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Brazil has it's act together. It has a government, despite its corruption, that takes care of the people and puts forth policies that help the poor and middle class.
They elected President a former terrorist who robbed a bank and took hostages (she was member of in an extreme left terrorist organization ; they can become prosperous, all the more power to them, but it says a lot on Brazilian morals...
Brazil’s property market is set to become one of the hottest markets in 2010. The country is one of the world’s fastest growing economies, its foreign direct investment has increased and Brazil will host the 2014 soccer Worldcup and the 2016 Olympic Games, which will bring a boost in infrastructure.
Brazil property specialist, Colordarcy, has see Brazilian property enquiries raise by 60% since the Olympic announcement. The company has responded by launching a consultancy service to help clients to source the best real estate deals in Rio de Janeiro. Loxley McKenzie, CEO of Colordarcy predicts an annual increase of 20% pzer annum until the Olympics of 2016.
Mortgages will soon be available to international buyers and this will create a further boost to Brazil’s property market.
The US real estate Tycoon Sam Zell focused a great deal of his 2008 and 2009 on Brazil after his disastrous buyout of Tribune Co; amongst other Zell bought a 19% stake in the Brazilian Gafisa SA.
Indeed, the mortgage to GDP ration in Brazil stands at 3% today (zee below graph to compare with other countries).. Zell thinks this needs to be in double digits, adding that this could happen within 3 to 5 years. In Mexico that figure now stans around 12%; Zell thinks within 3 years the Brazilian mortgage/GDP ratio will grow to the same level as Mexico (http://www.emii.com/Article.aspx?ArticleID=2358623 - broken link).
Once again land fuels cheap credit which will remove the Brazilian surplus. I am sure it will be great for Brazil when Sam owns Boardwalk and Park Place and charges rent for it.
Brazil’s property market is set to become one of the hottest markets in 2010. The country is one of the world’s fastest growing economies, its foreign direct investment has increased and Brazil will host the 2014 soccer Worldcup and the 2016 Olympic Games, which will bring a boost in infrastructure.
Brazil property specialist, Colordarcy, has see Brazilian property enquiries raise by 60% since the Olympic announcement. The company has responded by launching a consultancy service to help clients to source the best real estate deals in Rio de Janeiro. Loxley McKenzie, CEO of Colordarcy predicts an annual increase of 20% pzer annum until the Olympics of 2016.
Mortgages will soon be available to international buyers and this will create a further boost to Brazil’s property market.
The US real estate Tycoon Sam Zell focused a great deal of his 2008 and 2009 on Brazil after his disastrous buyout of Tribune Co; amongst other Zell bought a 19% stake in the Brazilian Gafisa SA.
Indeed, the mortgage to GDP ration in Brazil stands at 3% today (zee below graph to compare with other countries).. Zell thinks this needs to be in double digits, adding that this could happen within 3 to 5 years. In Mexico that figure now stans around 12%; Zell thinks within 3 years the Brazilian mortgage/GDP ratio will grow to the same level as Mexico (http://www.emii.com/Article.aspx?ArticleID=2358623 - broken link).
Once again land fuels cheap credit which will remove the Brazilian surplus. I am sure it will be great for Brazil when Sam owns Boardwalk and Park Place and charges rent for it.
Rinse repeat, over and over again.
The problem with your theory is the fact that Brazil doesn't have a "cheap credit bubble".
I agree that Brazil has a real estate bubble right now, but that real estate bubble has no ramifications to other sectors of the economy, like it had in the USA.
Unlike the USA, when the "real estate bubble" in Brazil bursts in a near future, the impact on the the broader economy will be very low. Nothing even remotely comparable to what happened in the USA. The Brazilian banks won't have huge losses, and the credit system will keep working as usual.
The problem with your theory is the fact that Brazil doesn't have a "cheap credit bubble".
I agree that Brazil has a real estate bubble right now, but that real estate bubble has no ramifications to other sectors of the economy, like it had in the USA.
Unlike the USA, when the "real estate bubble" in Brazil bursts in a near future, the impact on the the broader economy will be very low. Nothing even remotely comparable to what happened in the USA. The Brazilian banks won't have huge losses, and the credit system will keep working as usual.
No Brazil does not have the reserve currency that allows persistent credit creation. However you don't need a cheap credit bubble to turn it into a classic rentier state. Landed gentry did this just fine before land was finacialized. We didn't really burst so much as stagnate. That is what they will do if they allow the "Zells" to buy up the national resources.
Brazil has a ways to go yet with a small mortgage to GDP ratio. The sad thing is they have begun the process again. Brazil recently allowed foreclosure which is what got banks lending into the real estate market. They will also need to keep those capital controls on a razor thin margin. Otherwise dollar carry trade will end round any monetary policy for the real. All I see is a reemergence with cheap assets and Brazil benefiting from rentier arbitrage in an otherwise saturated global market. If Brazil attacks real estate speculation and halts it, then I would see hope. I don't see it.
Brazil's GDP growth for the last quarter was exactly 0. I'm predicting a negative number next quarter. Carry on
The 0.1% of growth was in the third quarter of 2011.
For the fourth quarter, it is expected to have resumed growth, following interest rate cuts (and we have A LOT of room for further rate cuts, since our interest rate is above 10% a year).
Brazil's unemployment rate on December 2011 was the record lowest on the country's history, at 5.2%
Good luck expecting a recession in Brazil. Won't happen.
They elected President a former terrorist who robbed a bank and took hostages (she was member of in an extreme left terrorist organization ; they can become prosperous, all the more power to them, but it says a lot on Brazilian morals...
Dilma Rousseff wasn't a terrorist, she was a freedom fighter, that participated in the fight against the military dictatorship that took over Brazil in 1964 with the full support of the US government.
She never participated directly in any bank robbery to finance the urban guerrila. She was just a planner. Never participated in any armed direct action. For being a member of an anti-dictatorship organization, she was arrested and tortured.
Thought experiment. Let's have open immigration between the US and Brazil for a month and see how people vote with their feet both ways. I think we all know what the results of that would be. Brazil is still a craphole for most people and will be that way for a long long time. For all the handwringing in this country about the gap between rich and poor, it's nothing compared to Brazil.
This highlights one of the major problems with my fellow countrymen.
We've become too arrogant for our own good. Couple that with ignorance and you have a dangerous brew.
For 2007 the GINI coefficient for Brazil was 54. For US it was 41.
Updated data is not available for 2011 but I'd venture to say that BRazil is now closer to 50 and trending down while the US is closer to 45 and trending upwards.
Don't be so arrogant. There would not be a rush by Brazilians into the US. Only those Brazilians whoa re fairly naive and ignorant.
The problem with your theory is the fact that Brazil doesn't have a "cheap credit bubble".
I agree that Brazil has a real estate bubble right now, but that real estate bubble has no ramifications to other sectors of the economy, like it had in the USA.
Unlike the USA, when the "real estate bubble" in Brazil bursts in a near future, the impact on the the broader economy will be very low. Nothing even remotely comparable to what happened in the USA. The Brazilian banks won't have huge losses, and the credit system will keep working as usual.
The real estate bubble in an of itself was not a major problem.
Losses on mortgages were only around 600 billion USD at the top end. For a $14 trillion USD economy, that is not such a major problem. In a few years time that 600 billion worth of losses would've been liquidated via combination of haircuts, bankruptcies, liquidity infusions, and conservatorships.
Instead our problem was and still is a derivative based balance sheet insolvency of systemically important and large parts of the US financial system that will take decades to unwind.
Also, Brazil's debt is only 38% of GDP with strong future growth. Our debt is 100%+ of GDP with weak forecasted growth. This in turn provides us with limited options. With future growth and tax receipts looking to the upside, Brazil can finance debt at low costs if it needs to.
There are more Americans in Brazil than Brazilians in the USA.
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