Brazil earnings snippets

Petrobras (PBR) reported a quarterly profit of R$5.82Bn. This is down from the 1q08 R$7.24Bn but just beat out analyst forecasts of R$5.71Bn average. So kind of ok for PBR, but.....

Pao de Azucar (PCAR4.sa) brought hom an excellent quarter of R$94.9m, which beat out the Bloomberg forecast average of three analysts of R$75.8m. The most interesting feature of the number is that Pao de Azucar is Brazil's biggest food retailer and reports strong sales for 1q09. The shares are up slightly in early trading.

As for an angle on this retail sales buoyancy in Brazil, how about are old friend Mercado Libre (MELI)?. Definitely not a recommendation but simply a place where you might want to do further DD.

UPDATE: Bloomie also has a report linked here on Petrobras company comments on its results, with the CFO talking 'cost overhang'. Good background.

sell economics, buy MELI

The year 2008 will surely go down as the one in which Economists were proved to be the dumbasses that many of us suspected they were for many years. The more you ask their collective opinions these days, the more ridiculous they seem. Below is an example from Brazil. Surely 26 out of 27 economists can't be wrong........

So read this and think about how cheap MELI is these days. They don't sell many cars, either.

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Brazil’s October Retail Sales Rise More Than Expected (Update1)

By Jeb Blount and Katia Cortes Dec. 16 (Bloomberg) -- Brazil’s retail sales rose more than expected by economists in October, indicating that consumer demand in Latin America’s biggest economy is holding up against the global credit crunch.

Sales surged 10.1 percent in October from a year ago, led up by a 44 percent climb in computer sales, the national statistics agency said. The increase exceeded the forecasts of 26 of 27 economists in a Bloomberg survey and was higher than the 9.3 percent sales growth yada yada continues here

Argentina to drive out of recession

He was right, you were wrong. Live with it.

Argentina's government is going full-out Keynesian to stave off recession. The plan is to bolster new car sales by offering a state plan for easy ways to pay on new cars. There are three plans being mulled (and it's quite likely that all three become reality), but the base idea is to offer credit to buy a new car on and interest-free 48 month payment system of P$800 per month (about U$230 right now). Here's La Nacion's report on the plans so far.

To be quite honest, it's a very good plan. Not only does cash move vertically, but it also supports the key auto manufacturing sector in the country. Side effects will be multiple, including boosting the car parts industry and other related sectors such as steelmaking. The bottom is likely to drop out of the second-hand market, but that will only make access to autos cheaper for the lower socioeconomic strata.....the idea is to keep the money flowing, no?

Here are three charts that show the state of play in Argentina's car auto industry right now. The first chart showing sales is the key, perhaps, and clearly shows the drop off in sales last month. However the other two charts, namely production and exports, also demonstrate the inertia setting in and the way that Argentina cannot rely on outside sales to prop up the industry (72% of those units exported go to Brazil).


For sure we're about to hear a whole bunch of criticism from economists and analysts and such about this plan. But after the total and complete failure of the model they've foisted upon us these people should STFU immediately. John Maynard is back, and he's going to save us from the mess that Milton, Alan and all their friends have made. Pity those nations that try to free market their way out of this mess.

UPDATE: Here's Reuters on the story in English

Chart of the day is............

....the Brazilian Retail Sales Index, January 2007 to September 2008 (the latest data out today).

(click to enlarge)

Will somebody please inform the Brazilian population they are supposed to be all gloomy and in recession and stuff? Thank you in advance.