Latin America Looks at West’s Fiscal Crises, and Sees Its Own Past

[doom&gloom]

And I get these incredulous looks when I tell people I invest in Latin America...


http://www.nytimes.com/2012/01/28/wo...ic-crises.html


*snip*

For many months now, Latin Americans have been monitoring the constant drumbeat of crises in developed countries with bewilderment, irony and, yes, even a bit of schadenfreude. To them, Europe and the United States are displaying problems once associated with their region, which, not long ago, was a perennial champion in financial crises and bailouts.
“The mood on the streets of Paris is depressing, with people clearly worried about the future,” said Maria Cristina Terra, a Brazilian economist who moved to France four years ago and was back here this month to conduct research. “It’s a shock to all of us who saw Europe as solid and prosperous, but the contrast with Brazil is immense.”

In 2011, Latin America’s unemployment rate fell to a 21-year low of 6.8 percent, compared with 8.5 percent in the United States and nearly 10 percent in Europe. While economic growth has slowed in some countries, it is still booming in others. Panama, whose canal is choked to capacity, registered economic growth of 10.5 percent in the first nine months of 2011. Argentina’s economy expanded 9.3 percent in the third quarter.

Nowhere is the new mood more evident than in Brazil, which recently passed Britain as the world’s sixth-largest economy. Despite some recent economic weakness, Brazil’s unemployment rate is at a historic low of 4.7 percent. Veja, a leading newsmagazine, celebrated in a cover story this month the creation of new millionaires at a rate of 19 a day. By some measures, São Paulo’s financial sector is the envy of Wall Street: The market value of one bank, Itaú, now exceeds those of Goldman Sachs and Morgan Stanley combined.

All of this is still hard for some people in Brazil to absorb. But these days, so many increasingly affluent Brazilians are traveling abroad that they see the contrasts with their own eyes.

*snip*

[Southernguy]

Re: Latin America Looks at West’s Fiscal Crises, and Sees Its Own Past

Brazillians are ther rich people everywhere. From Miami to Barcelona. They buy everything, from de luxe consumer goods to real estate.
However, that´s de situation of a golden elite 10-20% at best of the population. the rest works and lives on a day to day basis. And there is maybe 30% of the low income people who eat because of "bolsa familia", some essential goods subsidy by the state.
There´s a lot of credit around, an overvalued currency and a terrible income inequality, Gini index around 50.
The industry has been partially destroyed by the overvalued currency and a flood of imports.
GDP is stagnant right now.
I don´t think this is sustainable.
Argentina is a completely different matter.
There is a very serious attempt at reindustrilazation there.
And they have for more than ten years been out of credit markets.
Which is a very good thing indeed.
Let´s see what happens in a 2-3 years timeframe.

[doom&gloom]

Re: Latin America Looks at West’s Fiscal Crises, and Sees Its Own Past

US Gini is .45 at present. Loks more like Brasil is in ascendance, the US not so much...

All of Latin America has always had horrible wealth disparity. We're catching up very fast.