Electric Sector Legislation | Doomsday for Debentures?

BRAZIL — While sentencing in the «big monthly payola scandal» and an upcoming vote on the «Constitution of the Internet» monopolize the headlines, Provisional Measure 579, currently under debate by the Brazilian congress,

addresses concessions for the generation, transmissions and distribution of electrical energy, as well as the reduction of taxes on the electrical sector, the price to the consumer, and other provisions.

According to today’s Folha de S. Paulo,

members of the government benches in Congress are contemplating an amendment  under which MP 579 would apply only to electric companies that have already had their concessions renewed.

The lack of definition may be affecting the credit-worthiness of major players in the sector, as Valor explained on Monday –Source: Portal ClippingMP..

Faced with uncertainty in the process of renewing electrical energy concessions, Eletrobras has decided to delay plans to raise BRL 2 billion in the capital markets with a debenture issue. The state-owned utility is the latest in a series of electricity companies with fundraising plans affected by the federal government’s plan to reduce retail energy prices. In September, Eletropaulo was obliged to raise interest rate yields in order to place a BRL 750 million debenture issue. Continue reading

«Brazilian Sugarcane Procesors Reopen Talks With Creditors»

Laginha Agro Industrial S/A

Brazilian sugarcane procesors reopen talks with creditors  — Portal ClippingMP. Original source: Valor Econômico, 10-30-2012. My translation.

Few of the Brazilian sugarcane ethanol plants that filed for bankruptcy at the outset of the crisis in 2008 have been able to comply with the payment plans agreed upon with creditors.

At the present moment, there are 37 Brazilian processing plants in bankruptcy, comprising 11% of the sector as a whole. Sector companies say that margins have been squeezed in the last two years by rising costs and falling sugar and alcohol prices.  The result is that quite a few of these companies are now renegotiating debt amounts and deadlines with their creditors. Continue reading

Brazilian Auto Industry | Beemers Built in Blumenau?

It is not by accident that the Brazilian automobile sector has been the showcase of industrial policy under a president whose political career emerged from the auto workers unions of the São Paulo metropolitan area.

It is no surprise, either, that FIESP president Paulo Skaf — the Industrial Federation of São Paulo State — is endorsing the PT’s candidate for mayor, Fernando Haddad.  This here is not Venezuela. Corporate interests have enjoyed a seat at the table from the get go.

In contrast with other sectors — telecommunications, media, agribusiness, logistics —  the auto market already seems more modern, diverse and competitive and has attracted foreign investment to manufacturing for Brazil’s promising internal market.

Stuck in the city’s legendary traffic jams, you can bide the time birdwatching the economy models of U.S. and European brands — Citroen, Renault, Mercedes, Fiat, VW —  as well as Asian vehicles — the recently launched Chery of China, Honda, Toyota, Kia, Nissan.

Source: Estadão Conteudo, via Yahoo! Notícias.

On Friday, October 20,  BMW announced through its press office that its Brazilian president, Henning Dornbusch, will meet with President Dilma on Monday to formalize the company’s plan to build a factory in Brazil and to announce its location.

BMW has intended to build vehicles in Brazil for some time now — an intention bolstered by the new regulatory scheme for the industry, known as Inovar Auto, which will take effect in 2013. Continue reading

São Paulo | First World Cost of Living, Emerging Cost of Dying

 

For the average person in a developing city, the most important factor is safety, health, and security. Efficiency is also important— and that relates to transport or connectivity and how you lay things out through good urban planning. This ability to get around efficiently is probably second in importance only to safety. — Cities of Opportunity | PWC-Partnership for New York City (2012)

Globo News reports, awkwardly worded:

Among Brazilian cities, São Paulo hosts Brazil’s stock exchange as well as the largest number of multinational corporations among Brazilian cities, and its heart beats to the rhythm of business.  But it is  in terms of its business sector that it was recently ranked alongside other major cities in the world.

Among 27 global urban centers, São Paulo ranked 26th in terms of business opportunities. Mumbai was ranked in 27th place.

The city ranks 26th in terms of transportation and infrastructure. In terms of health care and public safety, it ranks last. Along with these well known problems, another difficulty stands out: Internet access is a bottleneck for local businesses due to low quality and high cost.

“Infrastructure that remains out of date and a lack of innovative uses of this technology prevents us from offering a more attractive business environment,”says Alexandre Barbosa of Cetic.br.

Furthermore, how can São Paulo make itself more attractive when it is the third most expensive city in the world in terms of the cost of maintaining a business? The “cost of Brazil” is another factor that diminishes São Paulo’s ability to compete. Other world cities, such as Mumbai and Buenos Aires, have tax rates similar to those found here, according to the study. But the cost of living in São Paulo is as high as it is in cities of the First World.

The results of the ranking were not worse only because of São Paulo’s central economic role: it plays host to some of the largest corporations in the world and its cultural life is intense. “Options exist. What the city must do now is discuss what is to be done and create a plan for the middle and long term,” said Richard Dubois, a partner at Price Watherhouse [sic] Brasil.

The Estado de S. Paulo provides a more complete summary, including a full and proper citation of the study, which had to be googled up to be checked.

São Paulo has declined in terms of its score in a recenlty released 2012 PricewaterhouseCoopers (PwC) study of social and economic development indicators compared with 2011, and as a result fell to next to last among 27 global urban centers.

According to Cities of Opportunity 2012, released on Wednesday, it outranks only Mumbai and ranks behind other emerging urban centers such as  Johannesburgo (25th), Istambul (24th), Buenos Aires 23rd) and Mexico City (21st). New York remains the leader with 1,112 points, more than double the points scored by the Brazilian city (527).

São Paulo saw its score decline in seven of the ten criteria analyzed, many of them crucial to the realization of such international events as the World Cup 2014. In transportation and infrastructure, for example, the São Paulo capital beat out only Johannesburg.  Its score fell from 28 points in 2011 to 22 in the study just released. levantamento divulgado hoje.

São Paulo also scored lower in the areas of economic influence, technological readiness, health and public safety, demographics and quality of life, sustainablity, and lifestyle.

Improvements were noted in the areas of intellectual capital and innovation, but these advances wre insufficient to improve the city’s score — it ranked 24th, 21st and 25th, respectively, in these areas.

The study is not as purely negative as Globo makes it out to be.

“In relation to other emerging cities, São Paulo is among the easiest to do business,” said the  PwC Brasil partner and lead researcher for government and the public sector, Richard Dubois. The study shows it is easier to open businesses in São Paulo than in Beijing  (22nd place), Istambul (23), Moscow (24), Buenos Aires (25), Mumbai (26) e Shanghai (27). Emerging cities scoring higher than the Brazilian metropolis were Johannesburg (19) and Mexico City (17).

Dubois notes, on the other hand, that national data were used for the nine items used to calculate the ease of doing business. An example is the ease of starting a new business, in which São Paulo received a grade of 6 out of 27 possible. Sydney,  Austrália received the highest grade in this area.

The only Brazilian city studied — Rio de Janeiro will join the list in 2013 — is notable for its real growth in GDP. It growth in this area ranked 16th from 2010 to 2011, ahead of Seoul, Abu Dhabi, Sydney, Tokyo, Paris and London, among others. São Paulo ranks 7th in economically active age groups and 15th in terms of major construction projects.

«Is There a Housing Bubble in Brazil?»

Source: Folhapress, via Brasilianas.Org. I translate …

Is there a housing bubble in Brazil? Five indicators for and against

Pro

  1. Housing prices have risen far beyond inflation and the purchasing power of families
  2. The volume of available housing credit jumped from 1.5% of GDP in 2007 to 5.5% in 2012
  3. Interest rates have fallen substantially and homes are financed at favorable interest rates
  4. Purchase prices have risen faster than rents
  5. Government programs, incentives and public works have overheated the market

Con

  1. The rise of a new middle class and a rosy outlook for the future make the rise in prices sustainable
  2. The volume of housing credit is trivial alongside the 65% of GDP in the United States
  3. Brazilian interest rates remain relatively high, inhibiting the expansion of the real estate sector
  4. Rents may rise, compensating real estate prices
  5. The housing deficit in Brazil remains high: 5 million units

The analysis is by the IPEA, the federal government’s Institute of Applied Economic Research. The IPEA

point to the real possibility of a bubble in the Brazilina real estate market which could explode in the event of future interest hikes.

In other words, the rapid rise in housing prices in recent years is resulting in unrealistic valuations, incompatible with real supply and demand and therefore unsustainable.

The study, by economists Mário Jorge Mendonça and Adolfo Sachsida, brings new arguments to bear on the controversy involving researchers, sellers and buyer.

The economists calculate that prices have risen by 165% in Rio de Janeiro and 132% in São Paulo between January 2008 and February 2012, compared with a 25% inflation rate in the same period.

A rise in prices well beyond the rise in inflation was also observeed in Recife, Belo Horiznote, Brasilian and Fortaleza, though the period studied was smaller because historical data was unavailable.

Price bubbles are generally inflated by rapid growth in the supply of credit.

This type of growth is visible in the Brazilian housing sector — impelled, the study makes it a point to say, by federal government programs, incentives and public works.

“The government’s insistence on heating up what is already an overheated real estate market only contributes to a worse overall result,” the study concludes.

Among the examples cited, along with the availability of favorable interest rates, were the Minha Casa, Minha Vida — My House, My Life — housing program and public works relating to the World Cup 2014 and the 2016 Olympics.

An advisory council of the federal presidency, IPEA does not endorse these conclusions. In its bulletin, the institute argues that the volume of available credit is a long, long way from the 65% of GDP observed in the United States.

We can only speak for our own modest microcosm, here on the modest little street in the Vila Madalena-Sumarezinho where we live: There is a temptation to sell into peak prices which have increased literally six-fold (in theory) in the past decade.

Abril Fools | «Veja Vexed for Collor Collar»

From the nostalgic 90s: President Collor as media-made … and media-unmade … man

Via Comunique-se.

Select outlets of the Brazilian press celebrate a World Bank database on corruption cases that names two notorious figures — ex-São Paulo mayor and governor Paulo Maluf — Maluf! — and the media and telecoms venture capitalist Daniel Dantas.

Meanwhile, the congressional commission examining the scandal of Mr. Waterfall drones on as efforts continue to quash the wiretaps on which the case is founded. This essential legal detail gets very little coverage, however.

The senior federal judge in charge of analyzing the motion has already voted in favor of throwing out the evidence on the grounds of insufficent cause for the warrant. Two other judges on the panel — roughly equivalent to a federal appeals court — have yet to weigh in.

And a former Supreme Court justice, Gilmar Mendes — scrutinized over travels on a private jet allegedly paid for by the Waterfall organization — has already demonstrated, in spades and ex parte, a similar distaste for a supposed «police state» based on court-ordered wiretaps.

In fact, Mendes famously claimed that he had been the victim of some infinitely sneaky wireless war driver in his chambers, who allegedly captured a conversation with Senator Demosthenes Torres of the DEM — a central figure in the current scandal .

At the time, Veja amplified the allegation, but when the federal police found absolutely no evidence of such activity it issued no mea culpa.

An excerpt from today’s news flow, and I translate …  Continue reading

Anxieties of Influence | Some Key Brazilian Bloggers

As a wannabe beat reporter trying to get oriented in a strange land, my raison du blog is to identify influential media strategists and strategies and reverse engineer their techniques and implementations.

In some cases, the structure of hyperlinks in a galaxy of related content provides evidence of a Collaborative Networked Organization (CNO) in action, just as much of the 21st century management literature predicts.

But which cases?

In the past, I have done quite a bit of this with political campaigns, owing both to personal curiosity and to the fact that political campaigns tend to use state of the art techniques for achieving well-defined goals — get at least one more vote than the competition at all costs.

This makes such campaigns ideal for reverse engineering and hypothesis testing. O brave new world, that hath such Twitter robots in it!

I have also had some pretty good success using the technique of focused crawling to identify key players in various economic sectors, such as banking & finance, agriculture, utilities, IT, infrastructure and culture & entertainment — stuff my work is about.

Forget the free-living joyful image of Pelé and Carvanal –Brasil is the world capital of soul-crushing alphabet-soup bureaucracy. Web crawling helps generate lists of bureaucratic agents and agencies and assess their relative importance.  Continue reading

Virada Cultural Paulista | The Second Life Effect

Why we avoided the Sambodian Virada Cultural Paulista | 2012, or, traduttores traditores.

Neuza and I have not been consuming our fair share of Sambodian culture lately, owing both to ennui and to the odd work schedule of a traduttore traditore.

We are also somewhat puzzled over the latest pet project supported by federal and state Brazilian Reais — a Portuguese-language translation of Priscilla, Queen of the Desert. Our cable channels are blitzing subscribers while we scratch our heads over why you would present this example of transnational metrosexuality when there are perfectly good home grown works to musicalize — Eu Tu e Ele, maybe?

Anyhow, thus it was that we decided to skip this weekend’s Virada Cultural Paulista in the traditional city center, currently undergoing — controversial — economic and social reconstructive surgery.

A likely opposition candidate for the mayoral race later this year, for example, has announced he would review and possibly withdraw from the troubled Nova Luz urban design project aimed at recovering what has grown into Cracolândia — Crack CIty, Sambôdia, in recent years.

The current mayor is an engineer and real estate broker with strong ties to the local industry — he hired his brothers, with similar backgrounds, to key posts at the subway and bus authorities as soon as he assumed office.

Second Life Syndrome

The project suffers from Second Life syndrome — having produced nothing but a virtual reality experience so far, after several fresh starts producing nothing but the standard jokes about the New New Nova Luz 2.0.

The city planners have produced a portfolio of fantastic VR scenery without a single human figure to set the scale — a trait in common with the architectural and landscape studies of A. Hitler. The site is highly uninformative.

We have seen this tactic used before.

Several years ago, in our beloved Brooklyn, we took part in the Tour de Brooklyn, a cyclothon running from Prospect Park to the projects of Coney Island and back.

A heavy police presence ensured our safety, but it was embarrassing to see projects dwellers — fellow Brooklynites — cracked down on for our presumed safety. Start the tour at Coney Island and run it up to Atlantic Yards for a Brooklyn Nets game, Mayor Bloomberg!

More generally, the Virada — modeled on the White Nights of Madrid — is something of dress rehearsal for major international events later in the decade — the Cup, the Olympiad — and so does its best to evangelize the event.

No news is good news, as the saying goes.

[Further down, I will try to present an X-ray of the online mobilization behind this effort.]

Or barring that, get someone like Larry Rohter of the New York Times to write a puff piece on São Paulo state and its SESC sociocultural programs — programs we use with pleasure without abandoning our critical faculties.

The larger context for understanding sociocultural programming are recent political developments that create an environment of extreme mistrust around issues of governance.

First of all, a major contractor on public works for the Olympics and Cup — and for major federal economic growth (PAC) projects as well — finds itself at the heart of another wild and unpredictable political scandal along the lines of the “big monthly allowance” of 2005, which also began as a contracting scandal in the postal service.

Secondly, as to the big monthly — a case still without a verdict seven years later —  you do well to remember that a stream of under-the-table election finance was laundered at one point through one of the most notable international events in Brazil, Rock in Rio.

Or more specifically, through the ad agency in charge of publicity for this and other public-private partnerships.

As Fall Waterfalls, So Falls …

It is too early to tell exactly what will pan out of an investigation into the Charley Waterfall case –aptly named for the massive leaking of new angles to newspapers and TV, who introduce new characters to the 9 o’clock soap opera every day now.

It is interesting to see quite a few regional and sub-megalopolitan papers focusing on the regional angle — a fragmentation of coverage to contrast with the Ctl-C Ctl-V sameness of coverage in past cases of this kind.

Speaking of Rio,at any rate, and as the FSP reports,

Delta’s new CEO, Carlos Alberto Verdini, accuses former Rio mayor Cesar Maia (DEM) of refusing to pay what is owed on the Engenhão football stadium, inaugurated in 2007 for the Pan-American Games.

The project raised concerns by coming in at BRL 350 million out of an initial budget of BRL 60 million.

One remembers all too well the photos of Mayor “The Naked” Maia — a self-styled Lusophone acolyte at the Church of Dick Morris — in a grip and grin  with bicheiro — numbers racketeer — Captain Guimarães at the Sambadrome some years back.

The Captain is an accused former military torturer from the days of the dictatorship. This career trajectory is not without precedent — the infamous General Kruel, for example, who used the coup as a pretext for taking over the underground lottery and using it to finance black ops pre- and post-coup.

Tourism and the Post-Modern PPP

I find it interesting to study the organizational structuring and restructuring of the tourist industry at the national and regional level. It makes for an intriguing contrast between models of governance at the state and federal levels, even if Larry Rohter forgets to mention it.

São Paulo and Rio tend to govern themselves more in line with neoliberal models than does the federal government, and lately have found themselves on the lower end of a 60-40 split — prevailing with 60% at home and losing with 40% on the road, in newly important states such as Bahia — which is still at work consolidating its victory over Carlismo.

Lest we forget, the political machine of Antônio Carlos Magalhães, a dictatorship-era caudilho, was treating to a syrupy obit by Rother in which the reporter downloads the emotional tenor of Oriana Fallaci on Onassis.

[...]

Campus Party

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The Fearless Independence of the Editora Abril and Other Tall Tales of Its Kind

Blog da Cidadania‘s Edu Guimarães is a leading figure in the self-styled «progessive blogsphere» here in Brazil.  He writes,

Some days ago, a friend of mine employed by the Editora Abril phoned me to describe his worries over the scandal involving the newsweekly Veja — that is to say, involving the possibility that group publisher Roberto Civita will be subpoenaed to appear before the parliamentary inquiry into the Charlie Waterfall case.

Wiretaps of the numbers racketeer captured the racketeers boasting of their success in planting scandalous cover stories with the magazine to undermine their political enemies and competition.

This friend’s concern was that condemnation of the company will produce blowback affecting the thousands of Abril employees. My response was that my friend should not worry himself, given the likelihood that Civita will succeed in hushing up the case, but also given that the damage will be confined to Veja and not affect the division where my friend works.

We also have friends at Abril and can testify that the vast majority of its knowledge workers are talented and conscientious.

My friend, still worried, said he takes no comfort from this scenario because what is keeping Abril in business nowadays is Veja and its contracts with the state government of S. Paulo, which burns massive amounts of cash from its education budget to buy tens of thousands of copies of Veja and textbooks published by Abril, along with others purchased from the Folha, Estado and Globo groups.

Somewhere here I have informal financials of the Abril group from 2007, at which time it was in the market for private equity partnership. Other than that, however, the company profile is that of a hereditary media robber baronage.

I remembered this conversation when I read the accusations that Veja columnist and blogger Reinaldo Azevedo and other mainstream media figures publish every day against members of a blogosphere opposed to the synergies pursued by the major media and the PSDB, DEM and PPS political parties.

Continue reading

TV PSDB? | The Padre Anchieta PPP

They might be better off I think.
The way it seems to me
Making up their own shows,
Which might be better than TV …
–Talking Heads

Recent developments at São Paulo’s PBS quasi-equivalent, TV Cultura, continues to draw flack from the Ford Foundation-funded Observatório da Imprensa and other local observers.

As Wikipedia notes, and I translate

The adminstrative council of the Padre Anchieta Foundation comprises 47 members. The appointment of life-time and elected members are, in large part, influenced by the São Paulo state government.  The state’s role in the foundation’s decision-making process — said to violate its founding principles – has led to criticism by media analysts.

This is true: elected and appointed city and state officials share the dais with tenured professors at state-run universities, which do themselves no favors by playing along. I cannot bear to watch it, although I used to enjoy Roda Viva.

The naked truth is that the ruling PSDB has followed in the footsteps of its ideological twin in Mexico, the PAN: founded as a moralizing antidote to the machine politics of the PMDB and PFL — the PRI, in PAN’s case — it has slipped the very leash it sought to place on public immorality.

Heading this partial llist, Goldman and Matarazzo are one of the PSDB’s federal senators and the power behind the throne of São Paulo’s municipal government, respectively. Is he one of those Matarazzos? Yes, he is: a scion of the coffee barons, a sort of tropical Lorenzo de Medici.

Added to the mix most recently is commercially produced programming by the Folha de S. Paulo and the Editora Abril, both of them credibly — they are incredibly guilty, really — denounced as part of the political machine.

I find that a preliminary «link ecology» of TV Cultura’s Web presence neatly confirms this diagnosis. I have pruned the network of most redundant «social code» — Twitter, Facebook and other echo chambers …

Continue reading

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