triple. I personally expect them to quintuple (X5 if not higher) and I am going on a major scouting trip starting in early 2011 for 6-12 months to scout different areas of the country not only to buy 1 or 2 condos in different cities but also see potentially develop a nice resort or something in a coastal area. And if you are looking to invest in real estate, I'd look away from Rio/SP and more towards either Fortaleza and the Northeast region which is the most booming in the country or the deep south around Curitiba or in Belo Horizonte in Minas or even in Goias in Goiania where the quality of life is some of the best in not only Brasil but of all of Latin America.

All in all, to answer the question as to whether Brasil is the country of the future, I'd say no. Simply because Brasil is already a reality in the global economical arena. They are currently the 6th or 7th biggest economy already (ahead of Spain, the UK and France and just behind Canada) and by or before 2020, I fully expect Brasil to be a top 5 if not a top 3 economy in the world. And as King kong in his post nicely put, underestimating Brasil is a serious mistake and only a fool or a total ignorant would do that. Anyone who follows world affairs would have realized by now that Brasil is already a major player on course to becoming a world leader.

Ordem e Progresso, agora mais do que nunca! Pra frente Brasil!
Salve o Brasil!

Post: #16

Vacancier you make some excellent points. I don't want to come across as negative about Brazil since I'm also looking to make investments there.

For me, the most important factor is demographics. Brazil is a young population and that is a huge tailwind. Secondly, the credit market has just opened up. The young people will all buy cars and houses with borrowed money. Eventually, they'll all be indebted slaves just like the U.S. Thirdly, Brazil has forged a deep relationship with China rather than the U.S. If China has a brighter future than the U.S. this will be a smart move.

In many ways one could make a case that Brazil is similar to the U.S. in 1950.

However, there is one element that is lacking in Brazil. Entrepreneurship on a mass scale. The U.S. became an economic superpower because millions of citizens chose to start businesses. All of the Brazilians I know work for big companies and they don't seem to be interested in starting their own businesses. There is a rich elite that has a stranglehold on things.

As far as 5X increase on real estate - my question is what happened with South Africa pre-World Cup? As far as I know prices did not rise dramatically. I have lived and invested in Latin America and I've seen the promise of infrastructure improvements that never come. You end up waiting 20 years for a simple road to be built if at all. You buy a property at an inaccessible beach and imagine what it will be like when the property is accessible and it never happens. I now have more of a tendency to invest on "what is" rather than the promises of "what will be."

Brazil has a byzantine system for foreign property purchases and I think this keeps the foreign money out. If they made it easy for foreigners you could have a huge price surge.

I agree that the second tier cities offer the greatest promise. Most people think of Brazil as unsafe because of Rio and SP. However, places like Curitiba and Floripa are on a par with U.S. cities in terms of safety. With a good marketing campaign for second tier cities you could see a nice capital gain.

From my research about the booms and busts, the typical history of an apartment in Ipanema is that it will go from $60K-->$400K-->$60K --->$400K. Massive swings.

http://noir.bloomberg.com/apps/news?pid=...135whdyHys
Article about all the money flowing into Rio

http://www.cfo.com/article.cfm/14508833
Article about how confusing the tax structure is