Gustavo Ballvé on September 8th, 2010
Capital goods, Energy, Food for thought, Home, Industries, Portfolio Management, Risk management, Signal or Noise

Brazil was featured in the press in the last week – twice in articles in foreign newspapers and once in a Brazilian newspaper interviewing Paul Krugman. Even though each article can be called out for factual mistakes or simply naiveté/ cluelessness regarding our country, collectively they help temper expectations about Brazil’s growth or attractiveness. We link to and share our take on each of them inside.
LEX: Petrobras – September 6th, 2010 (Financial Times, premium subscription required and worth every penny): On the Brazilian oil giant’s share offering and its risks for investors. “Message to the government” or not, Petrobras is what it is and the government won’t be a “backseat driver” at all – it will be the driver, period. This other article in the same edition of the FT is much better for background and facts.

Education Gaps Limit Brazil’s Reach – September 4th, 2010 (NY Times – also check out the audio slide show): Brazil risks missing the demographic train in the next two decades or so due to a lack of specialized, well-educated workforce. Competitively speaking, it’s even more of a problem. “Chicken flight” allegories jump to mind.

Paul Krugman on Brazil as the market’s “darling” – September 5th, 2010 (Estado de SP – IN PORTUGUESE): Most of the interview is about the US economy. He does admit to not having done a lot of homework regarding Brazil, so his take is more on the Global Macro side in the “don’t underestimate the developed world’s difficulties” line of thinking, which could still impact Brazil – especially if we become complacent from being the market’s darling for so long. As we have been complaining in past posts (here and here), that warning comes not a moment too soon. Here’s another (July 7th ’10) interview with Krugman on Brazil, also in Portuguese, for the same newspaper. This one gets more Brazil-specific, but isn’t particularly insightful.

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