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

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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”

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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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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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