Now add to that:
1. The demographic nightmare that China will soon be facing.
2. The global financial crisis which continues and China which will see little choice but to loosen its monetary policy even further, slashing Chinese economical growth and result in massive unemployment, which will lead to social instability.

If there is one thing that Europa underestimates than it’s the impact of a bursting Chinese Real Estate bubble. The bubble has grown mainly on the residential side of teh market, but with Beijing’s 4 trillion yan or 586 billion USD stimulus package, the bubble also started growing on the commercial side in 2009.  Remember that China pumped worth 12,9% of its GDP in stimulus packages in 2009. By way of comparison: Brazil invested less than 2% of its GDP in stimulus packages to support growth.
With 70 percent of real estate investment in China coming from bank loans, a dramatic drop in land values could send shock waves throughout the economy.

Stratfor published last week an excellent report on the Chinese Real Estate bubble, you can read it here.
Especially in Beijing and Shangai the situation is dramatic.  In both cities, real estate activities have accounted for more than 30% of the GDP since 2000.  In Shangai real estate activities even contributed more than 50% of the GDP.  A GDP which is sustained for more than 50% on an inflated real estate bubble…

No doubt there is a correction ahead on the stock exchange, but when one adds thhe extent of the inflated China real estate bubble, one could wonder how big the downward slope ahead could really be.

Meanwhile, the family Huts of Katoen Natie is also active as a project developer in Uruguay, building a complete town: Jacksonville, in the Zonamerica. They bought the Alesianen convent with 560 hectares and are making alotments in that zone with schools, hospitals, a Regency hotel,…

Meanwhile in Rio de Janeiro, Eike Batista, Brazil’s richest man is building Porto Açu, a complete new harbor and container terminal.

Below an interview with Fernand Huts of Katoen Natie in Montevideo today:

We follow-up news in  Brazil through O Globo and Folha Sao Paulo.  Both excellent newspaper, but you need a subscription on the printed edition before you can browse the digital edition online.   Globo even launched its digital version on Kindle, the first newspaper in Latin America. And of course you had Brazilian economical newspapers like the excellent Valor Econômico or Jornal do Comercio.  But it they could never seduce me to take a subscription, for the same reasons as De Tijd and De Standaard in Belgium can no longer seduce me to take a subscription: a lack of true journalism and too much copy-paste of online material that is freely available.

The Portuguese Group Ongoing, which published “Diario Econmico” in Portugal launched “Brasil Econômico” this weekend.  Ongoing is the private investment vehicle of the Rocha dos Santos family.  They have a focus on Telecom, Media, Real Estate and Financial Services with georgraphical focus on Portugal, Portuguese speaking countries, Africa and Spain.
The newspaper launched on a print run of 55.000, that is more than the 47.700 run of De Tijd in Belgium.  Smart move of the Rocha dos Santos people.

The online edition of Brasil Economico is excellent; both the interface and the content.   You can find a free demo of the October 9 and 10 editions here. The good news is that soon you’ll be able to sign-up online for a digital-only subscription on Brasil Economico.

One might argue that despite this 25% appreciation of the Brazilian current, the Brazilian commercial balance yielded a 21,69 billion US$ surplus since January 2009.  Just as one might argue that despite the depreciation of the dollar, the US trade deficit in August is still a hefty 3,6% of US GDP.

The IMF projects the Brazilian GDP to clock 2009 with a 0,3% growth; one of the few countries which will not end up in red.  The growth for 2010 is projected to be between 4,5% (IMF) and 5% (Mantega).

I have warned a year ago on this upcoming currency turmoil. Just look at the Chinese Yuan: it stayed in 2009 completely on-par with the dollar, Asia has been intervening heavily to support the dollar.  Brasil did also buy some dollars, yet on a more modest level.  Mantega himself said earlier in October “there’s nothing more Brasil can (read: wants) to do.

Meanwhile China’s press is fulminating against claims that the renminbi must be revalued. An editorial in Xinhua last week had this to say:

The Group of Seven rich nations have again pushed developing China to appreciate its currency, the RMB yuan, so as to promote a so-called “more balanced growth”. On Saturday, G7 central bankers’ meeting held in Turkey’s Istanbul failed to produce any significant boost to the world economy. Instead, they turned fire on China’s currency, blaming it for the financial crisis.
In so doing, the rich nations have obviously intended to shirk their due responsibilities in the wide-spreading global financial turmoil.  As it is known to all that the current crisis has been a result of developed countries’ lax financial regulation, excessive consumption and their lasting monopoly on the international financial system.

Everyone seems to agree that as part of the necessary global rebalancing the US will have to reduce its net imports, and this will be achieved in part by a depreciation in the value of the dollar, but everyone also seems to agree just as fervently that any reduction of the US trade deficit should not come at their expense, but rather at the expense of the rest of the world.Europe says it is Asian that must appreciate, Asians implicitly insist that it is Europe that must appreciate. It doesn’t take a PhD to see the mathematical difficulty.

My reaction to this is: Brazil already appreciated its currency, while the impact for Asia and Brasil is still ahead.

And you ask why Brasil’s growth is still healthy despite it’s 25% currency appreciation?  The answer is: it’s internal market.

The US will fight like a woonded lion to depreciate its currency against the Yuan and the Euro; read this article in the Financial Times of last Thursday.

But I believe the US won’t win this one.  The fact is that these trade disputes are not going to go away, and because each side has legitimate complaints, or at least what seems like legitimate complaints to domestic audiences, without serious global coordination (can take ages) the only very likely outcome is even more trade disputes. And these are disputes which will be won by the country or countries that control the one resource everyone in the world wants: net demand.  And net demand is something Brazil has plenty of and China is short of.

This means that if surplus countries don’t allow for a rapid and orderly adjustment of the imbalances, which will require a rise in the value of their currencies among other things, the same thing will be achieved by trade conflict. Meanwhile Brazil should focus on the sovereign fund plans they have, it will be strong economical weapon in the oil-rich future.

End September, Merrill Lynch published its monthly FX forecast.  The USD trades now at 1,73 agains the BRL, they consider the USD still to be 10% overvaluated against the BRL and project it to fall to 1,6 against the BRL.  This is exactly the June 2008 when the BRL was trading at its top level.  Completely aside: also take notice of the South Africa Rand, which they consider to be 16% overvaluated against the USD.

More interesting even are the future projections they make.

1. The US Dollar versus the Brazilian Real
They project the dollar to appreciate 7% from end December 2009 till March 2010, but eventually by end 2010, the dollar would fall against the Real to 1,65 (3% less then  the end 2009 rate).

2. The Euro versus the Dollar:
The Euro would continiously fall against the dollar throughout the coming year and end at 1,28 against the dollar, that is a 17% decrease in value.

1+2 would mean that the Euro would fall 20% against the Real from today until end 2010.  This would mean that by end 2010, the Euro would trade at 2,12 against the Real.   This seems highly unlikeable to me (give and take you get 2 Reais for 1 Euro).  On the other hand: I do agree that the Euro will fall against the dollar by 2010 and that the Brazilian Real will more or less remain it’s current rate against the dollar.

Nicolas Eyzaguirre, director of the Eastern Hemisphere of the IMF, announced last week that Brasil should recuperate faster than any other Latin American country from the crisis.
The IMF announced in Istanbul last week that Brasil’s challenge is to “manage it’s abundance of wealth”.

Brasil officially declared in Istanbul that it will inject 10 million US$ of its reserves into the IMF; funds that the IMF will use to sustain countries in trouble.

Excellent 10 minute coverage.

If she really had the intention to come to Brazil, why the fuzz?
She had a plane ticket leaving on Friday 4th, which made she would land on Saturday 5 in Sao Paulo.   She got her Visa un Sunday 6th and… Monday September 7th is Independence Day in Brazil (no business which is open).  So, why didn’t Sarah just reschedule her flight to leave on Sunday 6th or Monday 7th?  She wouldn’t have missed a thing in Brazil (no meetings on Synday and monday – national holiday-).  Even if her plane ticket was a non-changeable one, buying a new ticket San Francisco – Sao Paulo can’t cost more than 1.000 US$; much less than the “thousands of dollars” of sunk cost Sarah now claims to have lost.

Which brings me to my core point: Sarah had second thoughts of coming to Brazil, mainly because of her husband trying to stop her from going.  So she needed an excused, a public one and she invented one where  she put the blame on the Brazilian flag.

Let’s go back in time: two weeks ago I posted on  Sarah Lacy of Techncrunch planning to go to Brazil, a first timer for the girl.
Good news, a US journalist really taking the effort to cover the Brazilian booming tech scene.
All was fine until…last Thursday she posted this.

A wave of protest came upon Sarah’s childish and selfish post, to such extent that it is already covered on Wikipedia.

Let’s sum things up:

1. Americans are known throughout the world for their, by whiles very annoying, attitude of supremacy.
Brazil is not a country which will easily accept this behavior.  Brazilians are known for their hospitality, just read this post of a San Francisco emigrant who know lives in Florianopolis, Brazil and compares life in Brazil with life in San Francisco.  The problem is that people like Sarah leave with the wrong attitude to Brazil.  It’s clear this was Sarah’s first visit to Brazil and that she was completely unprepared.  As Tom Jobim said: “Brazil is not for beginners”.
And let’s face it, the Techcrunch boys and girls are not really journalists, so it’s normal they struggle to get past the obvious thing as getting a Visa.  Compare that to Jenny Wortham, technology journalist of the New York Times (read: a real journalist) who was packing on Friday for Brazil.  So the “computer problems” at Brazilian embassies Sarah wants to point to can’t be all that bad if Jenny did manage to get her Visa !
The real issue of Sara is that she is blinded by her self-importance: it’s all me-me-me-me.
2. Brazil doesn’t accept a bullying attitude from foreigners wanting to explore and enjoy their country.  Remember this American pilot who tought he could stick out his middle finger to Brazilian immigration?  Or these two Briton girls who wanted to pull of a fraud trick in Brazil?
Bad idea.  Brazil and Brazilians have a very simple rule: the rule of reciprocity: “we treat you the way you treat us”; Brazilians even extend this to their Visa policies.  I love that attitude a a Belgian.  We don’t give Brazilians troubles at our borders (actually, the Belgian immigration officers had my wife’s Brazilian passport back to her with an, “obrigada”) and likewise Brazil treats me kind.
Brazil has more than 5 million tourists entering the country every year; 625.000 of them are Americans.  More than 1.700 Americans every day who get their Visa for a trip to Brazil without any problem.
But Sarah, naive and unprepared as she is didn’t manage to get it.  Why didn’t she want herself to the Brazilian consulate to hand it in and pick it up?  Brazilians who want a Visa to the US need an interview in the US embassy…
3. Sarah writes “The country should be embarrassed, and its businesses should be furious. I’m going to aim to try this whole Brazil thing again in December or January. It’s not the entrepreneurs’ or our readers’ fault this happened, and I still believe there are great stories in Brazil that I want to report. But when you’re harder to get into than China, it doesn’t bode well for foreign investment, Brazil.”
Sarah, what has your inability to get a Visa got to do with Brazil’s foreign investments?  Brazil’s foreign investments are doing just great and the United States can only dream of the Brazilian trade balance.
We perfectlty understand you are frustrated, but why can’t you just be frustated with yourself instead of being intolerant towards the nation you wished to visit and starting this personal rant?
Earlier in August you wrote “Why am I so angry these days?“.  Exactly, thousands of people wonder exactly that !
It would have been an interesting article of you had actually talked about the lost opportunities, or the state of the world in terms of labor mobility or did some research on how many people can’t travel for bureaucratic reasons. Or anything tangently related to this issue, but you completely missed it and wrote something completely unprofessional.
And people would have even give you a break if you would have let steam of on your personal blog, facebook wall or twitter. But Techcrunch was not the place to vent your frustration, which, again, you should have channeled in teh first place to yourself: you have simply not been able to get your Visa to Brazil; whereas 1.700 Americans every day do succeed in that task.
This could have been an excellent occasion for you to start your chapter on Brazil explaining what Jeitinho is, but again: you missed to dicover this essential skillset of Brazilian entrepeneurs.
4. Can you actually proof when you started the Visa application?  Every normal person knows you should calculate minimal 30 days to  get a Visa.  It is completely impossible for Brazilians to get a Visa to the US in 25 days.
5. “They’ve not only been screamed at by me, but loads of business travelers—and even a coach for a national soccer team who can’t get in the country.”  Which coach?  We are curious (actually: we don’t believe a word of it).
6. “In fact, it was the one place my husband had asked me not to visit, having heard many reports of kidnapping and violence. But I was resolutely convinced there was a world of exciting companies and stories and had been looking forward to the trip for months. In fact, I’d spent about four months studying Portuguese and planning the trip.”
Here it gets interesting:
Firstly: I don’t believe you actually studied Portuguese. Give me 60 seconds on Skype to test 10 very basic words…
Second: your husband seems ill-informed. He does realize that 10 United States cities have higher crime rates than Sao Paulo where you would spend most of your trime as you wrote? Atlanta, Philadelphia, Washington, Detroit, Newark, Oakland, St Louis, Baltimore, Buffalo, Cleveland,…
Sarah, your husband does allow you to travel to those cities in the US, does he?
Actually, last week the top 10 most dangerous cities in the world were published: Cape Town features next to Baltimore and New Orleans (on number 2!).  No Brazilian city in the list.
Maybe a first crack in your marriage: the jealous husband not allowing his wife to travel to sexy Brazil?
7. And then you had to call upon your friend Paul Carr to help you out.  But it didn’t really work, did it?  This comment summed it up pretty well.
8. And then on Sunday evening Sarah had to write another post.  But again she couldn’t utter sorry and again it was all me-me-me:
“Loads of South American entrepreneurs I’ve never met were excited about some Valley coverage.”
Really?  The first lesson you should learn about Brazil is it’s self-suffiency.  What could Brazilian entrepeneurs possible need from The Valley?
Users?  They’d rather/better look elsewhere for international expansion?  Money?  No thanks for the US debts.  Private Equity funds?  Enough wealth in Sao Paulo, look to the financing of Monashees and the many boutique investment shops in Brazil?  Expertise from the Valley?  Don’t make them laugh.
“and even spent several months learning Portuguese”
Proof it Sarah, that you can speak and understand 10 basic words of Portuguese.
“Indeed, I said at the end of the post, I was going to come later in the year, and had started re-arranging my schedule to come in December.”
Comon Sarah, everyone knows that you will never go to Brazil.  You lack the proper open-mind to cover a country like Brazil.  And, like you wrote yourself: youyr husband doesn’t allow you to leave to Brazil.
“Yeah, I spent thousands of dollars and wasted countless hours for months planning a trip that I never wanted to take all along. How’d you figure it out!“
Seriously now, what did you actually spend thousands of dollars on?  The Portuguese Assimil CD-rom and plane ticket can’t have costed more than 1.000 US$.
“Not only that, but I don’t know any US business reporter who spends thousand of dollars of his or her own money to travel to other countries and give amazing entrepreneurs the exposure they deserve.”
Check out Jenny Wortham, technology journalist of the New York Times (read that Sarah: a real journalist) who was packing on Friday for Brazil.
“This whole thing worries me that maybe the premise for this new book is wrong. Not the core premise– that the greatest opportunity to build the next wave of multi-billion companies is outside the US. I still believe that opportunity is there. And I’ve traveled enough to see that the talent is there. But when people’s families are threatened over a post about burocratic ineptitude, a lot of potential investors, business partners or acquirers will decide maybe that opportunity just isn’t worth it. There’s a real risk that that opportunity never gets fully realized and that’s bad for everyone.”
Sarah, you don’t get it.  Brazil is not asking you to come. You were visiting them, because you needed to write your book to earn your money.  A book on Emerging countries that no Brazilian is interested in, they are the emerging part, remember?  It is the IMF who needs the Brazilian money, the United States who yearns for its oil, China who drools over its steel, Europe who needs its chicken, Turkey who flies their Embraer planes,….
The investors are already in Brazil and they are doing just fine.  Google, Facebook, etc… are all flying up and down US-Brazil with no issues.  It is just you who didn’t get beyond the first obvious step: getting a Visa.
“Will I still go to Brazil in December? I don’t know. I want to. I have my visa now. But would you go to a country where people were threatening to spit in your face and rape you as soon as you arrive in exchange for, um, you wanting to help their businesses?”
Mind the word exchange !  Sarah, again, there is no exchange.  You were visiting Brazil to write your book and write you desperately need to finnish and write some columns on Techcrunch you were hoping to score with.  Brazil doesn’t need a Sarah Lacy “helping their business”.  What does Sarah Lacy can bring to Brazilian entrepeneurs that they haven’t already have.

As long as Americans like Sarah don’t start realizing that they are the demanding party and that they are demanding help to Brazil (investment opportunities, worthy stories, growth, natural resources,…) they are bound to fail and continue the track of American implosion.

Two predictions:
1. Sarah Lacy will never go to Brazil, not this year, not next year, no ever.
2. It won’t take more than 12 months before Sarah gets the boot at Techcrunch.  It’s always the same with the girl.

Techcrunch and Brazil?  Who cares.
The real busienssmen, who are responsible for the real foreign investments in Brazil and made the real 70% jump of the Bovespa since January, all read the New York Times with reporters like Jenny Wortham and have never heared of Techcrunch or Sarah Lacy.

The world knows what Sarah is missing and Rio de janeiro remains the happiest city in the world (as Forbes just published).

The real interesting dimension of this faiot-divers is the increasing frustrating of Americans and their attitude.  Last Friday, Forbes published this article on the “most happy cities” in the world.  The ranking was based on the 2009 Anholt-GfK Roper City Brand Index, released last June.  The research was compiled through online interviews with 10.000 respondents in 20 countries.  Rio de Janeiro came as number 1 in the ranking.  No surprise, if you have lived in Rio you’ll understand this “joie de vivre” of Cariocas.  But read then  the comments of the angry, frustrated Americans.
Sign of the times.  President Sarkozy is leaving today to Brazil where he will attend the Brazilian Indepence Day and sign major defence deals with Brazil.  France and Brazil have become increasingly strong allies and left the US completely out of the game.   France doesn’t put restrictions on its technology, whereas Boeing is subject to US congressional oversight for defense technology exports.  Bolovia in its turn then looks to China and Brazil for its planes, because the US blocked the sales of Czech planes.

Today Sarkozy announced in Brasilia that the G8 will open its doors for Brazil and 5 other emerging countries.  Also a new fact of life which is extremely hard to swallow for the United Statest.

Conclusion: under Obama the US foreign policy didn’t reallly change that much.

And again, the real big battle that is currently ongoing between the US and Brazil is for the 2016 Olympics.   Brazil deserves to be nominated on October 2, but I fear that once again the US supremacy and egoism will prevail.  To show to which extent the US are cowards: the latest news is that Obama himself wouldn’t even go to the nomination ceremony in Copenhagen on October 2nd; “his advisors are suggesting he should not go to the Danish capital as he could return home to the US as a loser”.
Personally I believe the US is using all threats and manipulation possible to win the 2016 games on their name.

The problem is twicefold:
1. Ageing became expensive, very expensive. Belgium is betting on building out it’s medical care in order to create jobs. But they forgot that this is … not productive. Ageing is extremely unproductive.
In Brazil, the life expentancy is 71,71 years, in Belgium is is 79,07 years. This means that an average Belgium has to work 10% more productive in his working time just to cover his extra life expectancy, and this figure is seriously underestimate since the cost of a year ageing is much more expensive in Belgium than it is in Brazil.
2. Brazil has a healthy population of workers and future workers to build the economy and make the country rich before they get old. Belgium simply doesn’t have the base of workers to support the massive bulk of retiring people which are exiting now the job market.

Below the demographic pyramid of Belgium in 20007, the picture is clear:a huge baby boom bulk of 45-60 year old people retiring without any base to supportthem.

1. Belgium:

More interesting are these 2025 extrapolations for China, Russia and Brazil:

1. China

In 2025 China has a huge mass of retired persons (born before the 60s) with no support below (in the 60s the 1 child per family has been imposed).
We believe that China is over-hyped as the cornerstone of BRIC success and that demographics will soon stifle the country’s economy as the number of workers declines and the numbers of elderly swell.
Considering the size of its population, demographical problems become in China quickly desasters considering its sheer size of population.

2. Russia:

Let’s not even look at Russia. Russia has one of the worst demographic profiles of the developed and developing world, and is losing population at a devastating rate that bodes a bleak future for its economy.

3. Brazil

On a demographic basis it is clear that Brazil has the most potential for continued long-term growth. The country has a healthy population of workers and future workers to build the economy and make the country rich before they get old.
- 2009 population: 196,6 million
- 2025 estimated population: 228,8 million (16,4% growth)

This is why people get the impression of the “Brazilian beautiful women” saga.  Whereas most countries in the world, equally China and Russia have much more +40 year old women in the street, Brazil has nearly no +50y old women in the street, all women you’ll see are -40.

Brazil had in 2008 18,72 births / 1.000 poulation and 6,35 deaths/1.000 population and a growth rate of 1,228% (that is: 2,42 million extra Brazilians in 2010 !).
Belgium had in 2008 10,22 births /1.000 population and 10,38 deaths / 1.000 population and a growth rate of 0,106% (due to immigration; this is only 11.028 extra people in 2010 !)
China had in 2008 13,71 births / 1.000 population and 7,03 deaths / 1.000 population and a growth rate of 0,629% (that is: 8,36 million extra Chinese in 2010)

Some highlights:

1. The Selic interest rate was lowered to 8,75% throughout the last year.  A historical low record.   Yet, the Brazilian Central Bank preserves its tight monetary policy, since inflation is today at 4%; the average of 2009 is expected to be 4,3%.  As you can see in the below chart, the Brazilian inflation rate remained below 6,6% since 2004 on and the Brazilian Central Bank maintains now an inflation target of 4,5% in the coming years.
Compare this to South Africa where the South African reserve bank lowered its prime interest rate to 7%, but where the inflation remains at 6,9%, last July it went up from 6,7% in June.

2. Since 2001, the Brazilian commercial balance has been positive and also today it remains positive.  This in sharp contrast to the structural negative commercial balances of Belgium and South Africa.

3. The Brazilian economy had a short temporary dip in the 4th quarter of 2008, but recovered strongly in the first and second quarter  of 2009.  The pace of recovery was noticeably stronger than the Chinese pace of recovery.  Luize Guilhereme Chymura of the Institute of the Getulio Vargas Foundation estimates the Brazilian GDP will grow 4% next year, but that he would not be surprised if it grows 5 or 6 percent.
“I believe the year of 2010 will be very positive for Brazilians. The economy will grow, the inflation will be low, and the local currency Real will likely appreciate against the U.S. dollar. The appreciation is good news for Brazilian consumers, as it means they can buy cheaper imported products,” he said.
“With this favorable economic scenario, the government will have a lot to say in next year’s presidential race. The government’s candidate will benefit from the positive economy, as well as from the salary rise of public employees,” Schymura said, referring to President Luiz Inacio Lula da Silva’s chief of staff Dilma Rousseff, who will run for the October 2010 presidential election.
But Schymura said the appreciation of the Real is bad news for the local manufacturing sector, which will face growing competition from cheaper imports.

4. Brazil has no foreign debts, their foreign reserves grew to 213,7 billion US$.

5. The interest rates are at a historical low of 8,75%.  However, the real interest rate is now 4%, which leaves the Brazilian reserve bank a more than comfortable buffer whenever needed.  In South Africa the real interest rate is today quasi 0%.    The below graph explains to a big extent the delta today between Brazil and most other countries: Brazil has’nt been polluted in the last decade by a cheap credit tsunami (let be subpime problems).   The focus of the Brazilian central bank has been inflation control and a tight monetary policy, quite the reverse of the policy in the US and to a certain extent Europe or South Africa.  It is only since 2002 that intrest rates came below 20%  and only since this year are interest rates in Brazil for the first time in history single-digit interest rates.  This means that for the first time a generation of consumers can get a bond to buy a house or appartment.

And expect this to happen: last week, Banco do Brasil, Latin America’s largest lender announced that they may double credit to individuals over the next decade as falling interest rates spur demand for car and home loans. Personal loans may climb to as high as 50 percent of the state-controlled bank’s total portfolio from 27% in the second quarter. Such lending rose 69% to 68.5 billion reais ($37.1 billion) in the three months ending June 30 after the central bank cut the benchmark below 10 percent for the first time.   Brazilian banks and households are completely unleveraged compared to their European and American counterparts and now is the time for Brazilian banks to seize the opportunity; read the full article on Bloomberg.

6. Brazilian banks keep lending money.  Below a chart comparing the rate of lending of all banks in Brazil.  The red line are the national private banks, the green the foreign banks and the blue lines are the Brazilian public bancs.  Actually, in Brazil more than 80% of the residential real estate financing happens through Caixa Economica and Banco do Brasil, two banks where the government has a majority stake.  If only the Belgian government had been wise enough to follow the same strategy and nationalise Fortis bank when the “shit hitted the fan”.

7. The cost of this crisis.  The below chart is absolutely impressive (2009 and 2010 estimates of the IMF).  While the United States will spend 13,6% of their GDP on stimulus packages in 2009 and 9,7% of GDP in 2010, Brazil will only spend 1,9% of their GDP on stimulus packages in 2009 and 0,8% in 2010.    Also see the huge difference between Brazil and Chine.
Another surprising factor is the countries which will spend more on stimuli in 2010 than 2009: Australia, Germany, Italy, France and South Africa.

8. The below chart needs to be compared with the Belgian figures…
End 2009 the Brazilian public debt will be 42,5% (coming from 53,5% in 2003); the IMF even projects only 41,9% for 2009.  This figure will decrease gradually to 28,4% by 2013.  In Belgium the graph goes the opposite direction: by 2014, the public debt will rise to 110% of the Belgian GDP.

9. Brazilian confidence.  63% of the Brazilians say the crisis only has a slight or no impact on them; a record-low compared to other countries.  Same reason: Brazilian households are not leveraged and no jobs are lossed.

10.  Since January 2009, the Brazilian stock index Bovespa went up 70%.

11. While the South African retail sales is in constant decline, Brazilian retail sales kept growing all since 2006 at rates above 4%.  In July retail sales grew 5,7%. Predictions are that the country’s retail sales will grow from around US$368bn in 2008 to US$573bn by 2013. Generally positive trends in underlying economic growth, an enormous and growing population and rising disposable income are key factors behind the forecast growth in Brazil’s retail sales. Easier access to credit and the emergence of a wealthier middle class are also likely to see the value of the retail segment increase during the forecast period.

With the population increasing from 192 million in 2008 to an estimated 204 million by 2013, GDP per capita is forecast to rise 39.7% (!) by the end of 2013, reaching US$11,449. This means that consumption per capita will rise from US$7,219 in 2008 to US$9,275 by 2013. The national monthly minimum wage rose 26% in real terms between 2003 and 2006, and by 2008 the average annual salary had reached US$9,160.

12. In the same line: car sales were in July up to 285.400 cars sold a month, this is a historic record for the country.

13. The crisis never had a really big effect on employment in Brazil. While in 2006 and 2007 Brazil had unemplyment figures hoovering around 10%, the unemployment figures never went above 8,9% in 2009. Since April unemployment has decreased substantially, reaching 8,0% in July, which is the same rate as in July 2008, before the crisis. Compare this to the unempoyment figures in the United States.

Also don’t underestimate the positive effect of Brazil’s demographics.
In 2005, 67.8% of the Brazilian population was described by the UN as active, with 40.3% in the crucial 20-44 age range. More than 84% of the population was classified by the UN as urban. By 2015, the urban population is forecast to have exceeded 88%, with 39.5% in the 20-44 age band, with 66.9% of the population is expected to be active.

The Mexican city Ciudad Juarez is featured on number 1, with 130 murders per 100.000 habitants.
The ranking continues:
2. Caracaz, Venezuela
3. New Orleans, United States (!!)
4. Tijuana, Mexico
5. Cape Town, South Africa (!!)
6. Port Moresby, Paua New Guinea
7. San Salvador, El Salvador
8. Medelin, Colombia
9. Baltimore, United States (!!)
10. Bagdad, Irak

No Brazilian towns are featured in the top 10, despite Cape Town ranking on number 5, as well as 2 United States cities in the top 10.

We would be very eager receiving the full report, so that we can check where Rio de Janeiro and Sao Paulo rank.