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from Global Investing:

Emerging Policy: Rate cuts proliferate

Emerging market central banks have clearly taken to heart the recent IMF warning that there is "an alarmingly high risk"  of a deeper global growth slump.

Two central banks have cut interest rates in the past 24 hours: Brazil  extended its year-long policy easing campaign with a quarter point cut to bring interest rates to a record low 7.25 percent and the Bank of Korea (BoK) also delivered a 25 basis point cut to 2.75 percent.  All eyes now are on Singapore which is expected to ease monetary policy on Friday while Turkey could do so next week and a Polish rate cut is looking a foregone conclusion for November.

South Africa, Hungary, Colombia, China and Turkey have eased policy in recent months while India has cut bank reserve ratios to spur lending.

The BoK's explanation for its move shows how alarmed policymakers are becoming by the gloom  all around them. Its decision did not surprise markets but its (extremely dovish) post-meeting rhetoric did.  The bank said both exports and domestic demand were "lacklustre".  (A change from July when it admitted exports were flagging but said domestic demand was resilient) But consumption has clearly failed to pick up after July's surprise rate cut -- retail sales disappointed even during September's festival season.  BoK clearly expects things to get worse: it noted that " a cut now is better than later to help the economy".

from David Rohde:

How a place like Brazil can be a job creator for the U.S.

VITORIA DE SANTO ANTAO, Brazil – Last year, Kraft built a gleaming new factory on the outskirts of this town in northeastern Brazil. When I visited it last month, my heart sank.

The state-of-the art, $80 million facility seemed to be yet another example of the inevitable shift of jobs from a declining America to emerging powers like Brazil, China and India.

from David Rohde:

The BRIC laggard

SAO PAULO – For decades, Denis Dias’s parents could never break into Brazil’s middle class. They started a bakery and a pizzeria in the 1970s and 1980s, but the country’s economic instability and hyper-inflation consumed their businesses and their hopes. His father ended up owning a newsstand. His mother worked as a maid. And Denis attended dilapidated state-run schools.

Over the last 10 years, Denis and at least 35 million other Brazilians have achieved their parents’ dream. Denis is a corporate lawyer at a Brazilian energy company and a new member of Brazil’s middle class, now 100 million people strong. Denis, his company and his nation have ridden the exports of iron ore, soy, oil and other natural resources to prosperity.

from Global Investing:

This week in EM, expect more doves

With the U.S. Fed having cranked up its printing presses, there seems little to stop emerging central banks from extending their own rate cut campaigns this week.

The most interesting meeting promises to be in the Czech Republic. We saw some extraordinary verbal intervention last week from Governor Miroslav Singer, implying not only a rate cut but also recourse to "unconventional" monetary loosening tools. Of the 21 analysts polled by Reuters, 18 are expecting a rate cut on Thursday to a record low 0.25 percent.  Indeed, in a world of currency wars, a rate cut could be just what the recession-mired Czech economy needs. But Singer's deputy, Moimir Hampl,  has muddled the waters by refuting the need for any unusual policies or even rate cuts.  Expect a heated debate (forward markets are siding with Singer and pricing a rate cut).

from Photographers' Blog:

The king of the Amazon

By Bruno Kelly

It was a dream come true for me to accompany the men who fish the pirarucu, South America’s largest freshwater fish. It was even more so to do it in the region of the Juruá River, one of the most inhospitable, winding and virgin rivers in the Amazon Basin.

The pirarucu, also known as the arapaima, is considered a living fossil. The adventure to fish them began from our departure from Manaus in an amphibious plane able to set down on dry land or water, called a Grand Caravan. Our pilot assured us that this is one of the few light aircraft certified to transport the president of the United States, and that left us much less nervous since we were heading into a region with nothing more than jungle and rivers below us.

from Global Investing:

Fed re-ignites currency war (or currency skirmish)

The currency war is back.

Since last week when the Fed started its third round of money-printing (QE3), policymakers in emerging markets have been busily talking down their own currencies or acting to curb their rise. These efforts may gather pace now that Japan has also increased its asset-buying programme, with expectations that the extra liquidity unleashed by developed central banks will eventually find its way into the developing world.

The alarm over rising currencies was reflected in an unusual verbal intervention this week by the Czech central bank, with governor Miroslav Singer hinting at  more policy loosening ahead, possibly with the help of unconventional policy tools. Prague is not generally known for currency interventions -- analysts at Societe Generale point out its last direct interventions were conducted as far back as 2001-2002.  Even verbal intervention is quite rate -- it last resorted to this on a concerted basis in 2009, SoGen notes. Singer's words had a strong impact -- the Czech crown fell almost 1 percent against the euro.

from Photographers' Blog:

The silent drummers

By Nacho Doce

A photograph may be deaf and mute, but it speaks through the interpretation and feelings of each viewer. We might say that feelings are among the few things not yet globalized in the 21st Century.

SLIDESHOW: MUSIC OF SILENCE

For the second time I found myself doing a story on handicapped children in Brazil, but this time deaf musicians were very different from blind ballerinas. What I found truly gratifying about the ballerinas was what they achieved deserved fame. Well after finishing that story, they performed in the closing ceremony of the 2012 London Paralympics. This time we decided to do a story on a music school for deaf children, only to find out after that they are invited to play Brazil’s National Anthem on their drums in the opening ceremony of the upcoming 2014 World Cup.

from Global Investing:

No BRIC without China

Jim O' Neill, creator of the BRIC investment concept, has been exasperated by repeated calls in the past to exclude one or another country from the quartet, based on either economic growth rates, equity performance or market structure. In the early years, Brazil's eligibility for BRIC was often questioned due to its anaemic growth; then it was the turn of oil-dependent Russia. Over the past couple of years many turned their sights on India due to its reform stupor. They have suggested removing it and including Indonesia in its place.

All these detractors should focus on China.

China's validity in BRIC has never been questioned. Aside from the fact that BRI does not really have a ring, that's not surprising. China's growth rates plus undoubted political and economic clout on the international stage put  it head and shoulders above the other three. And after all, it is Chinese demand which drives a large part of the Russian and Brazilian economies.

from Photographers' Blog:

Brazil’s exclusively inclusive church

By Paulo Whitaker

In Brazil we have a saying, "Soccer and religion are sacred." Here, as with one’s choice of a favorite soccer team, one’s choice of religion is also not up for discussion. When I discovered here in Sao Paulo a church run by a missionary and a pastor who are lesbian partners, I thought it would be an interesting photo story.

In this megalopolis, there already are a few evangelical churches that are inclusive, accepting people regardless of race, color, economic situation and sexual preference, but the Cidade de Refugio (City Refuge) is the first in Brazil to cater almost exclusively to the gay community. This church, part of the network of the evangelical Assemblies of God, is led by Lanna Holder, a lesbian activist who uses the title of Missionary.

from Photographers' Blog:

Rio’s ballerinas

By Pilar Olivares

When I first reached Ballet Santa Teresa’s school for underprivileged girls and met the students, I didn’t take a single picture. I didn’t dare to. The girls, who are almost all from families living in some form of social risk, approached as if confronting me, dancing and yelling.

For a while I felt like an intruder. They were wearing jeans instead of ballet dresses, and were listening to Rio’s famous funk carioca music. At my home in a mountainous neighborhood of Rio, I hear funk floating towards us from the surrounding shantytowns known the world over as favelas.

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