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

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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


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!”

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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.


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

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!”

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.


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

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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

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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

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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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