The New Market Machines

“Reality-Test The Press Release”: Red-Zone B-School Cases in Point

Announcing The New World Lusophone Sousaphone

Posted by Colin Brayton on April 5, 2008

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First of all, generally speaking — and there are notable exceptions, mind you — blogging is a waste of time second only to relying on blogs as a source of reliable information with enough value-added to make them worth your time and attention.

Then again, it’s my life to waste.

That said, I come to the marketplace of half-baked ideas to announce that I will fulfill a New Year’s resolution by (1) transferring my blogging activity to The New World Lusophone Sousaphone, and (2) spend more time on O Bicho-Preguiça, where I promised myself I would publicly work to improve — or fail to improve — my abysmal New World Portuguese prose style.

Adjust your bookmarks accordingly. Or not.

It’s not like you blog-reading fools contribute to my household income, after all.

Some initial posts from the Sousaphone:

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Brazil: “Dynastic Succession Struggle at TV Bahia”

Posted by Colin Brayton on April 3, 2008

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PROJOR study: “Electronic Coronelismo of a New Kind (1999-2004): Broadcast licenses as medium of exchange in political bargaining.” Thorough.

Briga dos Magalhães atinge renovação de emissora: “Strife among the Magalhães clan affects renovation of broadcast concession.” Terra Magazine reports.

One of the more interesting stories to watch here in Brazil is the phenomenon known as “electronic coronelismo.”As the Colombian newspaper owner once said:

“Newspapers are like revolvers: You keep them around so you can pull them out when it’s time to open fire.” — Julio Mario Santo Domingo (El Espectador)

It’s a lot like Rupert Murdochism, only far more crude, grotesque and retrograde  in its antidemocratic perniciousness.

When the late Antônio Carlos Magalhães was the Minister of Communications under President Sarney, he tended to hand out broadcast concessions as political party favors. A legendary episode in a legendary life.
TV Bahia, for example, a Rede Globo retransmitter, is owned and operated by lots of people named Magalhães, as you will read. See also

Residents of Maranhão and Amapá tend to get their news from outlets controlled, directly or indirectly, by people named Sarney. As in the father-and-daughter senators Sarney. And so on.

I was recently working on a pauta (roughly, a story “pitch”) about consultancies here that specialize in helping family-controlled businesses deal with the ways in which the Freudian family romance can interfere with rational business planning and management. This would seem to be a case in point.

A briga dos herdeiros do ex-senador Antonio Carlos Magalhães atinge seu segundo impasse. Depois da derrota do dono da construtora OAS, César Mata Pires (casado com Tereza Helena, filha de ACM), na disputa pelo controle da Rede Bahia, a ausência de rubricas e assinaturas tumultuam a renovação do sinal da emissora TV Santa Cruz, em Itabuna, uma das principais cidades do interior baiano.

The quarrel among heirs to the late ACM has reached a second impasse. After the defeat suffered by the owner of the OAS construction company, César Mata Pires (married to a daughter of the late senator, Tereza Helena), in the dispute for control of the Rede Bahia network, the absence of the proper stamps and signatures is throwing a monkey wrench into the renovation of the concession for TV Santa Cruz in Itabuna, one of the main cities in the interior of Bahia.

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The Cardoso Room-Service Blackmail Dossier: “Veja’s Deep Throat Revealed!”

Posted by Colin Brayton on April 3, 2008

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Veja magazine, March 2002: “The Dossier Wars: Politicians and spies have set up a slander industry in Brazil.” Right: And Veja is that industry’s Yoyodyne. Ask Veja about the work that Jairo Martins later did for it (and testified to a congressional committee about).

Brazilian journalist Luis Nassif has mounted an incredible army of Internet Brancaleones to severely criticize the neo-Lacerdist style of journalism practiced at Veja magazine (Grupo Abril) — what Mr. Nassif has described, with good reason, as an attempt to import the “neocon style” into Brazilian journalism.

I personally think the neocons got their style from the kind of banana-republican fascists in whose footsteps Veja follows, but that is a subtle historical debate for another time.

One of the hallmarks of that journalism is the use of anonymous sourcing as the rule, rather than the very carefully pondered exception.

Anyone who has ever read a manual of good journalistic practice knows that you can save yourself the embarrassment of running gabbling, unsubstantiated rumors and vouching for nonsense (the “Jayson Blair-Judy Miller syndrome”) by observing a couple of simple rules of thumb: (1) think twice about granting anonymity to sources, explain why you granted it, and give as much information about the source as possible; and (2) in any event, always corroborate what your Deep Throat is telling you six ways from Sunday before running it, or else make it very explicit that the information you are presenting has not been corroborated.

Unless, of course, running unsubstantiated rumor does not embarrass you.

The case that always comes to mind — I have been doing a fair amount of reading up on the history of this sort of thing here in Brazil — is that of an accusatory scandal story about a politician whom Veja reported had US$1 million in a (bribe-stuffed, allegedly) bank account.

At the last minute, those snotty little know-it-alls in the fact-checking department discovered that the account actually only contained R$1,000.

So Veja, which already had the scandalous cover printed up, started calling around to try to get a source to “confirm” the US$1 million figure.

It found one in a bitter political adversary of the target. So it ran with the US$1 million figure, even though it had information to the contrary. And did not identify the source of the US$1 million figure, to boot.

It later apologized — sort of — for getting the story wrong. See

It also later abolished its fact-checking department.

In a related story, I wish very much not to owe any taxes this year. So I shop around for an accountant who will sign off on the proposition that my taxable income last year was, not $1 gazillion (would that it were), but $0.

So who was Veja‘s source on the rumor that a government minister “rigged up a blackmail dossier” against former President Cardoso?

A member of the Brancaleones writes in to say we now know. It is not quite crystal-clear to me that we do, but it does seem that Veja has some explaining to do.

A fonte da Veja

Veja‘s source

De Flávio Cantu

By Flávio Cantu

Nassif,

Dear Nassif,

Me desculpe o “off-topic”, mas o Senador Alvaro Dias confirmou que foi a fonte da Revista Veja.

Pardon my “off-topic” posting, but Senator Dias has confirmed being the source of that report in Veja magazine.

Sort of. Current reports are that he has denied publicly that he passed along the documents facsimiles of which were printed in the magazine, but admits that he himself was passed copies from a source he says he cannot reveal.

Um amigo de uma emissora de TV me disse no domingo que o serviço de inteligência do Governo sabia quem estava com cópias dos três falsos dossiês e que sua emissora estava no encalço destas pessoas.

A friend of mine at a TV channel told me Sunday that the government’s intelligence service knew who had copies of three phony dossiers, and that his news organization was on the trail of these persons.

Mas me parece que o “furo” do Noblat também furou a emissora que estava pronta para dar a notícia do vazamento do “dossiê” pelo Senador do PSDB.

But it seems that Noblat’s “scoop” also scooped this TV channel, which was ready to put the story on the air about the leaking of the “dossier” by the PSDB senator.

Foi uma maneira de manter aquela máxima do jornalismo:

It was a way of observing that maxim of journalism:

“Vamos dar primeiro a notícia para não sermos furados pela concorrência”

“Let us run the story first so as not to be scooped by the competition.”

Do Terra Magazine

From Terra Magazine:

O senhor admitiu que viu as informações antes de elas serem tornadas públicas. Em que circunstâncias isso aconteceu?

You have admitted that you saw this information before it was made public. In what circumstances did this occur?

Álvaro Dias – Olha, o jornalismo investigativo tem prestado um grande serviço ao País, seria muito pior a degradação das instituições, não fosse a competência e a ousadia do nosso jornalismo de investigação. E isso se dá em razão de fontes. O jornalistas se utiliza de muitas fontes. Uma revista do porte da Veja, que só no escândalo do mensalão divulgou, se não me falha a memória, matérias de capa 17 vezes, não contou com apenas uma fonte. Certamente valeu-se de muitas fontes de informação. Eu tenho sido ouvido por muitos jornalistas, do Terra, de outros sites, de jornais, emissoras de TV e certamente outros parlamentares da mesma forma. Esse é o caminho para se produzir a informação.

Álvaro Dias: Look here, investigative journalism has done this country a great service, the degradation of its would be much worse if it were not for the competence and daring of our investigative journalists.

He is changing the subject while filibustering, note.

And this is because of sources. Journalists use many sources. A magazine of Veja‘s stature, which on the “big monthly allowance” affair ran, if memory serves, 17 cover stories, does not use just one source.

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“Someone Found a Chicken Bone and Sold It to the Press as a Dinosaur Bone”: Further Notes on the Cardoso Room-Service Blackmail Dossier

Posted by Colin Brayton on April 3, 2008

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Veja magazine, March 2002: “The Dossier Wars: Politicians and spies have set up a slander industry in Brazil.” Right: And Veja is that industry’s Yoyodyne. Ask Veja about the work that Jairo Martins later did for it (and testified to a congressional committee about).

“The impression I have is that someone found a chicken bone and tried to sell it to the press as a dinosaur bone.” –President Squid on the Cardoso Room Service Blackmail Dossier

Para Lula, Dilma foi vítima de ´leviandade clandestina´: Dilma “Comrade Wanda” Rousseff, midwife to the mother of all economic stimulus packages,  is said to be the victim of, what?

“Shadowy disingenousness?” “Sneaky nonsense”? A “dark and unspeakable gabbling ratfink?”

Who leaked the lunch and room service tabs of Fernando Henrique Cardoso to Veja magazine? The name of an opposition senator is floating around now, but who knows? Does it really matter? Probably not.
See also

Leviandade, according to the fine Michaelis PT-EN dictionary:

sf 1 levity, thoughtlessness, imprudence. 2 frivolity, folly, flippancy.

Dilma Rousseff, the successor to Zé Dirceu as the Brazilian minister of the Casa Civil, and midwife to the government’s “economic growth acceleration plan” (PAC), has been the target of recent accusations by Veja magazine and the Folha de S. Paulo that she presided over the ginning up of a “blackmail dossier” against former President Cardoso.

I read Carta Capital, Valor and the Estado de S. Paulo myself (although the reportagem local and some other journalists at the Folha are worth keeping up with.)

Defenders of the government charge that the “scandal of the blackmail dossier” is just a phony tempest in a teapot designed to cut down the number of column inches dedicated to the success of the program presided over by the former Comrade Wanda, around whom swirl rumors of a presidential candidacy in 2010.

They may have a point. I mostly note it as a student of artificial South American media frenzies and the journalism of “moral panic.” This is, I expect, most likely another one of those. Long live the restless ghost of Carlos Lacerda.

BRASÍLIA – A elaboração e divulgação de um dossiê com dados sigilosos sobre gastos feitos pelo presidente Fernando Henrique Cardoso e sua mulher, dona Ruth, foi uma ” leviandade clandestina ” e ” chantagem política ” contra a ministra da Casa Civil, Dilma Rousseff, disse o presidente Luiz Inácio Lula da Silva, ao comentar o envolvimento da ministra na polêmica criada com a revelação das informações da Presidência protegidas por sigilo.

The preparation and publication [by Veja magazine] of a dossier containing confidential data on the expense accounts of former president Cardoso and his wife, Ruth, was a ["bunch of cloak-and-dagger nonsense"] and a “political blackmail tactic” used against Rousseff, said President Lula da Silva, commenting on the controversy over the publication of confidential data on presidential expense accounts.

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Viral Political Marketing Notes: “The Naked Mayor Blogs While Rio Burns With Fever”

Posted by Colin Brayton on April 2, 2008

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Reported cases of dengue, by month, in Rio de Janeiro. The darker the area, the greater the number of reported cases. This year: 206.8 cases/100,000 inhabitants in Rio. Reported cases this year: 31,552, compared with 10,464 last year. Source: Estado de S. Paulo today.

… we need a communications policy and an ongoing dialogue with the mass media that will guarantee that the sense of risk is proportionate to the actual risk. –César Maia, from the ex-blog

The Brazilian Ministério do Planejamento carries the following angry editorial today from the Jornal do Brasil about the dengue outbreak in Rio de Janeiro and the city’s outgoing mayor, Cesar “The Naked” Maia.

If you live here in Brazil, you have already survived the apocalyptic yellow fever epidemic of 2008 that really wasn’t — unless you panicked, overdosed on the vaccine when you really had no need of taking it in the first place, and died from that. As a few people did.

Now, courtesy of the same mosquito, here is the great dengue outbreak of 2008 — which by all accounts really is quite a serious public health problem.

See also

There is one thing that I do not quite understand about the current crisis, however, which is getting coverage worthy of the OJ Simpson trial here.

Dengue outbreaks, which are concentrated in the rainy season (January to March) — like yellow fever outbreaks — seem to be cyclical, spiking up every few years or so.

And the outbreak in 2002, with 155,242 cases, was much worse, was it not?

This would not excuse lack of preparation, planning and proper response during this outbreak, of course — responsibility for which is quite the political hot potato.

The fear of death aside, then, it is interesting, as a watcher of other people’s C-SPAN in a strange land, during a municipal election year, to see this outbreak being treated as something like Chairman’s Maia’s Hurricane Katrina.

Here in São Paulo, the government media blitz regarding “here is how to prevent dengue” was very visible (and well done, we thought.)

Me and the Mrs. even made sure we did not leave any stagnant water around for the mosquito to breed in, even though our neighborhood is probably not at great risk.

We are not too worried about dengue, that is, but we are much more worried about it than we were about yellow fever, despite the boob tube’s attempt to make us very, very, very afraid. See

The JB editorializes. I do not necessarily endorse the sentiment. I merely translate pra inglês ver.

Enquanto pacientes com dengue aguardavam ontem três horas por socorro em hospitais sem médicos, e doentes lotavam as tendas de campanha, o prefeito César Maia continuava escondido na internet e nas amenidades de sua agenda. Só saiu do gabinete para o Palácio da Cidade, onde recebeu vereadores e almoçou com oficiais do Exército. O JB o procurou para saber o que foi discutido, mas a resposta veio por e-mail. Maia voltou a negar a epidemia, que já matou 44 pessoas no Rio este ano: “Há um surto epidêmico em Jacarepaguá”. Disse ter visitado os mesmos hospitais municipais onde ninguém o vê. Irritado, o governador Sérgio Cabral cobrou a abertura dos 100 postos de saúde do município que o prefeito insiste em manter fechados nos fins de semana.

While patients with dengue waited three hours for treatment at hospitals without doctors, and sick people crowded into the tents of the [Air Force] field hospitals, mayor César Maia continued hiding out on the Internet and in events on his ceremonial calendar.

Mayor Maia blogs. Blogs copiously, in fact, as I know from subscribing to his daily “ex-blog” newsletter. I have often wondered myself how he finds the time to do anything else.

He only left his office to go to City Hall to meet with aldermen and lunch with Army officers. The JB tried to find out what they discussed, but the response came back by e-mail. Maia once again denied that an epidemic, which has killed 44 so far this year, exists: “There is an epidemic outbreak in Jacarepaguá.” He said he visited the same city hospitals where no one reports having seen him. Irritated, Governor Cabral demanded that the city open 100 clinics that the mayor insisted remain closed during the weekend.

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São Paulo Diary: “Panic in Rio Preto”

Posted by Colin Brayton on April 2, 2008

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S. José de Rio Preto (450 km from São Paulo, population 415,000). The midsize Brazlian city-dweller is the demographic of the future, local marketers say. 

BOM DIA (São Jose de Rio Preto, São Paulo, Brazil) is one of those small regional newspapers that are interesting to keep up on when you run across them.

Some local press observers attribute the diminishing influence of the Six Families over public opinion to the emergence of sustainable local and regional media businesses like this. They may have something there, too.

As a supplement to my standing Google news alert on the term “glitch” — I have a general interest in the the Second Law of Thermodynamics (and Murphy’s Law) as it applies to complex technical systems — I also have a standing Google Brasil news alert on the term pane (outage, blackout, system failure, glitch) to catch Lusophone newsflow on the same topic.

In this case, the story of how Rio Preto dropped out of the Information Age for some five long hours.

Por 5 horas e 15 minutos, Rio Preto ficou sem comunicação. A pane nos telefones durou das 8h45 às 14h. A causa foi o rompimento de dois cabos de fibra óptica que atendem a Telefônica, a Embratel e a NET.

For 5 hours and 15 minutes, all communications ceased in Rio Preto. The telephone outage lasted fro 8:45 am to 2:00 p.m. The cause was the breaking of two fiber optic cables that serve Telefónica, Embratel and NET [cable TV and Internet].

Na região, 467 mil telefones ficaram mudos. Sem eles, sistemas de comunicação de bancos, lotéricas, comércio, polícia e até do Samu ficaram fora do ar. Pagamentos com cartões eletrônicos, que dependem de linha telefônica, não puderam ser realizados no comércio. Operadoras de celular também foram afetadas nas ligações de longa distância e para o serviço de call center.

Some 467,000 telephones in the area went dead. Without them, the communications systems of banks, lottery agencies, businesses, police agencies and even Samu [police, fire and medical emergency call center] went off the air. Electronic payments, which depend on telephone services, could not be made in local businesses. Cellular operators also experienced difficulties with long-distance calls and call center service.

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Exame: “Who Is To Blame For The Imminent Apocalypse?”

Posted by Colin Brayton on April 2, 2008

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If you are driving on the Greater São Paulo Viaduct … don’t ask why. Just duck. Note
favelas in the background. On the teettering-tottering Tiradentes busway, see São Paulo Diary: “Things Fall Apart. The Fura-Fila Cannot Hold”

They shouted out, “Who killed the Kennedys?”
When after all, it was you and me.
–Jagger-Richards, “Sympathy For the D-vil”

If anything characterizes our times, it is a sense of pervading chaos. In every field of human endeavor, the windstorms of change are fast altering the ways we live. Contemporary man is no longer anchored in certainties and thus has lost sight of who he is, where he comes from and where he is going. — The American Society for the Defense of Tradition, Family and Property, quoted in my Spinning the World Backwards.

Item: De quem é a culpa?

Who is to blame for the imminent and inevitable collapse of Paulista civilization?

The business newsweekly Exame (Editora Abril, Brazil) weighs in on the question.

Editora Abril publications routinely adopt an analytical perspective that is (1) moralistic (“who is to blame?”); (2) apocalyptic (“the sky is falling!”); (3) long on belaboring of the obvious; and (4) shot through with hoary, reheated factoids and fuzzy numbers.

Não é do crescimento. Não é das montadoras. O colapso do trânsito em São Paulo é uma mostra de um país que não se preparou para o progresso

Growth is not to blame. Automakers are not to blame. The collapse of traffic in São Paulo is one more sign that Brazil has failed to prepare the way for progress.

By Fabiane Stefano

A cidade de São Paulo coleciona recordes. Alguns louváveis, outros desalentadores. A maior metrópole do país acabou de conquistar uma marca que é um misto das duas coisas. Hoje, nas ruas paulistanas, 6 milhões de carros brigam por espaço nos 15 000 quilômetros de vias asfaltadas. Trata-se de um recorde que a cidade renova a cada dia, com o registro de 800 novos veículos. Por um lado, o dado mostra a pujança econômica da metrópole e reflete, em boa medida, o bom desempenho do PIB brasileiro, que em 2007 fechou em alta de 5,4%. Por outro, denota o caos que virou a vida de quem precisa se deslocar por São Paulo. Dia após dia, a velocidade nos principais corredores da cidade diminui e os congestionamentos aumentam — na noite de quinta-feira, dia 13, 221 quilômetros de vias estavam abarrotados de veículos virtualmente parados, a maior marca já registrada até o fechamento desta edição. À medida que ruas e avenidas ficam progressivamente bloqueadas, cada vez mais gente se pergunta: de quem é a culpa pelo trânsito congestionado? “Falhamos todos: a sociedade, que se acomodou com o automóvel, e, sobretudo, o governo, que não fez a lição de casa e não investiu em transporte público”, diz Jaime Waisman, professor da Universidade de São Paulo. “Agora, temos transporte privado de Primeiro Mundo e público de Quinto — estamos todos parados.”

The city of São Paulo continues to set records. Some of them admirable, some disheartening. The biggest city in Brazil recently set a mark that is a mixture of the two. Today, some 6 million cars vie for space on the city’s 15,000 km of paved streets and roadways. It is a record that is superceded every day, with the registration of 800 new vehicles. On one hand, this figure reflects the city’s economic dynamism and favorable GDP trends in Brazil, with 5.4% growth in 2007. On the other hand, it denotes that chaos that trying to get around the city has become. Day after day, the average speed of traffic along the principal corridors decreases and congestion increases. On the night of March 13, 221 km were clogged with stop-and-go traffic, an all-time high. As streets and thoroughfares grow increasingly congested, more and more people are asking: Who is to blame for traffic congestion?

CartaCapital magazine ran an editorial package several issues ago, for example, based on the same observations.

Its coverage, however, was oriented toward the question, “What ought to be done about this problem?”

The magazine drew up a list of concrete policy proposals of various kinds and talked to a diverse selection of traffic pundits about the viability and efficacy of the same. It was very informative and thorough.

(I remember being interested to read about a PSDB city councilmember whose proposal to restrict curbside parking on major thoroughfares died stillborn thanks to the forces of NIMBYism, for example.)

Which kind of summarizes why I personally tend to spend my weekly budget for newsmagazines on CartaCapital and not the publications of the House of Civita.

The House of Civita tends to waste time preaching doom and wagging a moralistic finger rather than trying to discover ways of reducing the bagunça to a manageable level in the short term and chipping away at it in the long term.

I mean it. Its constant theme is Chicken Little’s refrain: “The sky is falling! The sky is falling!”

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São Paulo Diary: “Things Fall Apart. The Fura-Fila Cannot Hold”

Posted by Colin Brayton on April 1, 2008

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If you are driving on the Greater São Paulo Viaduct … don’t ask why. Just duck. Note
favelas in the background.

GROUCHO: Now, here is a little peninsula, and here is a viaduct leading over to the mainland. CHICO: Why a duck? GROUCHO: I’m all right. How are you? I say here is a little peninsula, and here’s a viaduct leading over to the mainland. CHICO: All right. Why a duck? Why a – why a duck? Why-a-no-chicken?

Após acidente, SP vai adiar inauguração do Expresso Tiradentes: The metro section of the Estado de S. Paulo on the latest infrastructure-related PR disaster here in the South American city so nice they named it twice.

SÃO PAULO – O trecho em que as obras do Expresso Tiradentes (antigo Fura-Fila) cederam, na noite de segunda-feira, 31, não será mais inaugurado no dia 18 de maio, como estava previsto no planejamento da São Paulo Transportes (SPTrans). A informação foi confirmada nesta terça-feira, 1, pelo prefeito Gilberto Kassab, durante visita ao local. O prefeito também prometeu que ainda nesta terça a SPTrans e o Consórcio Andrade Gutierrez-Carioca farão um laudo preliminar explicando as causas do deslizamento.

The portion of the Tiradentes Expressway (formerly known as the ["traffic-jam skipper"]) that collapsed on Monday evening will no longer be inaugurated on May 18, as planned by the São Paulo Transportation Authority (SPTrans). Mayor Kassab confirmed this today during a visit to the site. The mayor promised that SPTtrans and the Andrade Gutiérrez-Carioca Consortium would issue a preliminary report on the cause of the collapse.

This is a dedicated crosstown bus expressway that rusted for a decade or more after being proposed by Paulo Maluf and disposed by Malufist mayor (and now convicted felon) Celso Pitta (Harvard MBA, year unavailable).

Before being dusted off, given a fresh coat of paint, and set running by the current Mayor Quimby — much like the pharaonic Aguas Espraiadas causeway that, as a local wag says, conducts you safely and in high style from one infernal, eternal traffic jam on Roberto Marinho the Journalist Avenue to another one on the other side of the [unbelievably polluted] Pinheiros River.

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From the PR Newswire: “Brazil Originates Derivatives”

Posted by Colin Brayton on April 1, 2008

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PR Newswire Brasil has not quite taken off yet — it has not yet signed up a critical mass of businesses to make the thing worth following with great attention — but the attempt to port the service down South America Way is interesting, and probably ought to catch on eventually.

I have actually met some folks trying to get it off the ground here, in combination with promoting a “culture of disclosure” for Brazilian businesses, and I can sincerely say: It seems like a good idea.

Here, at any rate, is an event that I will very likely try to attend, if they let me in. (There is a big venture capital event in Rio earlier in the month I also want to attend.)

A indústria brasileira de fundos de derivativos alcança o ponto de virada

Brazilian derivatives fund industry reaches a turning point.

I was just starting to get that impression myself, even if “turning point” — revolution, apocalypse — is the most frequently abused metaphor in postmodern PR.

This, even as an interesting commentary appeared the other day according to which the unevolved state of complex financial contracts here deserve credit for shielding Brazil from the effects of the subprime crisis.

See

BN003644 01 de abril de 2008 10:29 HORALOCAL

US$127 bls e crescendo

US$127 billion and growing

NOVA YORK, 1 de abril de 2008 /PRNewswire/ — O Mercado brasileiro de fundos de derivativos manteve um crescimento exponencial na última década. Desde dezembro de 2000, a indústria cresceu um 1.020% extraordinária, alcançando US$127 bilhões de ativos sob gestão. Enquanto os fundos de derivativos sobressaem sobre outros tipos de fundos de derivativos internacionais, o mundo presta atenção.

The Brazilian derivatives fund market has grown exponentially during the current decade. Since December 2000, the industry has grown at the extraordinary rate of 1,020%, attaining US$127 billion in assets under management. And as [Brazilian] derivatives funds pass by other types of international derivatives funds, the world is starting to sit up and pay attention.

Mais de 300 profissionais de fundos de derivativos irão chegar a São Paulo de 28 a 30 de abril no Alternative Investment Summit Brasil — o primeiro congresso de fundos de derivativos do país. Palestrantes notáveis incluindo o presidente do Banco Central, Henrique Meirelles, o presidente e diretor-executivo da Marathon Asset Management, Bruce Richards, e o sócio-fundador da Mauá Investimentos, Luiz Fernando Figueiredo.

More than 300 professionals from derivatives funds will be in São Paulo from April 28 to April 30 for the Alternative Investment Summit Brazil — the first derivative funds congress in the nation. Notable speakers including Central Bank president Meirelles, president and CEO of Marathon Asset Management Bruce Richards, and founding partner of Mauá Investiments, Luiz Fernando Figueiredo.

Esse evento está programado para ajudar os investidores brasileiros e internacionais a pilotar nesse próspero mercado. O congresso irá unir gestores de fundos de derivativos, investidores, reguladores e economistas para discutir os seguintes assuntos:

The event is designed to help Brazilian and international investors navigate this prosperous market. It will bring together fund managers, investors, regulators and economists to discuss the following topics:

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Nassif on the Cardsoso Lunch-Tab Blackmail Dossier: “Factoids Beget Factoids”

Posted by Colin Brayton on April 1, 2008

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Veja magazine, March 2002: “The Dossier Wars: Politicians and spies have set up a slander industry in Brazil.” Right: And Veja is that industry’s Yoyodyne. Ask Veja about the work that Jairo Martins later did for it (and testified to a congressional committee about).  

factoid (something resembling a fact; unverified (often invented) information that is given credibility because it appeared in print)

Writing in the Observatório da Imprensa (Brazil), Luis Nassif — who has been writing an admirable series on what he calls “the neocon style” in Brazilian journalism, and Veja magazine in particular — addresses the 24-7 hysterical shrieking political scandal of the hour here in Brazil.

A cabinet office preparing information for a congressional probe of executive-branch expense accounts during the last two presidential administrations had — good God almighty! — put together information on executive-branch expense accounts of the last two presidential administrations. See

It is my (unscientific) observation  that rank and file Brazilians of all persuasions tend to feel that their elected representatives are outrageously overpaid to do nothing but quack nonsensically about public morality while (1) wagging their fingers and shrieking loudly about phantom menaces, (2) hiring their wives, children, cousins, in-laws, and law-school roommates, and people they have gambling debts with, to cushy government jobs they do not even have to come in to work for, and (3) voting themselves regular pay raises.

Your typical rank and file Brazilian is no idiot, either. You can tend to see why they might think that. Nassif:

Não adianta. Não existe responsabilidade institucional da mídia de opinião. Seja qual for o governo, é permanente a tendência de mostrar os músculos e fabricar crises, criar factóides e “esquentar” qualquer informação como se fosse o último papel de Watergate.

There is no way around it. The Brazilian “opinion media” utterly lacks institutional responsibility. No matter what government is in power, it has a permanent tendency to flex its muscles, fabricating crises, ginning up factoids and “heating up” every piece of news as though it were the latest chapter in the Watergate saga. 

Tome-se a matéria de sexta-feira (28/3) na Folha de S.Paulo sobre o tal dossiê com os gastos da família de FHC – divulgado na última edição da Veja (ver aqui).

Take the article that appeared on Friday in the Folha de S. Paulo about this supposed “dossier” on the expense accounts of President Cardoso and his family — published in the last edition of Veja magazine.

Há um levantamento de dados sobre as despesas do Palácio no governo Fernando Henrique Cardoso. Não há compra de drogas, pagamento de prostitutas, desvio de recursos. Há uma ou outra conta mais elevada em restaurantes, aluguel de automóveis, como deve haver nas despesas pessoais da família Lula. Nada que denigra FHC. E são prerrogativas do cargo.

This is a collection of data on official expenses of the presidency during the Cardoso administration. There is no spending on hookers or drugs or siphoning off of public money here. There are receipts here and there for notable sums spent on restaurants or car rentals, as there must be in Lula’s personal expense account. There is nothing there to denigrate Cardoso. These are the perks of office.

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Lost In Translation: The Future of the Raw Materials Negotiating Committee

Posted by Colin Brayton on March 31, 2008

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G. Edward Griffin exposes the most blatant scam of all history. It’s all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity. It’s just exactly what every American needs to know about the power of the central bank.”

Plano prevê fortalecimento da SEC nos EUA: The Paulson plan “will strengthen the U.S. Securities and Exchange Commission,” reports Exame magazine (Editora Abril), passing along a wire-service report from the Agência Estado (Brazil), which cribs its coverage in turn from the Dow Jones Newswires.

Which is an odd analysis. Something may have gotten lost in translation here.

I have not been following the matter closely, but the prevailing wisdom seems to be that the Federal Reserve will centralize regulatory authority under this plan, relegating the SEC to the regulatory backwaters.

Embittered SEC watchers having been heard to complain that the agency sent up by the Exchange Act of 1933 to prevent catastrophic market meltdowns after the Crash of 1929 has a long and undistinguished history of egregiously failing to do precisely that.

O plano do Tesouro dos Estados Unidos para reformar o sistema regulatório financeiro dos EUA prevê a fusão do órgão regulador do mercado de capitais (Securities and Exchange Commission, SEC) com a Comissão de Negociação Futura de Commodities (matérias-primas), trazendo as obrigações de supervisão das ações e dos mercados futuros para um único guarda-chuva, revelou o secretário do Tesouro dos EUA, Henry Paulson.

The plan submitted by the U.S. Treasury Dept. for reforming the financial regulatory system provides for a merger of the SEC with the [CFTC], bringing securities and futures under a single umbrella, Paulson revealed.

There is, of course, no U.S. regulatory agency called the Comissão de Negociação Futura de Commodities (the “commision on the future trading of raw materials,” as the Estadão would have us understand.)

If a Brazilian reader wanted to look the agency up after reading this story, there would not be able to.

The standard solution for this sort of situation might be to refer to it as

… a Commodities Futures Trading Commission (Comissão de negociação futura de commodities, ou CFTC, pela sigla em inglês)

Imagine if I were to write about the Brazilian presidency as the “High Plains Palace” because it is often referred to as the Palacio do Planalto. Or if you were to decide that my name is not Colin, but, what? Zé Bu?

The AFP wire story on the development follows this common-sense principle:

Entre as outras medidas anunciadas, encontram-se a criação de uma agência de vigilância de empréstimos imobiliários e a fusão da Securities and Exchange Commission (SEC), autoridade regulamentadora dos mercados financeiros norte-americanos, com a Comodity [sic] Futures Trading Commission, autoridade de regulação dos mercados de matérias-primas.

Also peculiar, to my ear, is the information that the word “commodities” means the same thing as matérias-primas (raw materials.) The usual dictionary translation is

mercadoria

The Brazilian commodities exchange is known, for that reason as the Bolsa de Mercadorias e Futuros (“the commodities and futures exchange.”) By extension, the CFTC would be, what, the Commissão [Sobre a Negociação] de Mercadorias e Futuros?

No discurso preparado para divulgação do programa de reformas regulatórias do Tesouro, Paulson disse que tal fusão iria eliminar o caráter federal das poupanças, desdobrando a Agência de Supervisão de Instituições de Poupança ao órgão regulador bancário nacional, a Autoridade Controladora da Moeda.

In a speech announcing the Treasury’s regulatory reforms, Paulson said this merger would eliminate the federal character of savings accounts, adding the function of the [FDIC] to the national banking regulator, the [Office of the Comptroller of the Currency].
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Brazil: “The CFIUS Is a Product of Gringo Insanity!”

Posted by Colin Brayton on March 31, 2008

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Brazilian imports of audiovisual programming, 2004-2007. This may explain why such an impressive portion of Brazilian TV is just bad American TV, badly dubbed.

If Brazil had similar legislation, many of the privatizations that took place during the Cardoso administration … would never have come off, including those in the telecommunications and mining sectors. Likewise, certain government procurement deals would never had been carried out, such as control over the Amazonian airspace and equipment acquired by the air force, for example. It is true, however, that FINSA is a radical measure, inspired by the same insane ideology that has led the U.S. down the road to ruin and crimes against humanity.

Ouch.

The bill was sponsored by my old congressional representative (back when we lived in Fort Greene, which for some weird reason was in the same congressional district as a strip of the Upper East Side of Manhattan. This before we moved to Prospect Heights, Brooklyn, a political chocolate city presided over for 30 years by Major Owens — our local version of Tip O’Neill, for both good and ill, I suppose.)

The online legal affairs magazine Última Instância (Brazil) casts a jaundiced eye on the Foreign Investment and National Security Act of 2007:

A nova lei de investimentos estrangeiros e de segurança nacional dos EUA

“The new U.S. law on foreign investment and national security.”

São Paulo – A Finsa (Lei de Investimentos Estrangeiros e de Segurança Nacional) dos EUA (Estados Unidos da América) entrou em vigor em outubro de 2007 e será regulamentada no próximo mês de abril de 2008. A nova lei dá poderes à administração federal dos EUA para proibir ou suspender qualquer fusão ou aquisição de uma companhia estadunidense que possa ameaçar ou, de qualquer maneira, prejudicar a segurança nacional do país.

Finsa went into effect in October 2007 and will be regulated in April 2008. It gives the federal administration the power to bar or suspend any M&A transaction by a U.S. company that might pose a threat to or in some way harm the national security of the United States.

A Finsa cria mecanismos de consulta prévia para negócios no âmbito de fusões e aquisições a ser formulada ao CFIUS (Comitê de Investimentos Estrangeiros nos Estados Unidos), mas também dota este órgão administrativo de poderes para revisão ex post facto , posterior à concretização das respectivas operações, podendo vetá-las, remetendo-as à situação anterior, status quo ante.

Finsa creates procedures for prior analysis of M&A deals by the CFIUS, but also gives this body powers of ex post facto review of done deals, with the ability to veto those deals and return them to the status quo ante.

O principal objetivo da Finsa é o de impedir qualquer entidade controlada direta ou indiretamente por um governo estrangeiro de adquirir obras ou operações de infra-estrutura crítica no país, como telecomunicações, portos, aeroportos, produção de energia e transporte, dentre outros. De fato, bens de “infra-estrutura crítica” são definidos como “sistemas ou ativos, quer físicos ou virtuais, tão vitais para os EUA que a incapacidade ou destruição de tais sistemas ou ativos teriam um impacto debilitante sobre a segurança nacional” (sic).

The principal objective of Finsa is to prevent any organization controlled directly or indirectly by a foreign government from operating or acquiring critical infrastructure such as telecoms, ports, airports, energy production and transportation, among others.

I say we should apply this rationale to the FOX Network and Murdoch’s acquisition of the Wall Street Journal.

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Nassif: Veja’s Deep Throats

Posted by Colin Brayton on March 30, 2008


Veja’s Mainardi on Globo’s late-night Jô Xô repeats the unsubstantiated rumor that senior government officials have bribe-stuffed offshore bank accounts — defending the exercise in logic-chopping gibberish with a gibbering tautology.

Brazilian political and economic commentators perform their analyses before the fact. Before they know that it actually happened, they have an explanation for it. They present opinion divorced from information. –Ricardo Kaufmann (O Globo: “Chávez Won the Referendum Because He Manipulated the System!”)

A “senior adviser to Bush,” Suskind reports, says to him that “guys like me were ‘in what we call the reality-based community,’ which he defined as people who ‘believe that solutions emerge from your judicious study of discernible reality.’ I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ‘That’s not the way the world really works anymore,’ he continued. ‘We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.’

Rumor is both a process of information dissemination and a process of interpretation and commentary. Shibutani conceives of rumor as a collective activity that tries to make sense of unexplained events, but insists that it depends on two necessary conditions: The importance of the information and its ambiguity. –“Rumors: Voices That Insinuate”

O araponga e o repórter: “The Spy and the Reporter.”

Brazilian business journalist Luis Nassif publishes another installment in his series on the type of “journalism” practiced by Veja magazine (Editora Abril).

My wife and I laughed last week to see the leader of the opposition in the lower house of Congress, deputy Vergilio of Amapá, repeatedly telling the TV cameras that Veja is a “serious and responsible” news publication.

It demonstrably is not. Quite the contrary But as Nassif has pointed out in a number of cases, the ethos argument is an integral part of its “toxic sludge is good for you” marketing strategy.

If you tend to report a lot of nonexistent facts and otherwise perpetrate acts of heinous journalistic incompetence or bad faith, it does not matter. You just keep repeating, “We are excellent journalists,” and get your cronies to repeat it as well. Ad nauseam.

Nassif has made some perceptive comments on the magazine as an importer of what he calls “the neocon style.”

I hope that when he polishes up this series into a book that he will include a chapter that traces the history and characteristics of that “neocon style.”

The infamous remarks of an anonymous White House staffer to Ron Suskind of the New York Times Magazine (above) are perhaps the most succinct state of principles of this contempt for critical collaborative knowledge-seeking, according to which, despite what Sen. Moynihan famously said, one is entitled to one’s own facts, or even to form opinions in the absence of facts.

At any rate, I continue to translate pra inglês ver as I find time. This episode highlights a crucial difference between Brazilian Deep Throats and the Deep Throat source used by Woodstein in Watergate.

Woodstein checked out what their Deep Throat was telling them. The usual procedure: If you cannot corroborate, you cannot vouch for it, and if you cannot vouch for it, you cannot print it in the paper.

Brazilian Deep Throats, on the other hand, are given full editorial control. No fact-checking involved. Fax it in and we will run it. Hillary Clinton performed oral sex with Fidel Castro? Really? Well, okay, if you say so …

A matéria foi bombástica e ajudou a deflagrar a crise do “mensalão”. Uma reportagem de 18 de maio de 2005, de Policarpo Jr., da sucursal da Veja em Brasília, mostrava o flagrante de um funcionários dos Correios – Mauricio Maurinho – recebendo R$ 3 mil de propina (clique aqui)

It was a bombshell of an article and helped unleash the “big monthly allowance” scandal. A report published May 18, 2005 by Policarpo Jr. of the Brasília bureau of Veja showed how Maurinho, an employee of the federal postal service, was caught in the act taking a R$3,000 bribe [URL].

A abertura seguia o estilo didático-indagativo da revista:

The lead graf was typical of the magazine’s [pedantic and moralizing] style:

(…) Por quê? Por que os políticos fazem tanta questão de ter cargos no governo? Para uns, o cargo é uma forma de ganhar visibilidade diante do eleitor e, assim, facilitar o caminho para as urnas. Para outros, é um instrumento eficaz para tirar do papel uma idéia, um projeto, uma determinada política pública. Esses são os políticos bem-intencionados. Há, porém, uma terceira categoria formada por políticos desonestos que querem cargos apenas para fazer negócios escusos – cobrar comissões, beneficiar amigos, embolsar propinas, fazer caixa dois, enriquecer ilicitamente.

“Why? Why are politicians so eager to get appointed to government posts. For some of them, the post provides them with visibility that helps them with their election campaigns. For others, it is an efficient way of getting an idea, a project, a specific public policy, off the drawing board. These are the well-intentioned politicians. But there is a third category composed of dishonest politicians who seek government appointments merely in order to do dirty deals — charge commissions, benefit their cronies, pocket bribes, launder money into slush funds, get rich quick.”

A revista informava que tinha conseguido dar um flagrante em um desses casos na semana anterior:

The magazine reported that it had managed to catch one of the dishonest politicians in the act the previous week:

“Raro, mesmo, é flagrar um deles em pleno vôo. Foi o que VEJA conseguiu na semana passada.’

‘It is a rare thing, indeed, to catch this sort of bird on the wing. But that is what VEJA managed to do last week.”

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Ecce Veja: “Scandal of the Blackmail Dossier!”

Posted by Colin Brayton on March 29, 2008


The Editora Abril: A media monopoly dedicated to the art of the gabbling ratfink. “The Authoritarian Temptation: The PT’s attempts to monitor and control the press, television and culture.” Translation: “Dilma could decide those zero-down spectrum concessions we got were the fruit of a skeevy plundering of the commonwealth! Bork her with all you’ve got!

Blog do Desemprego Zero notes that Veja magazine (Brazil) had run a story this week charging that the governing party prepared a “dossier” on the previous government in order to “blackmail” a congressional probe that is (not very energetically) looking into the use (and alleged abuse) of corporate credit cards by government employees to pay their per diem allowances.

See

A huge tempest in a teapot has ensued. Veja’s standard shtick is a martyrdom narrative about the Stalinist tyranny of the Lulo-petista supermajority! (Recent polls show 73% approval for the stumpy lawn-gnome with the missing finger who runs the show here.)

A drunk friend of ours — not a voter for the governing party here, either — goes into an inspired rant the other evening over a table full of drained Itaipavas.

The rant concerned how Congress wastes all its time on bullshit parliamentary commissions of inquiry (CPIs) into bullshit “scandals,” based on bullshit — Veja magazine is a something of a perpetual bullshit factory — out of purely bullshit political motives, instead of actually getting things done.

Hard not to sympathize with that point of view.

Our poor friend is so drunk and angry because Brazil’s anachronistic labor laws turned a simple work-related temporary disability into a Kafkaesque nightmare. There are legislative proposals on the table to improve the situation, but — our friend again — no one is debating and voting on them because they are too busy with their bullshit CPIs!

The Veja story is illustrated, I gather, with three printouts from a highly confidential, password-protected executive branch database on spending by government officials. The President’s expenses are not published for security reasons, I understand.

Veja did not reveal the source of the leak. Veja never reveals its sources on anything it prints, it seems like.

Veja did not think it needed to tell us, for example, that it source on the sex scandal involving a certain Sen. Calheiros of Alagoas (what is it about Alagoas, anyway?) was the palimony attorney of the senator’s baby mom — who also negotiated the baby mom’s tasteful, er, spread in Playboy Brasil, Veja’s sister publication …

Rule of thumb: Anonymously sourced stories, where no good reason is given for granting anonymity, have a way of turning out to be, ahem, not so trustworthy. Wake when someone is willing to go on the record.

Just ask the “former Hill aide” who told Judy Miller about the aluminum tubes and Bob Novak about Valerie Plame. He got jail time.

A Veja desta semana faz uma denúncia gravíssima: o Palácio do Planalto está querendo quebrar o monopólio da Veja de preparar dossiê. A Veja pode grampear divulgar dados sigilosos, divulgar grampos, chantagear. Aliás, uma regra de ouro que deve ser aprendida é: quando a denúncia contra os tucanos e “democratas” é dossiê e o que importa é a (i) legalidade e a “(má) intenção da obtenção e da divulgação do dossiê, quando é favorável ao PSDB/PFL, é relevante apenas o conteúdo da denúncia, não é importante nem mesmo se a denúncia verdadeira ou não.

Veja magazine has made a very serious charge: That the federal presidency wants to break up Veja‘s monopoly on ginning up dossiers. Veja can bug people, publish confidential information, publish wiretap transcripts, blackmail. But there is a golden rule that must be learned: When the charges weigh against the [PSDB] and [ex-PFL], what matters is the (il)legality of the dossier and the (evil) intentions behind publishing it. When it is favorable to the PSDB/PFL, what matters is the content of the dossier alone, whether the charge made in the dossier is true or not.

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Black Gold, Tupi Tea: Petrobras Announces the Carioca Field

Posted by Colin Brayton on March 29, 2008

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No jokes about the Bacia de Pelotas, please.

And then one day he was shootin’ at some food
When up through the ground came a’bubblin’ crude
Oil, that is. Black gold. Tupi tea.
–”The Ballad of Jed Clampett”

Petrobras descobre outro poço na Bacia de Santos: “Petrobras discovers another hydrocarbon reserve in the Santos Basin.”

Will Paulo Maluf take credit for having the vision to go looking for this one as well?

The, ahem, colorful and reputedly larcenous on a mass scale local politician ran TV ads after the first Santos Basin discovery trying to link the deepwater discoveries to his infamous dictatorship-era (inland) drilling boondoggle, Paulipetro.

My wife laughed until milk shot of her nose when that came on the TV during the mandatory political advertising slot.

A Petrobras encontrou mais um reservatório de petróleo e gás abaixo da camada de sal, em área ultraprofunda, na Bacia de Santos. Foi no bloco BM-S-8, ao sul das reservas gigantes de Tupi, considerada um megacampo de petróleo, com um volume estimado entre 5 bilhões e 8 bilhões de barris.

Petrobras has found another gas and oil reserve below the salt layer in very deep waters in the Santos Basin. It was in Block BM-S-8, south of the giant Tupi reserves, which are considered a megareserve with volume estimated at between 5 billion and 8 billion barrels.

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Current Content Downloads: Getting Down To Business

Posted by Colin Brayton on March 29, 2008

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Remember I said I had a client who said they maybe wanted me to work as a local stringer, scouting debt and equity issuance, restructuring, changes of control, buybacks, and all those sorts of signals that companies might be for sale, or looking to go on a shopping spree?

Sure, I said. I am perfectly happy to spend my days scouring CVM disclosures and other official sources of corporate actions, the forward calendar of the competition regulator, the Official Diaries, the local business press (which mostly all cover the same exact stories: Pick a decent one and you have pretty much read them all, with only marginal exceptions). And what have you.

Now, this client thinks it might want me to actively pursue such leads rather than just digging them up. Produce “forward-looking deal intelligence.”

Reality-test market rumors.

Get acquisitive companies to point at their targets. Beard sovereign funds at the luggage carrel at the airport and ask them, “So, what are you going to spend all those yummy petrodollars on?”

Which sounds like a lot of fun, although I warned this client: I am not someone who brings a fat Rolodex to this beat. I would have to spend months handing out business cards to in order to build one.

And besides, the subscription newsletter Relatorio Reservado (Brazil) is already doing a pretty bang-up job of “forward-looking deal intelligence” here, I find. Today, for example, it reports:

Mal desembarcou no Gávea Investimentos, o Harvard Management Company já pensa em reduzir à metade sua parte na empresa de Armínio Fraga, em torno de 12%. A operação está ligada a um reposicionamento internacional do fundo.

Harvard Management Company has scarcely landed at Gavea Investments, the investment management firm of former central bank president Arminio Fraga, and is already thinking of reducing its 12% stake by half. The adjustment is a product of the fund’s international repositioning.

Didn’t I read in the W$J that the vast Harvard endownment — $35 billion, is it? — is now under new management?

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Rio: Dancing the Dengue Merengue

Posted by Colin Brayton on March 28, 2008

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Aedes aegypti: metrosexual bloodsucker with a diversified portfolio of disease transmissions.

In Rio, the mortality rate for hemmorhagic dengue is some 20%, while WHO considers a 1% mortality rate acceptable. “It is terrifying. I have never seen such a high mortality rate anywhere, except in the Philippines in the 1950s,” said epidemiologist Boulos of USP.

Dengue is the most important arthropod-borne viral disease of public health significance. Compared to nine reporting countries in the 1950s, today the geographic distribution includes more than 100 countries worldwide. Many of these had not reported dengue for 20 or more years and several have no known history of the disease. The World Health Organization (WHO) estimates that more than 2.5 billion people are at risk of dengue infection. Most will have asymptomatic infections. The disease manifestations range from an influenza-like disease known as dengue fever (DF) to a severe, sometimes fatal disease characterised by haemorrhage and shock, known as dengue hemorrhagic fever/dengue shock syndrome (DHF/DSS), which is on the increase. Dengue fever and dengue haemorrhagic fever/dengue shock syndrome are caused by the four viral serotypes transmitted from viraemic to susceptible humans mainly by bites of Aedes aegypti and Aedes albopictus mosquito species. Recovery from infection by one serotype provides lifelong immunity against that serotype but confers only partial and transient protection against subsequent infection by the other three. First recognised in the 1950s, it has become a leading cause of child mortality in several Asian and South American countries. –Emerging Themes in Epidemiology, 2005, 2:1

CartaCapital magazine (Brazil) has this on the (0ther) public health crisis that has dominated the front pages and nightly newscasts lately here in Brazil: the current dengue outbreak in Rio de Janeiro.

Rio mayor Cesar “The Naked (Chairman)” Maia and his administration suffered some public derision after being quoted as denying, initially, that the incidence of the disease was as serious as health experts were claiming. See also

Viral Political Marketing Notes: “The Naked Mayor Blogs While Rio Burns With Fever”

The governor of the state of Rio, Mr. Cabral, took the opposite tack (this in an election year, after all), issuing an apology for the inadequate preparation and response by state public health authorities.

Ao contrário do que aconteceu com o surto de febre amarela no ano passado, quando o noticiário exagerou os riscos a que a população estava exposta, a epidemia de dengue que atinge o Rio de Janeiro é mais perigosa do que as anteriores. Pela extensão verificada até o momento – desde o início do ano, 41,9 mil pessoas foram infectadas no estado –, mas principalmente devido à alta taxa de mortalidade nos casos registrados. Mais de cem mortes por suspeita de dengue foram notificadas até agora, das quais 54 foram confirmadas pelas autoridades de saúde. A capital fluminense concentra a maior parcela dos casos – contabiliza 31 mortes e mais de 28,2 mil casos, acima do registrado ao longo do ano passado. Para agravar a situação, desta vez a dengue mata em um ritmo cinco vezes maior do que o verificado na última epidemia. Em 2002, o estado registrou 91 mortes para mais de 255 mil infectados. Em algumas localidades, o índice chegou a ser 20 vezes superior ao limite tolerado pela Organização Mundial da Saúde (OMS). A epidemia atual também marca o retorno de uma variedade de vírus ausente na região desde os anos 90.

Unlike the upsurge in yellow fever last year, when the news media exaggerated the risk to the population, the dengue epimedic in Rio is more dangerous than previous ones. More dangerous because of the extent of the outbreak verified to date — 41,900 persons infected since the beginning of the year — but mainly due to the high mortality rate among the cases recorded. More than 100 deaths suspected of being related to dengue have been reported to date, of which 54 have been confirmed by public health authorities.

On the great yellow fever freak-out of 2008, see also

For what is worth, personally, here in Sao Paulo, dengue is a much bigger worry for us personally, and for friends with children (and cachaça-compromised livers).

Once you fight through all the gibbering bullshit in the news media, the fact is that dengue is solidly urbanized now, while yellow fever (for which there is a vaccine) is only of major concern if you are planning on going tromping through the thick jungles.

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Covering the Bases: “Spaniards and Mexicans Race to Complete the Triple Play”

Posted by Colin Brayton on March 27, 2008


Vigilante consumerdom: angry Argentines spank the Spaniards. Source: Iconoclastas.

DCI: Comércio, Indústria & Serviços (São Paulo, Brazil) reports: Spaniards gird their loins against the Mexicans in Brazil as the Tupi consider whether to create a homegrown telecom behemoth with the proposed merger of Oi and Brasil Telecom.

A Net Serviços, controlada pela Telmex, uma das empresas de Carlos Slim, empresário que também tem controle sobre a Claro e a Embratel, avança sobre o market share do mercado de Internet em banda larga em cima das líderes do segmento, como Telefônica, Brasil Telecom (BrT) e Oi, respectivamente. Ao perceber o avanço da concorrente, a Telefônica se prepara para contra-atacar, e especialistas estimam que ela deverá investir cerca de R$ 700 milhões em banda larga (Sppedy [sic]) este ano, valor superior aos R$ 500 milhões aplicados no serviço ano passado, para manter a liderança.

Net Serviços, controlled by Telmex, one of the companies belonging to Carlos Slim, who also controls Claro and Embratel, is gaining market share in broadband Internet at the expense of the market leaders: Telefônica, BrT and Oi, in that order. Noting that its competitor is gaining on it, Telefônica is preparing a counterattack, and analysts estimate it will invest some R$700 million in Speedy broadband this year, an increase over the R$500 million it invested last year, in order to maintain its leadership position.

The deal aspect of the story is a bit over my head, let me make it clear from the start. The strategic rationale for allowing a Brazilian megaoperator to form is said to be a desire to reassert the balance of power in the Treaty of Tordesilhos-Tordesillos.

Telecom is strategic, and they say Brazil would like to have a homegrown multinational in this sector, generating an international market for homegrown Tupi technology and technological know-how. That is how I vaguely understand the issue. I need to study it more.

Meanwhile, here is a local and personal consumer angle: We have Net cable broadband — Telmex shares the venture with Globo, I understand — at home, as part of a “double-play” package. And we are keeping a careful eye on the developing options for “triple play” — boob tube, VoIP telephony and broadband internet. Portability of our current phone number is a major factor in the decision (which is the kind of decision my wife tends to make, by the way.)
We had the Cablevision triple play back in Brooklyn and were very happy with it. Relative to local wage scales, furthermore, it was about four times cheaper. At least.

My wife used to have Speedy aDSL and, like many users we know, tended to cuss the service endlessly and bitterly. It tended to drop her from the network randomly and often.

Telefônica, the “natural” telephone monopoly here in São Paulo, leads the Procon rankings in consumer complaints.

Segundo Julio Püshel, analista sênior do Yankee Group, consultoria voltada a telecomunicações, um dos grandes pontos de a Net ter adquirido musculatura para chamar a atenção da concorrência é ter criado o pacote triple play (3 serviços em 1), que reúne Internet em banda larga, telefone fixo e TV por assinatura. No entanto, Püshel aponta que no final do ano passado, a Telefônica percebeu o potencial do negócio e passou a oferecer um pacote parecido, o Trio, com os mesmos serviços.

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Nova Bolsa: Brazilian Bourses Joining Forces

Posted by Colin Brayton on March 26, 2008

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Pregão: Where the grana changes hands.

Gazeta Mercantil (Brazil) puts the story on the wire before we early risers have even had our café da manhã:

SÃO PAULO, 26 de março de 2008 – A Bovespa Holding anunciou hoje a fusão com a Bolsa de Mercadorias e Futuros (BM&F), que resultará na formação de uma entidade provisoriamente denominada de Nova Bolsa. A companhia será uma empresa aberta, registrada na Comissão de Valores Mobiliários, e cujas ações serão negociadas no Novo Mercado.

Bovespa Holding, [which owns and operates the Stock Exchange of São Paulo, Brazil's principal trading venue] announced today a merger with the BM&F (commodities and futures exchange) that will result in a new entity provisionally known as the Nova Bolsa [ the "new bourse"]. The merged company will be publicly traded, registered with the Brazilian securities regulator and with shares traded on the Novo Mercado.

The NM is a tiered listing segment for shares of companies that voluntary agree to meet corporate governance standards exceeding local legal requirements.

Serão procedidas operações de reorganização societária que resultarão na emissão de ações ordinárias da Nova Bolsa para os acionistas da BM&F e da Bovespa Holding, na proporção de 50% para cada companhia. Adicionalmente, os acionistas da Bovespa Holding receberão pagamento de R$ 1,24 bilhão.

Share restructuring transactions will be carried out whereby shareholders of the two bourses will both receive 50% of the common shares in the Nova Bolsa. Bovespa Holding shareholders will receive an additional R$1.24 billion in cash. 

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Electrical Shocker II: “CESP Generation Privatization Falls Through”

Posted by Colin Brayton on March 25, 2008


AES Eletropaulo distribution grid

Empresas não depositam garantias e leilão da Cesp fracassa: “Bidders don’t post bond and CESP privatization auction falls through.”

SÃO PAULO – As empresas pré-qualificadas para o leilão de privatização da Cesp não depositaram as garantias financeiras dentro do prazo estipulado pela Companhia Brasileira de Liquidação e Custódia (CBLC), que ia até o meio-dia de hoje. Com isso, o leilão, marcado para amanhã na Bovespa a partir de um preço mínimo de R$ 6,6 bilhões, fracassou.

The companies that prequalified for the privatization auction of the State Electrical Co. of São Paulo did not deposit financial sureties by the deadline specified by the CBLC (clearning and settlement bank), which was noon today. With that, the auction, scheduled for tomorrow at the Bovespa with a minimum price of R$6.6 billion, fell through.

Estavam pré-qualificadas as empresas Alcoa, Tractebel, CPFL Energia, Neoenergia e Energias do Brasil. As ações da Cesp têm a maior queda do Ibovespa, despencando 16,73%, para R$ 32,30.

The prequalified bidders were Alcoa, Tractebel, CPFL Energy, Neoenergia and Energias do Brasil. CESP shares were the leading loser on the Ibovespa index, plummeting 16.73% to R$32.30.

Ouch.

So what now?

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Brazil: “Businesses Run on the Medici Model Are Better!”

Posted by Colin Brayton on March 25, 2008

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“Surprise! Family businesses are better. More profitable, better share price, growing productivity — no one can beat the financial health of family-controlled enterprises, reveals an exclusive study.” Source: IstoÉ Dinheiro, October 10, 2007.

Empresa familiar tem desempenho superior às companhias de capital aberto: Época Negócios (Editora Globo) reprises a cover story from several months ago in the rival IstoÉ Dinheiro.

“Family businesses outperform public companies!”

Reprises it almost word-for-word, it seems to me, in terms of its basic argument, though with different business cases (personagens, as they say here) to illustrate the thesis.

Different business cases as in: The two cases it discusses are not case studies about Brazilian firms.

Which is peculiar thing to run across.

You buy a Brazilian business magazine hoping to learn more about Brazilian businesses, but you wind up learning about Dutch and Swiss businesses instead.

I still have a lot to learn about this place, but there is one thing I can tell you for sure: This here ain’t freaking Holland. (Holland has better flood control, for one thing.)

Época apparently has a contract with Swiss B-school IMD to provide it with all its analytical articles, as is the case here.

This is striking, when you look at their story lists on the Web site. Straight news is locally gisted from local press releases, basically. News analysis is produced by some blond guy sipping hot chocolate in an Alpine chalet, après ski.

Empresas familiares têm sua própria complexidade: além de lidar com questões relativas ao negócio, têm também de lidar com a questão da propriedade e com questões familiares. Essa complexidade dá a elas uma força tremenda — as famílias têm valores e se preocupam com as futuras gerações e com a sustentabilidade da empresa. A propriedade do negócio é de caráter independente e de longo prazo; além do mais, a empresa pode recorrer a modelos de negócios não convencionais. Por causa disso, as empresas familiares têm, muitas vezes, desempenho superior às companhias de capital aberto.

Family-run businesses have their own complexity: Beside having to deal with business issues, they also have to deal with questions of ownership rights and family issues. This complexity gives them tremendous strength — families have values and worry about future generations and the company’s sustainability.

There was an interesting counterpoint to this thesis this week in the papers here in Brazil:

The story of a family-owned Minas Gerais iron mining company with an 82-year-old patriarch, a humble, simple mineiro who had walked to work at his modest offices every day since the day Getúlio Vargas shot himself.

It received a billion-dollar offer it could not — and did not — refuse. The heirs and scions of the patriarch were reportedly screaming loudly, “Pops, take the money and run!”

More on that in a bit.

Ownership of the business is independent and long-term; what is more, the business can use unconventional business models. For that reason, family business often outperform public companies.

On family businesses with unconvential business models, see also

Globo’s affiliate in Bahia, for example, is owned and operated by a squabbling clan of persons all named Magalhães.

As in the current Senator Magalhães Jr. and Congressman Magalhães III.

Keep that unconventional business model in mind as the Jarndyce v. Jarndyce-like dispute over the estate of the “King of Bahia” plays out.

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Electrical Shocker: “Light Gives Up On CESP Fight”

Posted by Colin Brayton on March 25, 2008

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Call options on São Paulo’s state electricity generator. Source: Bovespa. Click to zoom.

Light desistiu de leilão da Cesp devido a risco do fim de concessões em 2015, diz executivo: “Light gives up on CESP privatization auction due to risk of concession nonrenewal in 2015, executive says.” Valor (Brazil) reports.

I have not had time to really study this deal — my job at the moment is to study other things — but I can note that CESP’s share price sank 10% yesterday on the eve of the privatization auction on doubts that the state government of São Paulo will get a decent price for its electrical generator.

And the Mrs. reported heavy pamphleting by unions against the privatization on the streets (she is taking classes at USP). They argue that because other state-controlled firms, such as SABESP (the state sanitation company) own most of CESP, the deal requires legislative approval.

Again: I am not well-informed on the deal, and do not quite understand why, assuming I were a Brazilian (which I am not), I should be for or against the deal. The basic idea, I gather, was to liquidate the asset in order to invest in transportation infrastructure without getting the state into debt. Which is not a wholly insane proposition, it seems to me.

And if you complain that state-owned firms are lousy with skeevy political patronage, which is an argument of the opposition — also not without some basis in fact — well, how about getting the state out of the business, then?

RIO – O presidente da distribuidora de energia carioca Light, José Luiz Alquéres, confirmou que a empresa chegou a analisar as condições para participação no leilão da Cesp, marcado para a próxima quarta-feira. O executivo explicou que a companhia não chegou a se qualificar devido ao risco de que a concessão das usinas de Jupiá e Ilha Solteira – que representam 67% da geração da empresa paulista – se encerre em 2015, sem direito a renovação.

The president of Rio energy distributor Light, Mr. Alqúeres, confirmed that his firm has analyzed the conditions for taking part in the CESP auction, scheduled for Wednesday. He explained that Light did not enroll due to the risk that the concessions for Jupiter and Ilha Solteira — which represent 67% of CESP’s generation — will expire in 2015, without the right of renewal.

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The Morning Brief: Guido Stripped to Speedo By Credit Remarks

Posted by Colin Brayton on March 25, 2008

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Notable subscription package on offer: 12 months of the Valor Econômico daily + 6 months of the CartaCapital weekly for just R$47 (US$27, or some 10% of a minium salary) a month in parcel payments! I find that offer attractive: I already read both of them religiously. The offer seems to imply that someone thinks there are a lot more people out there like me. In other news, the Gazeta Mercantil signs a content partnership deal with the New York Times. As if the New York Times had anything useful knowledge about the price of sausages, chopp and black-market botijões in Itaim Bibi.

If a rumor comes into your possession, better pass it along to the next guy, and quick: It could be lie. –Millôr Fernandes

The Jornal do Commercio (Rio de Janeiro, Brazil) reports: The federal treasury minister insists that he never said what the press here spent the last few days screaming loudly that he said, or at least implied!

Rumor was that the government was contemplating limiting automobile financing to a period of 36 months.

Guido “Guns and Butter” Mantega says it just ain’t so.

We have heard such sharp exchanges between government and the press before, many times.

The most striking example, perhaps, was the rumor that President Squid would seek a third term, like Uribe and Uncle Hugo. There were and are no credible indications that this was anything but a gibbering fairy tale.

But Veja magazine’s designated blogger, for example, shrieked loudly and hysterically against this sinister but nonexistent factoid-phantasm, summoning patriotic Brazilians to take up arms and join the “counter-coup.”

This was the top story on New World Lusophone Bloomberg today as well, which ran the minister’s remarks in their entirety.

I think the arrival of Bloomberg-style business journalism here is likely to raise the level of the game quite a bit.

Help make the jogo a little more bonito.

O governo quer evitar que o crédito e o consumo cresçam de forma insustentável ao longo dos próximos anos, mas não cogita restringir os prazos dos financiamentos, afirmou o ministro da Fazenda, Guido Mantega. Para garantir que o ritmo atual de crescimento da economia não tenha que ser “abortado”, Mantega disse que serão concedidos estímulos para investimentos a setores-chave, como o automobilístico, aço e cimento. O objetivo é evitar descasamento entre oferta e demanda, que contribua para aceleração da taxa de inflação.

The government wants to avoid having consumer credit grow in an unsustainable manner in the next few years, but is not contemplating restricting the terms of financing contracts, said treasury minister Guido Mantega. To guarantee that the current rate of economic growth is not “aborted,” Mantega said incentives will be conceded to key sectors, such as automobiles, steel and cement. The objective is to avoid a disconnect between supply and demand, which tends to contribute to inflation.

O ministro pretende também reunir-se com representantes dos bancos para obter garantias de que o nível de alavancagem das instituições é seguro. Os financiamentos alongados de veículos preocupam especialmente o governo. Especialistas já alertaram sobre o perigo de bolha nesse tipo de crédito.

The minister also intends to me with representatives of the banking sector to obtain guarantees that the degree of leverage being used is at safe levels. Extended auto financing are of special concern to the government. Experts have already warned of a bubble in this type of credit.

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Salvador: From the Files of the Anti-Death Squad Squad

Posted by Colin Brayton on March 24, 2008


Source: Rede TV News, Bahia.

Correio da Bahia (Salvador, Bahia, Brasil) reports:

Apresentados PMs acusados de matar malabarista

Military police accused of killing circus acrobat are [perp-walked] 

Lotados na 39ª CIPM (Boca do Rio), os policiais são suspeitos de integrar grupo de extermínio

Policemen from the 39th CIPM in Boca do Rio are suspected of being members of a death squad.   

See also

Reconhecidos por testemunhas como autores do duplo homicídio, que teve como vítimas o artista circense Ricardo Matos dos Santos, 20 anos, e o assaltante Robson de Souza Pinho, conhecido como “Sapo”, 19, fuzilados em janeiro deste ano na Boca do Rio, três policiais militares foram presos ontem pela manhã na 39ª Companhia Independente, onde são lotados. O caso foi noticiado com exclusividade na edição da última terça-feira do Correio da Bahia.Contrariando informação de que o mandante da execução seria um policial da ativa, a delegada Andréa d’Oliveira Cardoso, coordenadora do Grupo Especial de Repressão a Crimes de Extermínio (Gerce), esquiva-se de fornecer detalhes sobre quem teria encomendado o crime e limita-se a dizer que o contratante seria um policial da reserva. Ricardo foi morto por ter sido confundido com um comparsa de “Sapo”, alvo da ação.

Identified by witnesses as the perpetrators of a double homicide that took the lives of circus artist Ricardo Matos dos Santos, 20, and the armed robber Robson “The Toad” de Souza Pinho, 19, who were shot to death in January of this year in Boca do Rio, three policemen from the 39th Independent Military Police Company were arrested yesterday (March 19), a case reported on exclusively by this newspaper last Tuesday. Contradicting reports that the person who ordered the execution was an active-duty policeman, Oliveira Cardoso of GERCE, the [anti-death squad squad of the state judicial police], avoiding providing details, saying only that the person who commissioned the crime may have been a member of the police reserve. Ricardo was killed after being mistaken for a companion of “The Toad,” who was the target of the attack. 

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Rio de Janeiro: “The JB Busts a Bingo!”

Posted by Colin Brayton on March 24, 2008

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Bada bingo, bada bicho: Vintage roleta. Source: Musem of the Policia Civil [state judicial police], Rio de Janeiro.

In Campo Grande (Western District), gambling continues full-bore at a location disguised as a concert venue. The owner of the illegal bingo reportedly employes a military police sergeant from Santa Cruz as a security guard. In another location, in Vista Alegre, customers even receive receipts for the purpose of claiming income tax deductions. Other clandestine gambling joints reportedly operate in Penha, Taquara and Del Castilho.

The clipping service of the Brazilian Ministério do Planejamento has this, from the Jornal do Brasil — which seems to be on something of a crusade against the illegal gambling joints of Rio de Janeiro.

Mais um videobingo foi estourado na madrugada de ontem, por volta de 1h, na Rua General Polidoro, número 164, em Botafogo (Zona Sul). Policiais do 2º Batalhão da Polícia Militar fecharam a casa clandestina depois de uma denúncia anônima. Apesar de estar em funcionamento na hora em que a polícia chegou, o responsável pelo estabelecimento não foi identificado. Sete idosos flagrados jogando foram liberados após serem identificados.

Another “videobingo” was shut down last night around 1 a.m. at 164 General Polidoro St. in Botafogo (Southern Zone). Police from the 2nd Military Police Battalion closed the underground gambling house after receiving an anonymous tip. Though it was in full operation when the police arrived, the person in charge of the establishment was not identified. Seven senior citizens caught gambling were released after being identified by police.

Do local, seis máquinas caça-níqueis em funcionamento e três quebradas foram levadas para o depósito da Receita Federal. Na sexta-feira, mais de 400 máquinas de caça-níquel haviam sido apreendidas pela PM no Catete.

Six functioning “nickel-hunter” and three broken ones were taken to a federal tax authority warehouse. On Friday, more than 400 “nickel-hunters” were seized by the state military police in Catete.

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The Ecuadoran Border Incident: Smart Bombs And Stone-Age Diplomacy?

Posted by Colin Brayton on March 24, 2008

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SuperTucano: The Piper Cub of death.

Bogotá maintains that its air force used ten conventional bombs in the operation, dropped from Colombian territory by 5 Brazilian-made SuperToucan fighters and three U.S.-made A-37s. The El Comercio daily of Quito reported than an Ecuadoran air force investigation established that 10 GBU Paveway II 500-lb. bombs, similar to the ones used in Iraq, were used, and “could not have been transported by the planes Colombia has.”

Gazeta Mercantil (Brazil) carries the AFP wire story: Southern Command did help zap the FARC No. 2, who was allegedly negotiating the release of Ingrid Betancourt, only with brains, not brainy bombs.

Your tax dollars at work?

BOGOTA (AFP) – 24/03/2008 – O ataque de 1º de Março da Colômbia a um campo rebelde em território do Equador foi apoiado pela inteligência dos Estados Unidos, mas não foram usadas bombas americanas, contou à AFP um oficial colombiano de alto escalão, confirmando as especulações sobre o assunto.

The March 1 attack on a rebel camp on Ecuadoran soil was supported by U.S. intelligence, but no U.S. bombs were used, a high-ranking Colombian official told AFP, confirming speculations on this issue.

It is really more of a denial than a confirmation.

“Não usamos armas dos Estados Unidos, mas apenas informações que compartilham agora conosco”, disse ele pedindo para não ter o nome divulgado.

“We did not use U.S. weapons, but only the information they now share with us,” the source said, asking that his name not be used.

“Hoje, conseguimos obter dados nítidos de coordenadas (localização), conversas e identificação de redes de apoio”, acrescentou.

“Now, we can get accurate data on coordinates, communications, and the identification of support networks,” he added.

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Inside the Fedex of Marching Powder: “The Mules of the Rio Solimões”

Posted by Colin Brayton on March 23, 2008

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Flowing into the biggest muddy of them all: The Solimões meets the Rio Negro, “seen from space.” Source: Wikipedia. Where did Wikipedia get it? Doesn’t seem to feel the need to tell you.

A Tarde (Salvador, Bahia) reports today: “Brazilian feds say drug traffic rules the mighty Amazon.”

A Tarde seems like an awfully decent paper. Goes places, finds stuff out there, and gives it to you straight, no chaser or Rohypnol.

Unlike a lot of crude Brazilian “perp walk” journalism — all the major TV networks practice it sadistically in spades — it does not humiliate or prejudge the criminal suspects, exploiting their image, identity or the pathetic encrenca they find themselves in.

Tabatinga (AM) – Todos os meses, pelo menos 10 pessoas são presas pela Polícia Federal (PF) em Tabatinga (AM) levando pequenas cargas de cocaína pelo Rio Solimões. Com a droga dentro de bagagens, no interior de objetos ou amarradas com fita adesiva junto ao corpo, os “mulas” buscam a sorte no varejo do tráfico, tentando passar a salvo das barreiras policiais ao longo do caminho até Manaus e outras capitais.

Dateline Tabatinga, Amapá: Every month, at least ten persons are arrested by the federal police here carrying small shipments of cocaine along the Solimões river. With the drug hidden in their baggage inside objects or taped to their bodies, the “mules” are trying their luck in the retail drug trade, trying to get past police barriers set up along the roads to Manaus and other regional cities.

Se forem bem sucedidos, podem ganhar de R$ 1,5 mil a R$ 3 mil, dependendo da quantidade levada e do destino final. Mas quando são pegos, seguem para a delegacia da PF, onde são ouvidos, e depois vão para o presídio de Tabatinga, local de moradia pelos próximos três anos ou mais, onde 213 pessoas cumprem pena – 90% por tráfico.

If they succeed, they might make R$1,500 to R$3,000, depending on the quantity and the final destination. But when caught, off they go to the PF, where they are questioned, and then on to the Tabatinga prison for three years or more. There are 213 prisoners there, 90% of them in for trafficking.

Neste sábado (21), dois mulas foram presos pelos policiais federais da Operação Cobra, na Base Anzol, o último e mais temido posto da PF no Solimões, onde todas as embarcações são obrigadas a parar e são revistadas. Uma mulher que havia saído de São Luís (MA) e chegado a Tabatinga de avião levava três quilos de cocaína atadas ao corpo.

On Saturday, March 21, two mules were arrested during Operation Cobra, in Base Anzol, the latest and most feared federal outpost along the Solimôes, where all vessels have to stop and submit to a search. A woman traveling from São Luis in Maranhão who arrived in Tabatinga by air has three kilos of cocaine taped to her body.

Aos 28 anos de idade, bonita e bem vestida, ela poderia não despertar a suspeita dos policiais, mas começou a passar mal, devido ao excesso de aperto da droga junto ao peito, e acabou presa. Na delegacia, disse que era sua primeira viagem e ficou aos prantos, quando deu a notícia por telefone à família.

At 28, pretty and well dressed, she might not have aroused suspicion, but she started to feel unwell because the drugs were squeezing her chest too tightly, and wound up arrested. At the federal precinct, she said this was her first trip and started wailing when she informed her family by phone.

“Se eu pensasse que isso poderia ter acontecido na minha vida, jamais teria entrado nessa. Só entrei pelo dinheiro e porque pensei que seria fácil. Eu precisava terminar a minha casa”, desabafou ela, que é casada e tem uma filha de quatro anos. Pelo serviço, ganharia R$ 3 mil para levar a droga até São Luís.

“If I had thought this could happen in my life, I would never have gotten into it. I only got into it for the money and because I thought it would be easy. I needed to finish building my house,” [blurts] the woman, who is married and has a daughter, 4. She was to get R$3,000 to take the drugs back to the capital city of Maranhão.

I am guessing that is something like a 5% commission on the uncut wholesale price. Maybe less. Just a very rough guess, cannot remember where I saw the numbers on this.

Welcome to the land where risk transfer is an extreme sport.

No mesmo barco, foi pego outro “mula”. Morador de Tabatinga, 21 anos de idade, estudou até a quarta série e trabalhava como mototaxista na cidade. É sua primeira prisão. Levava 1,125 kg de cocaína atado nas pernas e nas coxas. Moreno, estatura média, conta que é descendente de índios kokama e que não tinha nenhum plano específico sobre o que fazer com os R$ 1,5 mil que ganharia para transportar a cocaína até Manaus.

Another mule was captured on the same boat. The Tabatinga resident, 21, attended school through the fourth grade and works at a motorcycle taxi service in the city. It is his first arrest. He was carrying 1.125 kg of cocaine taped to his legs and thighs. Dark, of medium stature, he says he is descended from Kokama Indians and had no specific plans for the R$1,500 he was to earn for transporting the coke to Manaus.

“A situação não estava boa. O trabalho está difícil. Então resolvi fazer esse negócio”, disse ele, na delegacia, enquanto esperava algemado para ser ouvido. “Na hora vale a pena, mas agora vejo que não vale. Estou arrependido, não quero esta vida mais não”, afirmou ele, irmão mais velho de um total de seis.

“It was not a good situation. Work was hard. So I decided to do this deal,” he said at the PF precinct, waiting, handcuffed, to have his statement taken. “It was worth it at the time, but now I see it wasn’t. I am repentant, I don’t want this life any more,” said the man, the oldest of six brothers.

A família mora em uma casa simples, onde só se chega depois de passar por ruas esburacadas e cobertas de lama. Ao saber da prisão, a mãe não demonstrou surpresa. “Já me falaram que tinha uns colegas dele chamando para viajar, para levar bagagem. Ele me perguntou e eu disse não. Mas ele não quer ouvir, prefere o conselho dos amigos. Então é isso o que acontece.”

The family lives in a simple home that can only be reached by traveling along potholed streets covered in mud. Learning of his arrest, the man’s mother did not seem surprised. “They told me he had some buddies of his trying to get him to travel, to carry weight. He asked me and I said no. But he wouldn’t listen, he preferred to listen to his friends. So this is what happens.”

Boys, this may sound like a cliché, but you really probably should listen to your mother.

A mulher contou que recebia o auxílio do Bolsa Família referente a três dos filhos que freqüentam a escola, mas que o benefício foi suspenso, sem nenhuma explicação. Atualmente, sobrevive da venda de curitis (picolés caseiros) de frutas. “Agora, com o filho preso, complica ainda mais para mim.”

The woman said he received the federal Bolsa Familia subsidy for her three school-age children, but that the benefit was suspended without explanation. Currently, she survives selling homemade fruit popsicles. “Now, with my son in jail, this makes things even harder for me.”

The Bolsa program recently expanded to cover kids up to 17, I think.

School attendance is compulsory. The program is often criticized as “populist electioneering,” and news articles often suggest it it rotten with waste, fraud and abuse.

Generally waved around by politicians from states that seem to make the news a lot over cases of “working conditions analogous to slavery.”

And who tend to orate finger-waggingly to the effect that the crackdown on organized criminals who funded their campaigns is a Communist coup d’etat of some sort.

These people are something else. You can argue all you want over the economics of privatization and the “burden the State poses to the market” — and get a sympathetic hearing from me. These questions are thorny. I do not have the answers.

But these people are positively freaking medieval.
The carvoeiros of the region, who do the drudge work of felling the mata and making BBQ charcoal out of it — an eerie site, those beehive-shaped ovens smoking away like little quilombos in the vastness — also cite lack of economic options.

Also an illegal business.

Also being tackled with a fair amount of oomph by the federal police now, especially in Pará. Stay tuned. That situation is already getting interesting.

Ela culpou a falta de trabalho em Tabatinga pelo grande número de jovens envolvidos com as drogas. “Eles não têm emprego. Aí aparece uma ocasião dessas e, quem é meio bobo, vai. Muitas vezes dá certo. Muitas vezes não.”

She blames the lack of work in Tabatinga for the large number of young people involved in drugs. “They have no work. So this comes up and the kind of dumb ones go for it. A lot of times, it works out. A lot of times, it doesn’t.”

E mesmo para os “mulas” que não são presos, o ganho com o tráfico acaba não valendo a pena. O mototaxista que levou nossa reportagem até a casa do garoto contou, com naturalidade, que também já havia feito o transporte de oito quilos de cocaína para Belém (PA), há cerca de quatro anos, mas que praticamente nada sobrou dos R$ 3 mil que ganhou. “Com o dinheiro, eu comprei roupas, um aparelho de som e fiz uma casinha de quatro por cinco, mas como não tinha emprego, vendi e fui morar em outro lugar. O meu dinheiro acabou em nada.”

The same goes for the “mules” that escape arrest. What they earn from trafficking is not worth the trouble in the end. The mototaxi man who took us to the young man’s house told us, frankly, that he himself had transported 8 kg to Belém some four years ago, but that hardly anything was left of the R$3,000 he earned. “With that money, I bought clothes, a stereo, and built a little 4m by 5m house, but since I was out of work, I sold it and went to live elsewhere. My money went nowhere.”

Para o delegado federal em Tabatinga Giovanni Vicente Fontes Lopes, os “mulas” são apenas a parte aparente de um grande esquema criminoso. “O ‘mula’ pode ser classificado como a pessoa que é a ponta do iceberg. Ele se forma dependendo da situação social do país, e na cidade de Tabatinga, especificamente, por falta de opção. Talvez seja necessário que se dê mais atenção a esse tipo de ocorrência que vem acontecendo aqui freqüentemente. É um problema social.”

Tabantinga federal police commander Fontes Lopes says the mules are just the visible part of a big criminal enterprise. “The ‘mule’ is the tip of the iceberg. The ‘mule’ is created by the social situation of Brazil, and here, specifically, by lack of options. It may be necessary to pay more attention to this type of case, which is happening more and more often. It is a social problem.”

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Brazil: “Interview With The Bandido”

Posted by Colin Brayton on March 23, 2008

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Nana-nana-nana-nana … Batman! Caption: “City councilmember arrested is accused of using the Batman symbol in areas that pay for ’security’ (Photo: TV Globo archives)
.” Source: G1/Globo (Brazil).

“This is not a war like everyone in Brazil says. The Third Command, the CV, the ADA, and the Militia, which is made up of cops and ex-cops, are not friends, and certainly don’t hold hands, but there are also not enemies. Each has its own role to play. There  are fallings-out sometimes,and when this happens the result is what everyone knows about: Bullets. Lots of bullets,” “Zinho” explains.

24 Horas News (Mato Grosso) interviews “Zinho.” The context is not clear, but apparently the fellow was arrested in Cuiabá. You read more and more about Rio gangsters buying property and trying to live in discrete comfort in other regions of the country.

O homem que trás as marcas de dezenas de tiros pelo corpo, seis balas ainda estão alojadas, uma delas entre a clavícula, Luciano Fernandes, o “Zinho“, começou a conversa mentindo e falando de cabeça baixa. “Só estudei até a sétima séria“. Mentira. Logo em seguida ele levantou a cabeça e rebateu: “Eu completei o segundo grau“, para justificar a fala bem coordenada.

A man with the marks of dozens of bullet wounds on his body, and six bullets still lodged inside him, one of them in his collarbone, Luciano “Zinho” Fernandes began our conversation by lying and talking with his head down. “I only studied up until the seventh grade.” Lie. He soon lifts his head and responds, “I finished high school,” to explain why he is so well-spoken.

Nice lede graf. Simple, yet vivid. Mato Grosso and other regional journalism is a very interesting phenomenon. You read very little about the “thick jungles” in the major metrosexual news agencies — much as you read very little about Brooklyn (a couple of million voters, after all) in the Grey Lady.

“Zinho” conta que teve que matar uma vítima de assalto como se conta uma história qualquer. “Tive que matar. Eu fui apenas asssaltar o cara. Só que ele reagiu e me atingiu seis vezes. Eu escapei e ele morreu. Não gosto de matar inocente, mas foi o jeito. Era ele ou eu“.

“Zinho” recounts how he had to kill a robbery victim as though it were nothing extraordinary. “I had to kill him. I was just going to rob the guy, but he fought back and hit me six times. I got away and he died. I do not like to kill innocent people, but that was the way it was. It was him or me.”

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Brazil: “Electric Company Auction Is Generating Steam Heat”

Posted by Colin Brayton on March 23, 2008

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“Cat-yanker in a judge’s robes”: Editorial cartoon, July 27, 2007, Folha de Acre. “Judges Adair José Longuini and Regina Longuini, to the astonishment of Acrean society, are being accused by the Electrical Company of Acre (Eletroacre) of stealing electrical energy at their mansion in the Tropical neighborhood. … Adair won fame for the case of Chico Mendes, who was killed on December 22, 1988, in Xapuri (Acre), sentencing rancher Darli Alves da Silva and his son, Darci Alves Pereira, to 19 years in prison as the parties who ordered and carried out the assassination of the journalist.”

Leilão da Cesp exibe gargalos na energia: TONI SCIARRETTA of the Folha de S. Paulo offers news analysis of the biggest business story in the pipeline at the moment — the auctioning off of CESP, the Electrical Company of São Paulo.

Headline: “CESP shines light on bottlenecks in energy sector.”

There was an interesting analysis of the deal in CartaCapital this week as well. I will to try to clip some more, time permitting. The unions and the PT political party are dead set against it, and shrieking fairly loudly.

The PSDB governor apparently intends to use the proceeds to get a prime objective accomplished without going into debt to do it: Finishing the freaking Rodoanel (“beltway”) highway project, a notoriously eternally rusting “half-sunk, a shatter’d visage lies” Malufian boondoogle in a city that is drowning in automobiles.

(We were walking down the sidewalk the other day by a gas station. A driver wanting to pull into the gas station faster simply drove up onto the sidewalk rather than waiting for the signal to turn so he could move along the roadway. You heard me: The fucker DROVE UP ONTO THE SIDEWALK, proceeding maybe 25 meters along the dedicated foot traffic lane. It was our job to get the hell out of the way or be cut down in the prime of our life.

This is not an exceptional occurrence. The São Paulo pedestrian is fair game. And the game is Grand Theft Auto.)

I cannot claim to be fully informed on this plan, or the long and convoluted history of the debate over privatizations here, but naively speaking, the plan does not seem to be completely insane on the face of it. If it works.

And the federal government (President Squid) is said to support it.

I mean, you can point to privatizations here that seem to have been structured to maximize rent-seeking behavior by the winners of the auctions (Telefreakingfônica). And then there are those theories that you can and should structure privatizations to actually capture those private-sector efficiencies you hear about in a way that would benefit the public.

I just think it would be nice if those theories were correct and this deal produced the intended benefits. Delfim Netto has been making this general point a lot lately, it seems to me.

Me and my patroa are domestic consumers of electrical energy here, after all. And it can be an insane (KAFKAESQUE ATTEMPTS TO CORRECT GROTESQUE BILLING ERRORS!) and sometimes frightening (EXPLODING ELECTRICAL TRANSFORMERS!) experience

Marcado para a próxima quarta-feira, o leilão de privatização da Cesp, a terceira maior geradora brasileira, reabriu as discussões em torno do modelo de comercialização de energia e de regulação do setor no Brasil, país em que um crescimento robusto pode esbarrar na falta de eletricidade.

Scheduled for Wednesday, the auctioning off of CESP, the third largest electrical generation company in Brazil, has reopened debate about the model for marketing energy and regulating the sector in Brazil, a country whose robust growth could come to grief because of electricity shortages.

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Subprime End Times: “Why Brazil Is Not Melting Down (Yet)”

Posted by Colin Brayton on March 22, 2008

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Em terra de cruzeiro, quem tem dólar é rei, o que não é vantagem nenhuma em regime presidencialista. (In the land of the cruzeiro, the man with dollars is king … which in a presidentialist regime does him absolutely no good.) –O Grande Livro dos Pensamentos de Casseta e Planeta (Paraguyan edition, publication date unknown)

Brazil is tending to avoid contagion [from the subprime crisis] because it is still in the “mom and pop shop” phase in terms of its derivatives markets. For the same reason, the relatively rapid expansion of credit in Brazil does not represent any sort of bubble, much less anything remotely like the subprime problem.

Brazilian money speaks Portuguese.

I am continuing to take notes on local business journalists who might make useful reading, applying NMM Maxim No. 1: “Separate the signal from the noise, and ignore the noise.”

This is a more complicated task than it may sound. The Brazilian press is noisier than a squadron of Tupolev-95s flying nap of the earth and sorely in need of engine maintenance. See also

José Paulo Kupfer is an Último Segundo Web columnist on economic affairs.

This column turned up during an idle search for sources of information on securitization and debt issuance and scintillating topics like that.

I have some journalistic bucket work to do in this regard. There is nothing remotely sexy or scandalous about it, but I get a mild kick out of doing it, and someone, after all, has got to cover the waterfront.

Kupfer’s CV:

Nasceu no Rio de Janeiro em 1948. Jornalista desde 1967, foi repórter, redator, secretário de redação, editor-chefe e diretor em diversas publicações do Rio, São Paulo e Porto Alegre. Começou na revista Fatos & Fotos e trabalhou no Correio da Manhã, O Globo, Exame, Jornal do Brasil, Veja, Istoé, Estado de S. Paulo, Zero Hora, Gazeta Mercantil e Foco-Economia e Negócios. Foi colunista de economia da Gazeta Mercantil, da Zero Hora e, nos últimos quatro anos e meio, da revista eletrônica NoMinimo, onde manteve, de dezembro de 2006 a junho de 2007, o blog Econominimo. Foi também consultor editorial do Jornal do Commercio, do Recife, e Tribuna do Norte, de Natal. É, atualmente, chefe de redação do Departamento de Jornalismo da TV Gazeta e comentarista de economia do “Jornal da Gazeta”. Graduado em economia pela USP, é membro do Grupo de Conjuntura da Fipe-USP. Radicado em São Paulo, continua torcedor do Fluminense.

Born in Rio in 1948. Journalist since 1967, he has worked as a reporter, editor, [executive editor, editor in chief and publisher] at various publications in Rio, São Paulo and Porto Alegre. He started out at Fatos & Fotos magazine and worked at the [legendary late, lamented] Correio da Manhã, O Globo, Exame (Editora Abril), Jornal do Brasil, Veja, Istoé, Estado de S. Paulo, Zero Hora, Gazeta Mercantil and Revista Foco: Economia e Negócios.

Is Foco any good? Is it still in print? I should pick up a copy.

He was an economics columnist at the Gazeta, at Zero Hora and, for the last four and a half years, at [the late, lamented] no mínimo, where he wrote the Web column “Economínimo” from December 2006 to June 2007. He also worked as consultant to the Jornal do Commercio of Recife [Pernambuco] and the Tribuna do Norte in Natal (RN, right?). He is currently news director at TV Gazeta and economic commentator for the Jornal da Gazeta. With an econ degree from the University f São Paulo, he is a member of FIPE-USP. A São Paulo resident, he considers to root for Fluminense.

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Ecce Veja: The Designated Blogger on Dantas’ Inferno

Posted by Colin Brayton on March 21, 2008

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Reinaldo “Mr. Hat” Azeredo Azevedo

DIOGENES: The things you must concentrate on are these: always be bold and reckless and jeer indiscriminately at everything, from kings on down. … Speak in a harsh, rough voice … In word, behave exactly like a wild beast. Forget about shame, propriety, moderation.

BUYER: Get away from me! Everything you’ve said is nauseating. It’s inhuman.

DIOGENES: But, listen. It’s so easy. Anyone can do it. No course of study required, no debates, no nonsense. My road is a short-cut to fame …

– Lucan, “Philosophies for Sale”

If anything characterizes our times, it is a sense of pervading chaos. In every field of human endeavor, the windstorms of change are fast altering the ways we live. Contemporary man is no longer anchored in certainties and thus has lost sight of who he is, where he comes from and where he is going. — The American Society for the Defense of Tradition, Family and Property, quoted in my Spinning the World Backwards.

Senior palace officials pressured the official state bank to sponsor events held by the Rede Vida and the Hallelujah Radio Network. It authorized the buying of monthly ads in Primeira Leitura magazine, a publication created by Mendonça de Barros, Minister of Communications under the Cardoso government who is talked about as an Alckmin economic adviser. Recently, Quest Investments, which belongs to Mendonça de Barros, was chosen to manage a new fund for Nossa Caixa. –Folha de S. Paulo, March 2006

Reinaldo Azevedo, the designated blogger of Veja magazine (Editora Abril, Brazil) recently suffered a stinging critique by journalist Luis Nassif, who has been publishing a series of case studies of the magazine that tend to suggest it is chronically, ahem, factually challenged.

Mostly on purpose, out of sheer gabbling contempt for getting the facts straight.

Which is true, in my observation, often enough that I don’t buy any Abril magazines.
See also

Azevedo responds with his characteristic crude, brainless red-baiting and long-winded, self-righteous whining about being a martyr to some sort of vast, murky and diabolical, eternal and world-historical scheme.

Gist: “Respect for factual accuracy is a Communist plot!”

Nassif is absolutely right: This is precisely the kind of claptrap we gringos have been hearing from the neocon culture warriors, with their sneering contempt for the “reality-based community’ — “the Iraqs will shower us with rose petals, as Alexander the Great was once greeted” — for over a decade now.

Filibustering while changing the subject — accused of crude, crass pumping and dumping for hire in a bid to influence business disputes and manipulate markets, they invoke, absurdly, the ghosts of Stalin and Trotsky — is the trademark of Veja‘s approach to public debate.

The epigraph to the man’s Web column is a (mild mis)transation of Dylan Thomas’ “In My Craft or Sullen Art.”

Se em meu ofício, ou arte severa,/ Vou labutando, na quietude/ Da noite, enquanto, à luz cantante/ De encapelada lua jazem/ Tantos amantes que entre os braços/ As próprias dores vão estreitando —/ Não é por pão, nem por ambição,/ Nem para em palcos de marfim/ Pavonear-me, trocando encantos,/ Mas pelo simples salário pago/ Pelo secreto coração deles. (Dylan Thomas – Tradução de Mário Faustino)

Whoever Mário Faustino is, in translating the poem, he has converted a simple declarative statement into a conditional — “(protasis=) If in my profession or severe art, I work in the still of the night … (apodosis=) it is not for bread or amibition …” — and manages to take a moon that “rages” (active verb) and make it merely “swollen” (adjective). Like it had a toothache or gout or something.

In my craft or sullen art
Exercised in the still night
When only the moon rages
And the lovers lie abed
With all their griefs in their arms,
I labor by singing light
Not for ambition or bread
Or the strut and trade of charms
On the ivory stages
But for the common wages
Of their most secret heart.

“We are not mercenaries, we are honest, competent working journalists”: Mainardi and Azevedo hit this note often. There is ample evidence to the contrary, but when confronted with it, Veja‘s rumor-mongers tend to resort to empty ethos arguments.

The ethos appeal attempts to persuade by calling attention to the writer’s/speaker’s character. It says in effect: “I’m a great guy so you should believe what I’m telling you.” Ethos does not concern the veracity of the argument, only its appeal.

The volume of nonexistent factoids they promote without factual foundation of any kind tends to suggest that neither honesty, or competence, or both, are part of their job descriptions, however.

The principal rhetorical tactic used in Azevedo’s contribution to this debate is the “straw man” argument: He characterizes the positions of his opponents (whom he does not even mention by name) without citing their words as evidence that their arguments and positions are what he claims they are.

I tend to think of the gambit as “ventriloquism.” Ali Kamelism (Globo) resorts to this device a lot, too.

A nossa moral e a deles

“Our Morality and Theirs”

No livro Moral e Revolução, de Trotsky, o mais inteligente da geração que fez a revolução soviética, há um texto terrível chamado A Nossa Moral e A Deles. Poucas vezes li algo tão diabolicamente justificador do crime como o que vai ali. Trotsky, com efeito, era o mais brilhante da turma, mas esse libelo elimina qualquer suspeita de que o socialismo teria tomado outro rumo se ele tivesse vencido a parada contra Stálin. Talvez tivesse sido ainda pior. Ele era inegavelmente um intelectual. E os intelectuais costumam matar com mais facilidade do que os brutos, já que são capazes de encontrar motivos mais nobres. No texto, Trotsky deixa claro que os revolucionários têm licenças que aos outros são vedadas porque, afinal, são donos da chave do futuro. Se estão na vanguarda da humanidade, os critérios com que são medidos e medem-se a si mesmos não são os mesmos dos homens comuns. Se vocês notarem, esse é o fundo regressivo, humanamente regressivo, da militância esquerdista de qualquer corrente. Eles estão certos de que a “nossa (deles) moral” é superior à moral não-revolucionária.

In the book Morals and Revolution, by Trotsky, the most intelligent man of the generation that made the Soviet revolution, there is a terrible article called “Their Morals and Ours.” Not often have I read so diabolical a justification of crime as the one you find there. Trotsky, basically, was the most brilliant of the bunch, but this little book lays to rest any doubt that socialism would have taken another path had he won his fight with Stalin. It might even been even worse. He was undeniably an intellectual.

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Genre Confusion: “Autohagiographical Alger Story Foolscaps the New York Times”

Posted by Colin Brayton on March 21, 2008

The Imaginary News & Nonsense Agency (Brazil): Its “Danny the Elf” was interviewed by PBS, but no one by that name apparently exists in actual reality.

The Observatório da Imprensa (Brazil) has a nice little section called “the voice of the ombudsman,” in which it covers the art of the public editor as it is practiced (here and there) around the world.

It had this gisting of last Sunday’s column from Clark Hoyt of the New York Times.

Em sua coluna de domingo [16/3/08], o ombudsman do New York Times, Clark Hoyt, conta como descobriu, com alguns cliques no computador e a ajuda de Jack Begg, supervisor do departamento de pesquisa do diário, que o livro autobiográfico Love and Consequences (Amor e Conseqüências, tradução livre), da autora Margaret Jones, não passava de uma farsa. Em apenas cinco minutos, Hoyt tomou conhecimento de que não havia registro de nenhuma Margaret B. Jones em Eugene, Oregon, e que a casa da qual a autora dizia ter sido proprietária foi comprada por Margaret Seltzer em 2000.

In his column on Sunday, March 16, the Times’ public editor, Mr. Hoyt, relates how he discovered, with a few clicks of his mouse and the help of Jack Begg, head of the newspaper’s research department, that the autobiographical book Love and Consequences … by Margaret Jones, was [a complete phony.] In just five minutes, Hoyt learned that there was no one named Margaret B. Jones in Eugene Oregon, and that the house the author said she owned was sold to a Margaret Seltzer in 2000.

On confusing fact with fiction, see also

On the phony autobiography in question, see also

And compare

No entanto, esta simples checagem dos fatos não foi feita antes da publicação de uma crítica positiva sobre o livro, assinada por Michiko Kakutani no dia 26/2. Dois dias depois, o diário publicou outra matéria com Margaret e sua filha, em sua casa em Eugene, na seção destinada a artigos sobre o lar, na qual ela mostrava como conseguiu dar a volta por cima de uma vida marcada por violência e drogas.

This simple fact-check was not performed, however, before the publication of a positive review of the book bylined to Michiko Kakutani on February 26.

I like Michiko as a book reviewer.

Two days later, the New York daily published another article about Margaret and her daughter at their home in Eugene, in the section dedicated to articles on home life, showing how she managed to turn around a life once marked by violence and drugs.

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New NMM Mission: Fret Over Debt

Posted by Colin Brayton on March 21, 2008

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The bearer the markets, the bearer the bonds.

Data from Brazil’s securities regulator, the CVM, show that debenture (bearer bond) issues so far this year have reached R$32.2 billion, more than two-thirds of issues during all of 2007. It is true, however, that R$30 billion of these new issues representing fundraising by leasing corporations, which means they are not “pure debentures.” Even so, the R$2.2 billion in “pure debentures” raised for surpasses the R$567 million issued in the same period in 2007.

Empresas brasileiras buscam opções com aperto do crédito: “Brazilian companies seek alternatives during credit crunch.” Source: Invertia (Terra Brasil)/Reuters.

I am going to be spending my time chasing down the details of such trends, so I am doing a fair amount of background reading and trying to update my Rolodex with people who know what they are talking about in this area.

My adventures in giving modest advice to an investor relations firm with Brazilian clients on how to communicate effectively in mid-Atlantic financial English have ended.

As empresas brasileiras já consideram alternativas, como financiamento bancário e emissão de papéis apenas no mercado doméstico, para garantir novos recursos em meio à crise global do crédito.

 Brazilian companies are considered alternatives, such as bank financing and debt issues limited to the domestic market, to guarantee their supply of new capital in the midst of a global credit crunch.

Bem capitalizadas, as companhias estão suportando bem o enxugamento das linhas externas, mas têm contemplado diversas opções, inclusive a de simplesmente postergar novas captações até que as taxas retornem aos níveis do ano passado. As alternativas passam também pela busca de recursos em bancos de fomento ou privados internacionais da Europa e Ásia.

With plenty of capital, these companies are holding up well as foreign lines of credit dry up, but have been pondering a number of options, including simply postponing new financing until interest rates return to last year’s levels. Other alternatives include seeking funding from international private banks and venture funds in Europe and Asia.

De acordo com profissionais de bancos de investimentos, esse cenário, bem mais ameno que o enfrentado em crises anteriores, deve-se à combinação de um mercado de capitais vigoroso e da queda continuada do dólar frente ao real, o que permitiu às empresas reduzir e melhorar o perfil de endividamento, além de obter recursos para investimentos.

According to investment bankers, this scenario, which is much more comfortable than during past crises, is attributable to a combination of vigorous capital markets and the continuing decline of the dollar against the Brazilian real, which enables companies to reduce and improve the quality of their debt, as well as to obtain financing for investments.

“Agora, quem tem dívidas para rolar, está preferindo pagar ou buscar outras fontes”, disse José Guilherme Lembi de Faria, diretor-executivo do BBI.

“Then again, those who have debt to roll over are tending to either pay it down or seek other sources,” said José Guilherme Lembi de Faria, CEO of BBI.

Investment banking division of Bradesco.

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“UBS Will Dissolve Banco Pactual Partnership”: Report

Posted by Colin Brayton on March 21, 2008

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Luis Nassif relates in Dinheiro Vivo that UBS will dissolve its partnership with Banco Pactual. UBS said it refused to comment on “market rumors.”

Note for future reference: Did Mr. Nassif call the shot successfully?

I note it mainly because I am trying to patiently and systematically compile information on debt and equity issuers here. Boring, but someone has to do it.

I have not looked at the issuance and underwriting league tables yet, but just from scanning the news, I would guess that UBS Pactual is the New York Yankees of that league.

But I note also in passing that Pactual has been involved in some business disputes of the gran guignol variety over the last decade.

As has UBS, apparently. A Swiss banker working here got some rough treatment, he says, from Brazilian federal police and the Brazilian press recently. See

Dentro em breve o UBS (União de Bancos Suiços) entrará com medida judicial visando dissolver a associação que montou com o Banco Pactual no Brasil.

UBS will soon file suit to dissolve its partnership with Banco Pactual in Brazil.

Os jornais e revistas brasileiros, que se cansaram de louvar a “promoção” de André Esteves a um “alto cargo” no UBS suíço, agora se calam. Ele está de volta ao Brasil, três meses depois de ter “assumido” funções no exterior.

Brazilian newspapers and magazines, who have worn themselves out praising André Esteves’ “promotion” to a “senior position” at UBS in Switzerland have now fallen silent. He is back in Brazil, three months after having “taken on new responsibilities” abroad.

Por aqui, o UBS se desmancha. Nove funcionários de carreira do UBS brasileiro pularam fora, depois da associação com o Pactual. Não suportaram o modo de operação dos ex-Pactual.

Here in Brazil, UBS is unraveling. Nine career Brazilian employees jumped ship after the partnership with Pactual was signed. They could not stand the way the former Pactual bankers did business.

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“Veja Ratfinked Cardoso’s Karl Rove”

Posted by Colin Brayton on March 20, 2008


School for scandal remains in session: “Straight-razor to the quick: the blade of the anticorruption federal police operation has already [chopped off the head] of [the owner of Gautama] and [the minister of Mines and Energy] and now is nearing the neck of the President of the Senate.” Violent imagery straight from the media playbook of Mexico’s Gente Nueva. The article did not accuse the Senator of any relationship to Gautama, however. It accused him of accepting money from a big construction firm, Mendes Junior, to pay personal expenses. Those charges, and others later shrieked about by the magazine, were never substantiated. Nothing was revealed. Veja‘s anonymous source: The palimony lawyer of the Senator’s baby mom, who later appeared in Veja’s sister publication, Playboy Brasil. Starkers.

Revista Veja perde ação contra ex-secretário-geral de FHC: Imprensa magazine (Brazil) reports on a civil libel action brought by a former government official against Veja magazine (Editora Abril) and a number of other news organizations.

The man, the former chief of staff [sort of] of the Cardoso presidency, also won defamation suits against O Globo and the Folha de S. Paulo.

This would make a perfect case study for journalist Luis Nassif, who is writing a book on Veja journalism — briefest of summaries: “It stinks!” — in installments and publishing the draft chapters to Google Pages.

Nassif and the Estado de S. Paulo were cited by the plaintiff in the case as exception to the lynch-mob atmosphere surrounding the case (see below).

Press freedom watchers have expressed (to some extent justifiable) concern about the extreme litigiousness of the relationship between the Brazilian news media and the public figures it covers, but often fail, I think, to draw a distinction between

  1. SLAPP suits designed to punish those who publish inconvenient but corroborated facts — which do seem to be thick on the ground here (Bishop Macedo v. Elvira Lobato of he Folha may be such a case, for example), and
  2. Genuine cases of what we refer to here at NMM as “the gabbling ratfink” — vicious, unbridled, mendacious, moral panic-driven, rumor-mongering, gabbling, quacking, flimsy, alarmist claptrap, perpetrated with “actual malice” or the journalistic equivalent of reckless disregard for the Reality Principle.

Conducting a public information service while giddily intoxicated with the power of monopolizing the gazillion-jigawatt megaphone.

Brazil needs something like a New York Times Co. v. Sullivan to help it conceptualize this difference.

News coverage and activism around this issue, meanwhile, needs to engage in the lost art of fact-checking to shine light on the difference between freedom of expression and the screaming of vicious lies — “The Tutsi have already massacred 300,000 Hutu!” — into the gazillion-jigawatt megaphone.

Here, for example, no summary of the case in all the (scant) news coverage I have read bothers to summarize what nonexistent facts were allegedly alleged.

It is impossible to judge whether the judges judged correctly — whether Veja was a victim of oppression or a perpetrator of the gabbling ratfink — without knowing what factoids it was found to have misstated for fun and profit.

The plaintiff in the case also applied for sanctions against the federal prosecutors in his case — and won suspensions for both of them. He published an indignant letter in the Observátorio da Imprensa in 2002 about the “lynch mob” journalism to which he was subjected. I translate that below.

Revista Veja foi condenada a pagar indenização de R$ 150 mil por danos morais ao ex-secretário-geral da Presidência no governo Fernando Henrique Cardoso, Eduardo Jorge Caldas Pereira.

Veja magazine was sentenced to pay damages of R$150,000 for defamation to the former secretary-general of the federal presidency under the Cardoso administration, Eduardo Jorge Caldas Pereira.

Em votação unânime na tarde da última terça-feira (18), a 4ª Turma do Superior Tribunal de Justiça – formada pelos ministros Aldir Passarinho Junior, Fernando Gonçalves, Massami Uyeda e João Otávio de Noronha – confirmou a condenação da revista.

In an unanimous vote, the 4th Chamber of the [local equivalent of the Circuit Court of Appeals, in terms of hierarchy] — Passarinho, Gonçalves, Uyeda and Noronha — upheld the condemnation of the magazine.

De acordo com informações do site Consultor Jurídico, esta é a quarta decisão que Eduardo Jorge vence. Ele já recebeu indenizações do jornal O Globo e Correio Braziliense. Já o diário Folha de S.Paulo também foi condenado a pagar indenização e já fez o depósito do dinheiro. A revista Isto É também foi condenada, mas tem recurso no STJ.

According to Consultor Jurídico, this is the fourth case Caldas Perreira has won. He has already been paid damages by O Globo and the Correio Braziliense. The Folha de S. Paulo was also ordered to pay damages, and has deposited the amount in escrow. IstoÉ magazine was also ordered to pay damages, but an appeal is pending.

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Posted in Brasil, Brazil, Infotainment, Infowar, Journalism, Latin America | Leave a Comment »

 
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