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Mutual Funds Get Crushed By Brazil: Text & Video

FYI: Funds with large holdings of Brazilian assets tumbled yesterday as allegations against the country’s president sparked a selloff.
Regards,
Ted
https://www.bloomberg.com/news/articles/2017-05-19/brazil-heavy-funds-get-crushed-by-political-chaos-rocking-market

Comments

  • A rare day as of late, when I actually had some sit time and watched this report on tv. The words I highlighted from the article.....well, to me; could be from a well written movie screenwriter/book or Saturday Night Live; a kinda "Man, I'd like to take your money; but I'm full up". 'Course, bribes have been human nature since day one, ya think?

    From the article:

    Agriculture Ministry
    "As part of their plea agreement, the brothers submitted to prosecutors a recording that allegedly shows Temer approving a payment to Eduardo Cunha, the former head of the lower house who was jailed as part of Carwash, newspaper O Globo reported. The Batistas and other JBS executives also agreed to pay 225 million reais ($69 million) in fines, the company said in a statement Thursday.

    The video testimony sheds light on alleged deals with state bank BNDES that involved a mandatory bribe of 4 percent, allegedly paid to an associate of former Finance Minister Guido Mantega. When it came to dealing with the pension funds, the Batistas skipped intermediaries and paid the top executives directly, according to the testimony. There were also bribes for representatives of the agriculture ministry. The brothers said they even advised Cunha, the disgraced lawmaker, against trying to start his own corruption scheme at the ministry because too many bribes were being paid already."
  • Will there be similar market reactions here; or perhaps a positive market reaction when Mr. Trump resigns?
  • catch22 said:

    Will there be similar market reactions here; or perhaps a positive market reaction when Mr. Trump resigns?

    Don't over-chew this thought. Resign won't happen.

  • Time reported this on Wednesday:

    "Ladbrokes, one of the largest betting sites in the world, announced today that it has tweaked the odds that Trump leaves office early via impeachment or resignation to 4/5, or 55 percent."

    Make of it what ye will ...
  • Brazil is having turmoil with their presidential corruption. Venezuela is in even deeper trouble and this may last for awhile. As a result, many Latin America funds lost in excess of 10% this week - the worst sector in emerging market.
  • Go figure - Venezuela's stock market (which is apparently an infintesimal part of Latin American equity overall) has been on a tear, with all-time highs this month.

    The debt of VZ's national oil company, PDVSA, used to be fairly widely held among EM and global high-yieldy funds. Just did a quick run thru the top 100 holdings of FNMIX, and PDVSA's there, but not in massive amounts. (Side note: that is a really oily EM fund!)
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