Castelos de areia

Castelos de areia – A política do BC de tentar defender o real me fez lembrar de castelos de areia. Quando criança e também depois como pai, eu já construi vários castelos de areia em praias. Para proteger o castelo sempre construía uma muralha para tentar evitar os efeitos nocivos da água do mar, que com a força das ondas vinha sempre tentar derrubar o “meu” castelo. A brincadeira de construir o castelo e depois admira-lo era sempre legal. Os esforços para construir e reconstruir a muralha eram em grande parte função da beleza do castelo construído. No final, independentemente da beleza do projeto, chegava sempre a constatação de que os esforços eram fúteis. A água iria destruir o castelo de qualquer jeito. Os paralelos entre estas brincadeiras de criança e a situação econômica atual do Brasil são inevitáveis. Os governos do PT criaram um castelo de areia majestoso, o qual tentam defender com esforços fenomenais. Por exemplo, a política de swaps cambiais é um esforço fenomenal para conter a hemorragia cambial. A muralha não irá aguentar e o castelo irá sucumbir diante da força das ondas do mercado mundial!

Loyalty to a lunatic, damage to a nation

Mr. Levy and Mr. Tombini have always been very loyal to Dilma Rousseff. Mr. Tombini has been a “loyal knight to the queen” much longer, since he became a knight during the first days of Dilma 1, the “reign of farses.” Ms. Rousseff is a demanding queen who does not hesitate to publicly humiliate her servants. She is also a person who thinks very highly of her abilities as an economist. Her actions to date reveal a complete distaste for modern economic thinking, which calls for limits in the power and size of the public sector, with greater room for the private sector to lead in economic growth and development.

Apparently, Ms. Rousseff chose Levy to be her “main knight” in Dilma 2 after realizing that her favorite knights were being criticized by many important economic segments (read international investors, international banks and institutions) as being “puppets” of the master. The economic troubles of Dilma 1 would remain in Dilma 2 if these puppets were chosen again as loyal knights and placed in key positions such as the Minister of Finance.

The bright choice was somehow diminished by the simultaneous choice of a loyal, but much inferior, knight to command the Planning Ministry, Mr. Barbosa. As history has revealed, this inferior choice, in terms of intellect and ideology, was an intricate strategy of queen lunatic to keep things running as they were under Dilma 1. Mr. Levy’s choice was a cost that the queen had to face in order to keep the foreigners happy while giving Mr. Barbosa the leeway to keep going with the outdated and unsuccessful policies of Dilma 1.

Mr. Levy has been a very loyal knight. His loyalty was put to a test in a recent event, in which he was asked to give a lecture to key Brazilian industrialists in order to defend the re-creation of an unpopular tax. During Mr. Levy’s lecture, Mr. Barbosa, Ms. Rousseff and Mr. Mercadante (another loyal knight) decided to repeal the tax and to send a budget proposal with a deficit to Congress without prior consultation with the Minister of Finance.

The consequences of the misdeed produced by Ms. Rousseff, Mr. Barbosa and Mr. Mercadante are now well known: S&P downgraded Brazil. This action, in turn, has provoked several reactions. One of them has been the temporary change of powers within government: Levy has been given more authority vis-a-vis Mr. Barbosa and Mr. Mercadante. The unpopular tax defended by Mr. Levy is now a major component of the government’s fiscal package. Another reaction has been the re-activation of the president of Brazil’s Central Bank, Mr. Tombini, as a public and loyal defender of the proposals made by the government.

This author believes that both Mr. Levy and Mr. Tombini know that the solution to Brazil’s fiscal turmoil is a deep cut in government expenditures without additional taxes. Such a measure would bring stability to the government budget and, as a consequence, would generate a great deal of credibility in the international arena. The costs of such a measure are also very clear – classes that have benefited from public assistance and who politically support PT would manifest and create chaos in the streets.

Giving in to such potential political and public disturbance costs has apparently motivated the new proposals. However, this strategy will be short lived. Political and public disturbance costs will happen anyways. Loyalty to a lunatic has proven and will continue to prove to be a damage to Brazil.

Levy: the GREAT Brazilian Houdini or the GREAT Brazilian Von Karajan


Is Levy a great magician or a great maestro? Consider the environment. Dilma (not Mantega, her puppet) managed to place the Brazilian economy in a “disaster” motion. Her outdated populist-socialist- development strategies led to an artificial increase in employment at the expense of productivity improvement and inflation. The latter was mainly fueled by disastrous and ill-designed actions to increase public expenditures and debt. In addition, her actions, in conjunction with her party, led to the collapse of Brazil’s most prestigious company: Petrobras. The “Petrolao,” as it is known in Brazil, may reduce the country’s ability to obtain international financing at reasonable costs. The scandal, this author hopes, may also lead to jail sentences for Petrobras’ CEO, G. Foster and her imminent leader, Dilma Rousseff.

Given the turmoil, created entirely by the product of dated ideology (i.e., the socialist, “periphery” – development strategy, which, if I am not mistaken, was one of the (master or doctorate) thesis defended by the actual Central Bank’s president, Alexandre Tombini), and intentional public deception of the health of the public accounts orchestrated by previous Finance Minister, Guido Mantega, and his subordinate, Treasury’s Secretary, Arno Augustin, led to the economic environment that Levy encountered in his first day of office which was certainly dismal.

As an intelligent strategist, who had previous experience in the government, how would Levy rationally consider the strategies ahead of him? I postulate that Levy considered his position at Bradesco (no doubt, a leading bank in Brazil) as well as the prestigious position as Brazil’s finance minister before accepting the offer, reluctantly, made by Dilma. As a strategist, Levy may have thought: “Humm, do I continue here at Bradesco, as one of its main directors, or do I take the challenge of facing Dilma at a lower salary, but at the prospect of being at the “global window,” where everyone will finally see my value as an economist?”

Perhaps, this is all imagination of this author and has nothing to do with the dynamics of power in Brazil. But, perhaps, there is some content of truth here.

I postulate that Levy accepted the position for personal reasons. Along these lines, I postulate that he anticipated that Dilma would give him a window of tranquility, which would last for about one year. Knowing this, he is eager to show his value to the global community (and praise he has received from IMF recently as a competent administrator) and will thus adopt all measures that he can, given the constraints that he faces, to “control” the finances. In my view, he is doing this in order to exit the government as a “hero” (according to the international community) before his six-month term is done. His next post should be as head of a major bank, such as Citibank or JP Morgan.

The punishment to Russia will continue!

Russia has been punished severely by the abysmal drop in the oil price. The trend for its currency is negative vis-a-vis the US dollar. This means, among other things, that a military campaign in Ukraine is becoming more costly – however, this may also trigger a desperate move (as in a tipping point in climate change where warming may cause a negative climatic shock and generate another glacial era), in which a military campaign becomes an optimal strategy in order to unify the Russian people against an identifiable, external, enemy – the Western World. History has taught us that nations may adopt this strategy in order to divert attention from internal problems (such as increasing unemployment and poverty).

Brent oil at $40 coming soon!


Brent oil is now trading at $53.45 and this price is falling; WTI may fall below $50 today. Desperate oil-producing nations increase their supplies, as a standard game theoretic analysis would predict. Soon we may see Brent oil trading at $40. Not good news for Petrobras, I am afraid. Check out the gasoline prices at the end of the following article:

Soon, Brazilians will be paying three times more than Americans for gasoline!

Chicken or Collusion? Which game are the US and Saudi Arabia playing?


If you have watched the news recently you probably heard that Saudi Arabia and the US are playing a “game of chicken” in the global oil market. The following description is accurate (see:

“The game of chicken, also known as the hawk-dove game or snowdrift game, is an influential model of conflict for two players in game theory. The principle of the game is that while each player prefers not to yield to the other, the worst possible outcome occurs when both players do not yield.

The name “chicken” has its origins in a game in which two drivers drive towards each other on a collision course: one must swerve, or both may die in the crash, but if one driver swerves and the other does not, the one who swerved will be called a “chicken,” meaning a coward; this terminology is most prevalent in political science and economics. The name “Hawk-Dove” refers to a situation in which there is a competition for a shared resource and the contestants can choose either conciliation or conflict; this terminology is most commonly used in biology and evolutionary game theory. From a game-theoretic point of view, “chicken” and “hawk-dove” are identical; the different names stem from parallel development of the basic principles in different research areas.”

I have also written in previous posts that the two nations were engaged in a game of chicken. If one only considers the “economics” of the issue, it seems correct to describe the game as such. But, if you consider the “politics” of the issue, there is at least one possible competing alternative for the game-of-chicken characterization. Russia and Iran (and also Venezuela and the terrorist group ISIS) are being punished severely by the abysmal drop in oil prices. Russia and Iran are supporters of actions that both the US and Saudi Arabia oppose. The gains from making Russia and Iran weaker economically and politically may outweigh the economic losses that Americans and Saudis are enduring. The recent action taken by the Obama administration of allowing American oil producers to export their product may be in line with this hypothesis that the US and Saudi Arabia are playing a different game – one of asymmetric information where the chosen strategy is collusion!

Interesting shifts inside the OPEC cartel


It appears that those that share the view of the leader, Saudi Arabia, have to behave consistently with the leader. As the oil price drops in the world market, the pressure inside of the cartel is likely rising for a “retreat” in its ambitious commitment to keep OPEC’s supply constant. The cartel’s total supply has fallen slightly recently; however, the most interesting aspect of the recent drop in supply has been the “winners” and “losers”; the Saudis and UAE reduced their supply while Nigeria, among others, raised theirs. This is an interesting game, which I plan to model soon.

Brasil esta pagando agio de 5,4 bilhoes de reais por gasolina por mes


O preco da gasolina em Toledo, Ohio, EUA hoje esta R$ 1,14 por litro (veja aqui: Em Brasilia, o litro esta sendo vendido a R$ 3,17. No resto do Brasil, o preco medio e’ menor. Suponhamos que o agio medio no Brasil, relativamente aos EUA, seja de R$ 1,5 por litro. Segundo o Ministerio das Minas e Energias, o consumo de gasolina no Brasil no primeiro semestre de 2014 foi de 21,5 bilhoes de litros (veja aqui:

Supondo que o consumo tenha permanecido constante (hipotese conservadora visto que o consumo tem aumentado ao longo do tempo), o consumo mensal e’ de 3,6 bilhoes de litros. Portanto, o agio pago pelo Brasil por mes esta igual a R$ 5,4 bilhoes. Mantendo-se este agio durante 2015, o Brasil podera atingir a sua meta de superavit orcamentario tranquilamente (pressupondo-se que o agio seja transferido aos cofres do Tesouro integralmente).

US oil imports: Saudis are losing ground to Canada and other non-OPEC nations as oil prices fall!


Consider this. An oil rich country like Canada has been facing a depreciation of its currency vis-a-vis the US dollar. The Canadian dollar is positively related to the international oil price. For Russia the positive relationship between the value of its national currency in US dollar terms and the international oil price is even stronger than for Canada – the ruble has been falling much faster than the Canadian dollar vis-a-vis the US dollar. Very likely, the reason for this discrepancy comes from the fact that Russia’s economy is much more dependent on oil exports than the Canadian economy.

What about Saudi Arabia’s currency? Interestingly enough, the riyal has not fallen as much vis-a-vis the US dollar as the Canadian dollar or the Russian ruble (see here It is thus very likely that Saudi Arabia has been burning a lot of its foreign reserves to defend its currency. Hence, not only has the falling oil prices caused a loss of billions of dollars in terms of oil export revenues for Saudi Arabia, the country is also spending many billions of dollars to defend its currency and its strategy to keep its supply constant.

As the currencies of many oil exporting nations fall vis-a-vis the US dollar, their exports become relatively cheaper than Saudi Arabia’s. This trend should reduce the relative importance of Saudi Arabia’s exports in the US market. Brazil and Canada, among other non-OPEC nations, should increase their market shares in the US market. The combined effects of falling oil prices and falling currencies for some non-OPEC nations should augment, not reduce, the woes faced by OPEC members.

Have the Saudis and other OPEC members anticipated the compounded effects of falling oil prices and falling currencies for competitors when they decided to adopt the strategy of keeping their oil supply constant? I bet not!





Europe: Will history repeat itself? I hope not!


Europe is already in recession, even though the last statistics showed that economic growth was about 0.2% this year. It is anticipated that the economic problems will continue next year, causing a greater negative impact on the economy. Greece is again facing economic and political crises. Russia’s currency continues losing value – just today, it fell over 5%. Russia has lost billions of dollars due to the decline in oil prices. Russia bombers had to be intercepted 26 times today by NATO airplanes in the NATO allies’ airspace. I hope that Putin will not choose to “solve” Russia’s economic problems with old recipes, which involve grabbing neighboring territories with military activities.

Brent below 60 USD per barrel coming soon!

Crude Oil Brent Price_ Latest Price & Chart for Crude Oil Brent - NASDAQ_Page_1

Brent traded at 60.25 USD today – the lowest of the day so far. Given the recent news and forecasts that show that the Saudis plan to keep going with their strategy of maintaining their supply constant and the expectations that global demand will be lower than it was anticipated a few months ago, the oil price will soon be traded below 60 USD. (see

This is relevant because several OPEC countries will bleed at such low oil prices. The same conclusion seems pertinent for offshore drilling in many places in the world.

Exportacoes agricolas para os EUA em 2015: Unica maneira de evitar recessao no Brasil!


Hoje sera mais um dia de turbulencias nos mercados mundiais. As noticias ruins continuam chegando, contribuindo para o nervosismo dos mercados. A Agencia Internacional de Energia anunciou hoje que ela espera uma queda de 230.000 barris por dia em 2015. Os efeitos deste anuncio ja estao sendo sentidos mundo afora, com os mercados europeus perdendo valor. Os mercados ainda nao abriram nos EUA, mas ja trabalham no vermelho (futures). Os motivos para a queda na demanda mundial de petroleo sao derivadas do “efeito renda” que a queda do preco do petroleo esta causando nos paises ricos em petroleo, como a Russia.

Em meio a todo este “turmOIL” encontramos um “safe haven”: os EUA. Os ultimos sinais economicos demonstram que a recuperacao economica nos EUA e’ forte. Em novembro, os EUA criaram 320.000 empregos, superando as expectativas que ficavam em torno de 230.000 novos empregos. As estatisticas de vendas no comercio tambem superaram as expectativas. Os efeitos das noticias ruins no resto do mundo e das noticias boas nos EUA tem feito o dolar subir com relacao as outras moedas do mundo.

Com o crescimento robusto dos EUA, o crescimento do consumo nos EUA ira tambem acontecer. Os EUA irao aumentar suas importacoes. E’ exatamente este fator que deve ser utilizado pelo Brasil para evitar a recessao em 2015, que ja bate a porta em 2014. A situacao economica do Brasil nao e’ nada animadora. Os juros sobem, as expectativas inflacionarias nao caem e o arrocho fiscal sera inevitavel. Alem disso, o Brasil ira continuar sofrendo perdas com a Petrobras.

O que resta ao Brasil neste cenario interno ruim, mas externo (considerando os EUA e possivelmente a China) promissor? O Brasil deve estimular suas exportacoes de produtos agricolas. Para conseguir ganhos expressivos nesta dimensao, o Brasil deve deixar o real se desvalorizar com relacao ao dolar. A recomendacao e’ deixar o dolar subir e mante-lo acima de 3 reais durante todo o ano.

Petroleo Brasileiro no NYSE: Pior nivel nos ultimos 10 anos!

Petroleo Brasileiro 12-8-14 NYSE_Page_1

Em 13 de dezembro de 2004, a acao da Petrobras no NYSE estava valendo 9,16 dolares. Hoje, ela esta caindo 4,54%, valendo no momento deste post 8,42 dolares. Este e’ o pior nivel da Petrobras no NYSE em dez anos! A Petrobras vem perdendo valor ha tempos, como pode se observar no grafico acima. Quando o governo brasileiro ira reagir? E’ necessario enviar uma mensagem positiva ao mercado. A mensagem que o mercado esta esperando e’ uma troca no comando da empresa – com um novo presidente que tenha credibilidade em gestao de empresas e que tenha autonomia para gerir a empresa sem interferencia do governo.

Japao, Uniao Europeia, Russia e agora China. Demanda mundial em queda!


Os mercados hoje foram surpreendidos pelas noticias vindas da China e do Japao – na China, importacoes no mes de novembro cairam 6,7% enquanto exportacoes cresceram menos do que 5%. (veja:

A economia japonesa contraiu; queda de 1,9% no seu nivel de atividade economica (veja:

Crescimento na europa tambem deve ser menor do que o esperado em 2014 e em 2015 (veja:

Enquanto isso, a Russia esta sendo seriamente atingida pela queda do preco do petroleo (veja:

Aparentemente, so os EUA estao tendo motivos para comemorar ja que criaram 320,000 empregos em novembro, surpreendendo o mercado que esperava um crescimento de 230,000 empregos. Com este crescimento acima do esperado, especula-se que o Federal Reserve Bank ira comecar a aumentar a taxa de juros em marco de 2015. Talvez, com o desaquecimento mundial e com a queda do preco do petroleo, as forcas inflacionarias nos EUA nao sejam suficiente fortes para o aumento da taxa de juros em marco de 2015. De qualquer maneira, os EUA devem ja estar assumindo o papel que a China assumiu nos ultimos anos. Grandes parceiros comerciais dos EUA, como o Canada, devem se beneficiar.

Falling oil prices: will this trend stop before Brent is below 60 USD?

This Monday should be another day of negatives for the oil prices, both WTI and Brent. Currently (at 4:54 pm Mountain Time), WTI and Brent are 64,89 USD and 67,97 USD.

If the sliding tendence continues, pretty soon these prices will be lower than 60 USD. I bet that this day will arrive before the end of the year, given the Saudis determination to let the prices slide and the stubborn behavior that one is currently observing from American oil producers. Oil prices below 60 USD will not be good news for many OPEC members, Russia, Brazil and Canada, among many other oil producers.

Nota F para G. Foster, presidente da Petrobras!


Como se avalia um Chief Executive Officer (CEO) de uma empresa? Em um artigo para a revista Forbes, Joel Trammell (bio: I am the CEO of Khorus, a business management software system for CEOs; author of “The CEO Tightrope”(September 2014); co-founder and managing partner of private equity firm Lone Rock Technology Group; and Chair Emeritus of the Austin Technology Council. As a CEO, I built two companies from founding to nine-figure acquisitions by Fortune 500 companies. The CEO job is the most important but least prepared for role in business. To read my blog sugere a utilizacao de um cartao de notas de avaliacao em seis quesitos de suma importancia para um CEO:

1. Own the Vision – I use the word vision, but this area includes the entire corporate strategy. Has the CEO signed off on and communicated a clear vision, mission, corporate values and strategy to all stakeholders, both internal and external? Is it an effective strategy that leverages the unique strengths of the organization to establish a clear competitive advantage? Do employees come to work excited by the mission of the company? Do customers and shareholders know what to expect from the company?

(1. Ter controle da visao da empresa, incluindo a estrategia corporativa.)

2. Provide the Proper Human Resources – How many times have we heard CEOs say “Our people are our most important resource”? If that is the case, then has the CEO built a company whose people are clearly better than the competition? It is easy for the CEO to say we have great people, but if they are not as good as the competition at acquiring talent, then the company is at a competitive disadvantage every day in the market. While all the members of the team are important, the board and CEO should pay special attention to the executive team and provide clear succession planning. In the human resources area, the board should consider two key questions: Is the CEO getting the right people? And then, is the CEO making sure they are developed to perform to their fullest potential?

(2. Contratar o melhor time de profissionais para trabalhar na empresa.)

3. Provide the Proper Capital and Other Resources – No business can continue to function without the proper financial resources. Those resources can come from external funding sources or from the internal operations of the company. The CEO must constantly anticipate the needs of the organization and not allow a shortage of resources to cause the company to miss opportunities. Additionally, the CEO is the one person in the company in the position to bring in external expertise. Has the CEO attracted the right board members and surrounded himself with external advisors and service providers that can provide real value to the company?

(3. Obter recursos financeiros a custos baixos.)

4. Build the Culture – I define culture simply as how things get done in an organization. High-performance cultures don’t just appear, as they require a CEO who understands what motivates people throughout the organization. Too many CEOs allow the culture to develop organically and then are surprised when people develop attitudes that aren’t aligned with the company’s vision, mission and goals. Is the CEO setting the standards for the company or is each employee left to his or her own standards? Are the company’s stated values applied consistently across the company? Is the culture driving a high level of performance consistently across the organization, or is performance highly variable based upon the particular group?

(4. Construir a “cultura” da empresa, formar habitos de trabalho coerentes com os objetivos da empresa.)

5. Make Decisions Well – Decisions are the fuel on which every organization runs. The quality and speed with which decisions are made determine the productivity of the organization. The CEO is responsible not only for the decisions he makes but also any decisions his management team makes. Building an organization that consistently makes thoughtful choices in a timely manner is one of toughest but most valuable things a CEO can accomplish. Does the organization run like a well-oiled machine or are there constant stops and starts as decisions are either: 1) not made or 2) have to be sent to the top for review?

(5. Excelente qualidade na tomada de decisoes.)

6. Deliver Performance – At the end of the day as we all know, CEOs are responsible for delivering performance. The challenge with evaluating performance directly is that it often takes years to see how things play out. Instead of just waiting to see what happens, the CEO must work with his management team to understand the key metrics in each area that will lead to superior performance. I worked with new executives and directors to agree on the three to five metrics that would drive performance in their area. Is there a clear system of goals and metrics that tie to the vision, mission, values and strategy of the company? Does the CEO know what makes the business work, and can he identify problem areas before they significantly impact performance?

(6. Efetividade em performance.)

Minha avaliacao da performance da presidente da Petrobras nos seis quesitos:

1. Ter controle da visao da empresa, incluindo a estrategia corporativa: Nota F.

Foster nao tem controle da visao da empresa. As politicas de precos da gasolina (que nos ultimos anos estao na contramao do mercado) e o escandalo de corrupcao da empresa demonstram que Foster nao tem uma estrategia corporativa e nao tem controle da empresa. Os interesses do governo ditam as regras e a visao da empresa. Portanto, a Foster e’ uma marionete. Se fosse uma CEO de verdade, ja teria pedido demissao!

2. Contratar o melhor time de profissionais para trabalhar na empresa: Nota F.

A nota acima nao se refere aos individuos concursados, pois este processo de escolha e’ objetivo e exogeno a tomada de decisoes de Foster. A nota se refere a cargos de confianca, os quais ela deve exercer algum poder de decisao. O escandalo de corrupcao demonstrou que alguns diretores da Petrobras nao tinham o perfil adequado para suas funcoes.

3. Obter recursos financeiros a custos baixos: Nota F.

A Petrobras foi rebaixada pela Mood’s ha pouco tempo atras. Alguns dos motivos de seu rebaixamento foram o alto grau de endividamento e o alto grau de incerteza com relacao aos investimentos da empresa. O rebaixamento da avaliacao de credito aumentou os custos de obtencao de financiamentos no mercado internacional.

4. Construir a “cultura” da empresa, formar habitos de trabalho coerentes com os objetivos da empresa. Nota F.

Mais uma vez, a nota acima nao se aplica aos individuos que ingressaram na Petrobras por concursos e que foram submetidos ao processo de capacitacao que ocorre dentro da empresa. Estes fatores sao exogenos a gestao de Foster. Claramente, a presidente nao agiu para a formacao de bons habitos de trabalho em sua diretoria, como ja foi evidenciado no escandalo de corrupcao.

5. Excelente qualidade na tomada de decisoes. Nota F.

As politicas de preco de combustiveis, o escandalo de corrupcao, o alto grau de endividamento e o baixo retorno esperado dos investimentos demonstram que a qualidade na tomada de decisoes foi pessima!

6. Efetividade em performance. Nota F.

No dia 9 de fevereiro de 2012, quando Foster assumiu a presidencia da Petrobras, o valor da acao da empresa no NYSE era igual a 32,13 dolares. Ontem, o valor da acao ficou em 8,82 dolares. Ou seja, desde que assumiu a empresa, o valor da mesma caiu 72.55%. O escandalo de corrupcao, sem duvidas, contribuiu para esta queda. Porem, o valor da acao da Petrobras no dia 5 de julho de 2013 ja havia chegado a 12,13 dolares, o equivalente a 37,75% de seu valor no dia 9 de fevereiro de 2012. Portanto, a efetividade em performance da presidente Foster durante estes 34 meses de gestao e’ pessima, quando se leva em consideracao os fatores ja discutidos anteriormente assim como a variacao de valor da empresa no NYSE.

Leadership has its costs: Saudis will feel the hit again!

The Saudis are playing a hard game (usually called a “game of chicken”) with oil producers in the USA, Canada and Russia, among others who are not producing oil in OPEC-member countries. The Saudis are prepared to let oil prices to stabilize below 60 US dollars per barrel, if this is what takes to push some of their stubborn competitors out of business (

But, such a strategy may backfire because some OPEC members are not too happy to play this game of chicken with non-OPEC producers. If, indeed, a cut in OPEC’s supply is warranted, who will feel the hit? Venezuela, Iran? Not likely. The leader will need to once again show that it is prepared to face the costs. So, there it will go Saudis, hit again!

In another post, I made a forecast that Brent will be lower than 60 USD per barrel on January 1, 2015. This forecast looks even more likely now.

Crescimento NEGATIVO em 2015! Comediantes dizem que PIB ira crescer 0,8% em 2015

So tem comediante neste governo Dilma. Reduziram a taxa de crescimento do PIB em 2015 para 0,8%. Como e’ que isto ira acontecer? Veja abaixo como esta a situacao do PIB em 2014 abaixo. Dada a pessima situacao da industria, o arrocho economico que tera que ser feito no ano que vem (ou reducao do gasto publico ou aumento dos impostos, ou ambos) e dada a reducao da credibilidade do Brasil no mercado mundial, este governo so’ pode estar de brincadeira.

Eu aposto em crescimento NEGATIVO.

Se isto acontecer, como ira ficar a meta de superavit? Devemos esperar mais um decreto para eliminar o superavit em dezembro de 2015?


Afivelem os cintos que a “pilota” (G. Foster) sumiu! Petrobras em queda livre!

Petroleo Brasileiro 12-4-14 NYSE_Page_1

Como se as noticias do escandalo que escancaram os jornais nacionais e internacionais ja nao fossem suficientes para reduzir o valor da Petrobras no mercado, hoje o ECB anunciou que as previsoes de crescimento para a Uniao Europeia este ano e no proximo devem ser revisadas para baixo. O ECB tambem informou que nao ira fazer nada para aquecer a economia europeia por enquanto.

Estas mensagens ja foram diluidas pelo mercado. Os mercados financeiros na Europa, EUA, Canada, etc., estao caindo. Estao caindo tambem os precos do petroleo. O Brent, por exemplo, esta 66,63 dolares por barril:

Energy & Oil Prices_ Natural Gas, Gasoline and Crude Oil - Bloomberg - 12-4-14_Page_1

Como analistas internacionais entendem que o custo do barril no Pre-Sal e’ igual a 70 dolares, os investimentos feitos pela Petrobras no Pre-Sal irao dar prejuizo se o preco do petroleo se estabilizar abaixo de 70 dolares durante os proximos meses. Dadas as noticias ruins que afetam a demanda e as noticias mais recentes de uma guerra por fatia de mercado sendo travada entre OPEC e EUA (alem da Russia), o preco do barril devera permanecer abaixo dos 70 dolares caso nao haja algum choque positivo de demanda ou de oferta. Um choque positivo de demanda podera acontecer se a China comprar um excedente significativo de petroleo para aumentar os seus estoques do produto. Um choque positivo de oferta podera acontecer se a OPEC decidir reduzir a sua oferta global, atendendo pressoes internas de paises como o Ira e a Venezuela.

Sliding oil prices: Avalanche ahead?

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Last week, OPEC decided to keep its global supply constant at 30 million barrels per day. The impacts of this decision are now well-known: oil prices (both Brent and WTI) fell by nearly 8%. These impacts were supply driven.

Today, the ECB announced that GDP and inflation numbers for the EU should be lower than expected and it also announced that no new stimulus will be implemented before next year:

“Let me now explain our assessment in greater detail, starting with the economic analysis. Real GDP in the euro area rose by 0.2%, quarter on quarter, in the third quarter of this year. This was in line with earlier indications of a weakening in the euro area’s growth momentum, leading to a downward revision of the outlook for euro area real GDP growth in the most recent forecasts. The latest data and survey evidence up to November confirm this picture of a weaker growth profile in the period ahead. At the same time, the outlook for a modest economic recovery remains in place. On the one hand, domestic demand should be supported by our monetary policy measures, the ongoing improvements in financial conditions, the progress made in fiscal consolidation and structural reforms, and significantly lower energy prices supporting real disposable income. Furthermore, demand for exports should benefit from the global recovery. On the other hand, the recovery is likely to continue to be dampened by high unemployment, sizeable unutilised capacity, and the necessary balance sheet adjustments in the public and private sectors.

These elements are reflected in the December 2014 Eurosystem staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 0.8% in 2014, 1.0% in 2015 and 1.5% in 2016. Compared with the September 2014 ECB staff macroeconomic projections, the projections for real GDP growth have been revised substantially downwards. Downward revisions were made to the projections for both domestic demand and net exports.

The risks surrounding the economic outlook for the euro area are on the downside. In particular, the weak euro area growth momentum, alongside high geopolitical risks, has the potential to dampen confidence and especially private investment. In addition, insufficient progress in structural reforms in euro area countries constitutes a key downward risk to the economic outlook.

According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.3% in November 2014, after 0.4% in October. Compared with the previous month, this mainly reflects a stronger fall in energy price inflation and a somewhat lower annual increase in services prices. Taking into account the current environment of very low rates of inflation, it will be important to assess the broader impact of recent oil price developments on medium-term inflation trends and to avoid spillovers to inflation expectations and wage formation.

Against the background of recent oil price developments, it is crucial to recall that forecasts and projections are based on technical assumptions, especially for oil prices and exchange rates. On the basis of information available in mid-November, at the time the December 2014 Eurosystem staff macroeconomic projections for the euro area were finalised, annual HICP inflation was foreseen to reach 0.5% in 2014, 0.7% in 2015 and 1.3% in 2016. In comparison with the September 2014 ECB staff macroeconomic projections, they have been revised significantly downwards. These revisions reflect mainly lower oil prices in euro terms and the impact of the downwardly revised outlook for growth, but they do not yet incorporate the fall in oil prices over the past few weeks following the cut-off date for the projections. Over the coming months, annual HICP inflation rates could experience renewed downward movements, given the recent further decline in oil prices.” (Mr. Mario Draghi, President of the ECB)

A stock market analyst in Europe reacted as follows:

“He cut inflation and GDP estimates and postponed monetary stimulus. It couldn’t go worse than that,” said Vincenzo Longo, a strategist with IG in Milan.


Interestingly, ECB is already factoring in the recent trend in oil prices in their analysis. The slide in oil prices has in great part been motivated by disappointing news regarding the level of economic activity in the EU in September. But, today’s announcement that the earlier expectations should be revised down significantly implies that European demands for goods and services in 2015 will also be lower than the expectations both government officials and market specialists had in September. The effects of lower than expected European demands will be felt across the globe. One immediate impact is already noticeable: oil prices are falling again today!

Recent supply and demand shocks are fueling the downhill pattern that governs the evolution of oil prices. How low will the oil prices get by January 1, 2015? I bet Brent will be lower than 60 USD per barrel.

To see what is happening to oil prices today, click here:


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