The Coming Renationalization of Petrobras.

Saudi Arabia is a monarchy. The princes and kings are some of the richest men in the world.

However, the average person in most Arab countries is poor.

Whereas a country near them, let's call it Israel which does not have vast oil reserves and is based on a democracy and capitalist economy has done much better for its citizens and as innovators of technology in that you can find many top Israel companies listed on the Nasdaq. Many network companies that were bought out by CISCO were started by Israel.

I personally had a friend who worked at one such company who was paid more per year than most people in South America make in 10 years.

Nationalization, socialism, and communism don't work or the USSR would still be in business. China itself has switched to mostly a market economy even though it has kept a leftist leadership. Unfortunately, those who support these failed leftist ideas of socialism can't back up their ramblings with real facts. For example, its in Exxon's benefit to have high gas prices. The stock has gone up and rewarded its shareholders. To counter the cost of high gas prices, consumers can choose to buy hybrid cars and sell their SUV's, or stop driving cars.

Market forces change behavior in an efficient manner. Over 1 million Americans will stop driving cars next year. This will help the environment by decreasing carbon. Nationalization of oil in Brazil will only change the benefits of owning oil from the many to the few. The few being those in power who will take advantage of the corruption that occurs with no accountability which is required in a public company (Recently there was an news event that pointed out that $ billions were missing from the public oil trust in Iran, where do you think those $ billions went, it sure was not to the people). Instead by taxing oil revenues like the USA does with Exxon will generate the same if not more benefit to the government by increasing revenue for social projects or national defense. There is no country with a social or communist government that has been successful over the long term. Only fools will cling to their flawed thinking while spending their time in Ivory towers, where the light of reality never reaches.
 
In my opinion your thinking is frozen in the past and the real world has changed since then – the companies that you think are doing a great job such as the 7 sisters, today they belong to the second tier of global oil companies – Today the first tier belongs to mostly nationalized oil companies such as Petrobras, the Russian company, the Chinese state oil company, Aramco, and so on….

If you think bigger equals better, then I urge you to compare Brazil and Switzerland economically. What a shame by the way
 
Another thing, I am convinced Saudis and U.A.E. would be totally fucked without western technology. Point to one Arab technology, innovation etc.. Actually do not bother there is none (to save your effort.)
You are ridiculous in your argument as usual.
 
If you analyze each country that has nationalized their oil industry you will find out that most of them had many economic and political problems and it does not apply to the current case involving Brazil and Petrobras since Brazil is emerging as one of the superpowers of the future – and Brazil has been putting its act together.

When was the first time I have heard that?? 30-35 years ago? Brazil-country with potential for the last 50 years.
I guess that's why you are sitting pretty in the U.S.
:D :D :D :D :D

P.S. Actually I forgot you moved to the U.S. because of traffic.:D :D :D :D :D
 
Nationalization of oil in Brazil will only change the benefits of owning oil from the many to the few.
Common, didn't you read his post carefully?? PEOPLE WILL OWN THE OIL.:D :D :D
 
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Oraclewizard77: “Unfortunately, those who support these failed leftist ideas of socialism can't back up their ramblings with real facts. For example, its in Exxon's benefit to have high gas prices. The stock has gone up and rewarded its shareholders.”


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July 13, 2008

SouthAmerica: I can.

For example the United States when we compare it with Brazil.

The current budget of the US government (US$ 3 trillion dollars) is 25 percent of US GDP – and includes billions of US dollars of welfare for American corporations such as without very large government subsidies ethanol from corn would not be a viable line of business.

The reason Exxon stock goes up and they are making so much money is because Exxon and the other US oil companies are not picking up the tab from the Iraq war – a war started to secure new sources of oil for the oil companies. Any fool can make money like that.

The current budget of the Brazilian government (US$ 230 billion dollars) is 13 percent of Brazilian GDP.

In Brazil we have capitalism in the US we have socialism – and regarding social welfare the area that is growing the fastest is welfare to Wall Street other wise their business model would collapse and have a major meltdown.

In the last 10 years American capitalism has become nothing to write home about – unless losing trillions and trillions of US dollars are supposed to be a viable model.


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Oraclewizard77: Market forces change behavior in an efficient manner.


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SouthAmerica: Like Americans changed their behavior in an efficient manner since the oil shock of the 1970’s with long gas lines and so forth.

Americans became real efficient driving around their gas guzzling automobiles since that time. And that kind of market efficiency has brought the United States on its knees today.
What happened a few weeks ago when George W. Bush had to go to Saudi Arabia to beg for an extra drop of oil – and the Saudis had to throw a bone his way just for him to save face and don’t look completely impotent.

In the other hand the Generals in Brazil established government guidelines and developed a state of the art system that turned Brazil 100 percent independent from foreign oil.

Today Brazil is the country least affected by the skyrocketing price of oil, and the Brazilian economy is moving forward powered by ethanol made from sugar cane. Thanks to the foresight of the Brazilian Generals of the 1970’s.

In the 1970’s Brazil was 90 percent dependent on foreign oil.

We will see which model is superior the Brazilian government model or the American government/Exxon model when oil is trading at US$ 200 dollars per barrel.


*****


Oraclewizard77: The few being those in power who will take advantage of the corruption that occurs with no accountability which is required in a public company.


*****


SouthAmerica: Let me see if I have grasped what you are saying.

Accountability that is required in a public company such as Enron, WorldCom (which cause the bankruptcy of another 100 corporations when they collapsed), Global Crossing, Bear Stearns, and US$ 2 trillion dollars that went up in smoke during the dot com fiasco, another $ 2 trillion went up in smoke in the telecommunications industry, just God knows how many trillions of US dollars will be necessary to clean up the latest sub-prime massive meltdown.

Who needs efficiency like that?

Even the Soviet Union meltdown has started looking good compared with the above.

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Cesko: If you think bigger equals better, then I urge you to compare Brazil and Switzerland economically. What a shame by the way


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July 13, 2008

SouthAmerica: Reply to Cesko

To answer your question about Switzerland – there is a wiseguy from Switzerland that hangs around the Brazzil magazine website and every chance he has he takes a shot at Brazil. He uses the screen name Ch.c and here is my answer to a question when he was comparing Brazil with Switzerland.


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Ch.c: “My country, Switzerland, has no oil, but is within the world most developed and wealthiest country.

Hopefully you can catch the difference.

It is not what you have in the grounds that will make one developed...but what one has in his brain.”


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SouthAmerica:

July 1, 2008

Switzerland among wealthiest country and major industry = money laundering

In a nutshell that summarizes Switzerland’s claim to fame.

Basically Switzerland can claim fame in 3 major areas:

1) In the area of technology: In Switzerland the Swiss are able to make watches.

2) In the area of food: Swiss cheese, and Swiss chocolate is one of the best around the world.

3) In the area of International Finance and Banking: Switzerland is a safe haven for laundering money for any mafia, drug dealers, corrupt officials from any country, from crooks, dictators, terrorist groups, and any other type of money from any criminal activities from around the world.

Switzerland is the money haven for all kinds of dirty money and that kind of illegal activity places Switzerland among the most profitable banking centers in the world.

When money laundering is the Bread and Butter of your economy no wonder it is so profitable.


PS: I don't want to forget anything that Switzerland is famous for.
Switzerland is also well known for making Ricolla.

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Crgarcia: Only losers believe in nationalizations. Nationalizations are robbery.

Even if they pay the fair value to stockholders, governments are too ineffective to run ANY companies.


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July 14, 2008

SouthAmerica: Do you mean losers like the American people who will pick up the tab of the last massive mess when the US government starts renationalizing Freddie and Fannie, because of the incompetence of the private sector?

This is the Mother of all meltdowns; and a bailout and renationalization is the only way out to prevent a complete Panic and Meltdown on Wall Street.

If that is your idea of efficiency then what can I say?

I was watching the BBC News on Sunday night and they started the news by announcing that the US government was going to Bailout Fannie Mae and Freddie Mac – the organization responsible for $ 5 trillion dollars of mortgages in the US market.

The BBC said that in essence all the actions that the US government was taking in a Panic mode - that really represented the renationalization of these two companies by the US government.

By the way, on January 24, 2008 I posted the following on this forum:


January 24, 2008

SouthAmerica: These days I wonder if it is a major requirement for all the people who work at the highest levels of the United States government that the person has to be a complete incompetent MORON.

We are at the beginning of what might be a major recession ahead of us here in the United States, and these idiots in Washington don’t have even some basic common sense.

What a bunch of incompetent losers we have today working for the US government.


***


”Agreement Closer for Economy Rescue Pact”
Thursday January 24, 2008 - 2:11 am ET
By Andrew Taylor, Associated Press Writer
The Associated Press

Pact on Emergency Economic Rescue Near As Lawmakers, White House Make Significant Concessions

WASHINGTON (AP) -- House Democratic and Republican leaders appeared close to agreement with the White House Wednesday night on a significantly reworked package of emergency tax cuts to jolt the economy out of its slump.

…Rep. Barney Frank, D-Mass., said negotiators were near an agreement on an overhaul of the Federal Housing Administration that would make it easier for thousands of homeowners with ballooning interest rates to refinance into federally insured loans.

The measure might advance separately of the tax relief package, however.

Both sides reached agreement to allow Fannie Mae and Freddie Mac -- government-sponsored companies that are the two biggest U.S. financers and guarantors of home loans -- to buy loans much larger than the current $417,000 limit, aides and lobbyists said. Frank said that lending cap might reach as high as $700,000 in areas with the highest home prices.


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July 14, 2008

SouthAmerica: You did not have to be a rocket scientist to figure out what was in the pipeline. And it did not take long for this meltdown to materialize and I wonder how much extra toxic waste Wall Street was able to dump on Fannie Mae and on Freddie Mac since the changes were made in January of 2008?



“Fed Offers Fannie, Freddie Access to Direct Loans”
By Craig Torres
Bloomberg News – July 14, 2008

(Bloomberg) -- The Federal Reserve Board of Governors voted unanimously to authorize the New York Fed to lend directly to Fannie Mae and Freddie Mac to meet their liquidity needs ``should such lending prove necessary.''

``Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities,'' the Washington-based central bank said in a statement today.

The move comes in tandem with Treasury Secretary Henry Paulson's announcement that he will ask Congress for authority to buy unlimited stakes in the two mortgage companies and to lend to them if needed. Fannie and Freddie are critical for the housing market because they own or guarantee almost half the $12 trillion in outstanding U.S. mortgages.

Freddie Mac, based in McLean, Virginia, is scheduled to sell $3 billion in short-term notes tomorrow. Freddie Mac tumbled 47 percent in New York Stock Exchange composite trading last week, and Washington-based Fannie Mae lost 45 percent of its value.

The central bank said the authorization is intended to supplement the Treasury's existing authority and to promote the ``availability of home mortgage credit during a period of stress in financial markets.'' The Treasury is currently authorized to loan $2.25 billion to each company.

The Fed governors voted Sunday to invoke a section of the Federal Reserve Act that differs from the authority they used in March to open the Primary Dealer Credit Facility, a loan window for investment banks.

Under section 13.13 of the Federal Reserve Act, the rule used to open the discount window to Fannie Mae and Freddie Mac, the governors don't have to find ``unusual and exigent circumstances'' to make the loan. The borrower is also limited to higher-quality collateral of Treasury and agency securities.

Source: http://www.bloomberg.com/apps/news?pid=20601068&sid=aRsz.62RNFvo&refer=home


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PS: They also said on the BBC News about an hour ago that at least 100 American banks are going to file for bankruptcy in the next 12 months.

All aboard of the Titanic please put on your lifesaver jackets right now.

And God bless you.

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Crgarcia: Only losers believe in nationalizations. Nationalizations are robbery.

Even if they pay the fair value to stockholders, governments are too ineffective to run ANY companies.


******


July 14, 2008

SouthAmerica: Here is US$ 1 trillion dollars of US business efficiency for you.

…Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments — a number projected to ultimately reach $1 trillion.

Why Wall Street don’t put to the test later today and see if Ben Bernanke will let Lehman Brothers Holdings Inc. to go through a complete financial meltdown?

The time to test the theory is right now since the Fed’s wallet is wide open and they are all operation on a Bailout and nationalization mode.


******


“Government not expected to help more companies”
By JOE BEL BRUNO and STEPHEN BERNARD, AP Business Writers
Associated Press – July 14, 2008

NEW YORK - The U.S. government is signaling it won't throw a lifeline to struggling financial companies — except for mortgage linchpins Fannie Mae and Freddie Mac — marking a shift to a new and potentially more volatile phase of the credit crisis.

Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses — unlike Bear Stearns Cos., whose buyout the government helped orchestrate in March. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies' earnings expected to be down a stunning 69 percent from a year ago when all the numbers are in. And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.

The short-term uncertainty about Freddie Mac and Fannie Mae — which together hold or guarantee half the nation's mortgage debt — was to an extent relieved on Sunday. Federal officials again threw their support behind the government-sponsored enterprises; the Treasury pledged to expand its current line of credit to the two companies and Treasury Secretary Henry Paulson also said the government could, if needed, buy equity capital in the companies, whose stocks lost half their value last week. The Treasury's moves would require congressional approval.

Meanwhile, the Federal Reserve said it will provide additional loans if needed. But some of Wall Street's biggest investors believe there was another message in the government's announcement — the rest of the financial sector seems unlikely to get a helping hand. Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments — a number projected to ultimately reach $1 trillion.

"The credit crisis has obviously entered into a new phase — the government has one bailout left in them, and this is it," said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.

"One consequence of Freddie and Fannie is that other firms are allowed to go under," he said. "If you couldn't get your act together after four months of unprecedented financing terms, maybe you don't deserve to be thrown yet another lifeline."

Worries about financial companies failing intensified after a run on IndyMac Bancorp Inc. led to the bank's takeover by the government on Friday. It wasn't the Treasury or Fed helping to keep IndyMac in business, but a transfer of control to the Federal Deposit Insurance Corp. — which backs deposits on all the nation's banks.

Analysts said these kind of failures will curtail competition among financial institutions, which might in turn make it even harder for some borrowers to get mortgages, personal or auto loans or credit cards.

On Wall Street, Monday could be a critical day, with investors quite nervous amid the uncertainty in the financial sector. Friday, as investors tried to assess the health of the mortgage financiers, the Dow Jones industrial average dropped below 11,000 for the first time in nearly two years, and the overall market was left with its fourth straight weekly loss. The government's support of Fannie and Freddie in part was meant to assuage investors around the world.

Wall Street will get a better sense of how concerned investors are with Fannie Mae and Freddie Mac's future immediately Monday morning. Freddie Mac is scheduled to hold its weekly debt auction beginning at 8 a.m. EDT. The auction closes at 9:45 a.m., shortly after U.S. markets open.

Successful completion of the debt auctions allows both lenders to remain liquid — replacing old debt with new. Liquidity has been one of the key questions facing financial companies during the credit crisis.

Freddie Mac is auctioning off a combined $3 billion in three- and six-month securities. Wall Street will be looking very closely at the number of bidders and the rate at which the securities are auctioned, said Bert Ely, a banking consultant who has been critical of the companies in the past.

"I'll be surprised if the results aren't strong," he said, noting the government was likely heavily encouraging investors throughout the weekend.

The banking industry was already dealt a severe blow in March when Bear Stearns nearly collapsed amid the evaporation of its liquidity. JPMorgan Chase & Co. stepped in to purchase Bear Stearns in a deal orchestrated by the Federal Reserve.

Bear Stearns was unhinged by mounting losses tied to investments in bonds backed by mortgages. As the mortgages increasingly defaulted, the value of bonds backed by the troubled loans tumbled. After Bear collapsed, investment banks were given the opportunity to borrow directly from the Fed, an option that was previously only granted to retail banks.

Financial companies' reports of write-downs of troubled debt are likely to increase this week as some of the country's largest institutions, including JPMorgan Chase, Merrill Lynch & Co. and Citigroup Inc., report second-quarter results. That trio has already taken a combined $73 billion in write-downs since the credit crisis began last summer.

Lehman Brothers, whose shares have lost 78 percent since this year's peak in February, is considered to be on the shakiest ground because it is the smallest Wall Street bank and has significant mortgage holdings. Last month, the investment bank announced it lost nearly $3 billion during the second quarter and was forced to offset that by raising $6 billion of fresh capital.

Meanwhile, analysts believe regional banks in areas hardest hit by the real estate downturn are also at risk for failure. Some of the most bandied about names include Washington Mutual Inc., National City Corp., and Fifth Third Bancorp.

"Fannie and Freddie are too big to fail only because of the repercussions, not to just the mortgage and housing markets but the entire financial market," said Joe Balestrino, fixed-income market strategist at Federated Investors. "The U.S. is in disarray ... these regionals could be gone, they are in a tough spot with housing and employment going south."

Source: http://news.yahoo.com/s/ap/20080714/ap_on_bi_ge/credit_crisis_new_phase

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Excellent Commentary As Usual
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It is ever so important to look at things the way they are, such that one can improve.

To remain objective is very difficult, and to remain objective in a proper way, requires one to be very well educated and aware of the subjects in question. And this cannot be just booksmart, this has to come from feet on the ground streetsmart as well.

Also the way one can look for solutions, is to observe the best examples of those that are doing well, and thus try to emulate what they are doing.

Also, it is imperative not to just look at the past for answers, but to know enough about what can take place, and use common sense and proper knowledge to implement innovation.

Making mistakes and/or progress is always a given.

True wisdom is the ultimate position for one to attain, most of which will never even know how to approach properly.

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Your synopsys of Switzerland is spot on, which has always served as an example of a steadfast stable economy. But look at the true underpinnings, and know the truth.

The US has been able at times to make tremendous progress versus its peers. It is important to know exactly why this was, and to continue what works, and to discontinue what does not work.

Russia, China, India all countries, all peers walk down the road of possibility, making big progress and big mistakes.

A child grows up making many mistakes, matures, and then dies.
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Would it not be ideal at this moment to discuss what examples of countries that there are at this moment who seem to be producing the best results for its population on an overall basis, and then for those who have not kept pace, to then simply form objectives , and then to move forward.

It certainly would seem that any population would want to try to better themselves, and simply need to form proper objectives, and thus work towards them.
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I really like the objectives that you have laid out for Brazil, and I do think that this is the way to go for Brazil or any country for that matter.

Each country has to calmly review where it is, and what objectives must be formed and obtained.
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I believe that it is time for societies in general to simply come together, form objectives, and work towards them.

I do not believe that the American Capitalism Model should be used, and I do not believe that the Cuban Socialist model should be used.

The model that should be used is not a divisive model such as Democrats versus Republicans. The model that should be used does not have politics at all. It is a society that rewards innovation and hard work, forms objectives and meets them, in a harmonious way.

In my view it is the political system that has created many problems for many countries and has to be changed.

Proper banking and Electronic Stock Markets are of paramount importance in the new structure.

I believe that it is not quite here yet, but there are objectives that government itself must meet, and there are objectives that private enterprise must meet. The idea of two people garnering advertising budgets and influencing tax posture is fast proving itself to be part of the problem and not the solution.
 
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