Monday 28 April 2008

In the last years Brazil has been facing many problems with its neighbor’s countries, Brazil´s ex-commercial partners. Most of the Brazilian problems are related with energy and the old deals with governments that are not in the power anymore. After the problems with Bolivia´s gas and Venezuela´s oil, the new Brazilian´s problem is with Paraguay and its electric energy.
For the new Paraguay´s elected president, Fernando Lugo, the country´s growing is his main objective. So, in order to attract new investors, Fernando Lugo is planning offer energy incentives because he says that Paraguay has right to receive half of all energy produced in Itaipu´s hydroelectric dam.
Although he said it, Paraguay´s has one agreement with Brazil that all the energy that is not going to be used in Paraguay must go to Brazil without any other cost, so the country doesn´t have half of all the energy produced in Itipu´s hydroelectric dam. In Fernando´s Lugo point of view, that treatment is not fair and if he can´t change that situation, at least he can give energy´s incentives that will helps in Paraguay´s growing. That´s just one more diplomatic problem for Lula´s government.http://www.ft.com/cms/s/0/e9a79d62-10c0-11dd-b8d6-0000779fd2ac.html

Monday 14 April 2008

The problems that the financial market have been facing in the last months made the group Lehman Brothers close three of the main investment founds. The official reason for the end of these founds were that in crises times it becomes much more difficult to get credits in the financial market.
But many specialist in financial market are saying that the main reason for the end of these founds is the ratings given by the ratting agencies. In last months, many Lehman Brothers founds were downtrend by the agencies what made their founds looses high amounts of value.http://www.valor.com.br/valoronline/Geral/financas/Internacional/Lehman+Brothers+liquida+tres+fundos+de+investimento,,,22,4873646.html?highlight=&newsid=4873646&areaid=22&editionid=1984
This kind of news just proves the importance of the ratting agencies in the financial markets. Even if the market knows that this ratings are just a way to estipulate the real risk of one asset, their effect are one of the most important thing when the investor is choosing where he should put its money.

Wednesday 12 March 2008

Bolivia's Gas

When a huge reserve of gas was discovered in Bolivia, all the south american’s country had their economies changed in any way.
For Bolivia, that new source of gas looked like a possible way to change its position as the poorest country in the South America. But as long as Bolivia was that poor, the country wasn’t able to explore and sell the gas by it self. So they needed foreign investments what made the gas’s profits shared between Bolivia and their investors.
But two years ago, Evo Morales became the new Bolivia’s president and he wanted to change this situation. In Morales point of view, all the gas profits need to stay in Bolivia and the only way that this could happen was with the nationalization of the Gas industry. With that decision , many foreign investors faced a lot of troubles with their forecasting and lost huge amounts of money.(One nice example is the Brazilian company Petrobras).http://www.ft.com/cms/s/0/5712c2a6-ebae-11dc-9493-0000779fd2ac.html?nclick_check=1
Maybe Petrobras was the most affected company with Evo’s decision. Although they have discovered a vast reserve of gas in Brazil last year, their forecasting was completely changed because they will need at least five years to start explore that gas and in that time they were planning to keep importing the Bolivia’s gas. But now they have to make a new forecast for the next years and they are facing problems to communicate the market about the newplans as we can see in this new in Petrobras website. http://www2.petrobras.com.br/portal/frame_ri.asp?pagina=/ri/ing/index.asp&lang=en&area=ri
This shows us how difficult is to communicate the market and investors about the company’s decisions and most of the cases companies will try to do it the best way, even if for it happen they have to hide some importants information .

Wednesday 27 February 2008

Market crash of 1929

After the first World War,the 20's were a time when the economy(specially america's one) was in huge safe.The stock market was in great groing and many people that aren't used to invest in stocks started to see the Wall Street as a easy way to became rich.In 1929,the Dow Jones points multiplied more than 6 times from what they were in 1921.In these times,it was easy to find a lot of new millionaires in the U.S..http://www.stock-market-crash.net/1929.htm.
As long as the Stock Market was one easy to former new richs,many americans took borrowed huge amounts of money from banks to buy even more stocks.At 1929,it was commun to find investors that had more than 70 % of face value's stock lended.But the in the late 1920's,a speculative boom started,and most of that brokers were trying to sell their stock's to get their money back and to pay their debts.This fgact created a economic bubble.http://www.martinfrost.ws/htmlfiles/aug2007/wallst_crash.html
One important point about the 1929 crash is that even today it is almoust impossible to say for sure why this crash happened.Although America in that time had some problems in many corporate structures(what many people offer as the explanation for this crash),sometimes the fear of a new crash cuases panics in stocks market,because we can't be sure when this kind of thing will happen again.http://www.downtownexpress.com/de_76/75yearsafterwall.html

Saturday 2 February 2008

It is very interest how one case can be noticed in many different ways. The Societe Generale crisis is a great example. In Europe, most of the papers were surprised and tried to understand what really happened in the Bank. The news papers brought articles and reporters telling about how the fraud occurred, who were evolved on it and what is going to be the consequences for the Europe as a hole.
In South America, the news paper just brought a short brief about the case even in important financials news papers like “ O Valor”. Most of the media and its readers were worried about what was going to be affected with the bank crisis and not in how come this happened. In many papers you could see news about the relation between the bank and the stock’s prices, but it was difficult to find deep information about the situation in Societe Generale.
Maybe the most interest case was in U.S.. Although they brought many news about the crisis and how did it happen, the American’s news paper were really interest in compare the European crisis with the problems that american’s economy were facing in that time.
This just prove that if you really want to know a fact, you should look in many sources as possible, because each source has one specific interest and different point of view.