From the PR Newswire: “Brazil Originates Derivatives”

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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.


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”

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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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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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Nova Bolsa: Brazilian Bourses Joining Forces

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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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The Morning Brief: Guido Stripped to Speedo By Credit Remarks

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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

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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