Brazil is the star of the (investment) market

A lot is happening in Brazil this year of elections, speaking about who will become President of this country, not speaking about Schumacher against Ayrton Senna (an enquete on Schumacher´s site in terms of popularity of the two, which was "invaded" by Brazilians after the news came out here, Orkut style).
This year´s elections probably won´t have such an impact on worldwide financial markets as in 2002 when Lula was running for president and the world´s financial markets held their breath about the economic and financial impact, Lula can prove a track record now.
Brazil's currency rose to a five- year high and bonds jumped, pushing benchmark yields to a record low, after the government began to buy back debt it sold to international investors. The buyback is helping strengthen the currency because it lowers the country's external debt, reducing the government's need to buy U.S. dollars in years ahead, said Gray Newman, chief Latin America economist at Morgan Stanley. Brazil has also begun to turbo-charge its debt management efforts by buying back up to $20bn of short term foreign currency debt and Brady bonds. And it paid back FMI loans before the deadline. Only that a stronger local currency implies a threat for the competitiveness of the export sector Brazil depends upon so much. But if foreign investors invest into public bonds the infrastructure will benefit from that and so does the export segment. The government estimates that thanks to the tax incentive a possible foreign investment of about R$ 75 billion could be attracted in 4 years for projects in energy, transports, logistics and telecommunications.
The government is discussing to cut taxes for overseas investors,the 15% withholding tax foreign investors have to pay when investing into the country's domestic government bonds. Currently foreign investments account for aproximately R$ 5 bilhões (0,5%) of those bonds.
And those foreign investments may be exempt from CPMF tax, incl. for IPOs.
And even more important (reading that out loud to my bsuiness partners Fabian and John): tax incentives to be expected for venture capital funds which invest into IT companies ;-)
We, if acting as exporters, may be even having finally in Brazil a bank account in USD which up to date was imposible.
All measures taken together, the buybacks and tax cuts will help improve Brazil's credit rating and will attract foreign investors.

But Lula, Palocci: sorry to say that, if the spread (around 8,1%) and the Selic (Leitzins) maintain as high as their are, I need foreign investors, cause I will never be able to pay the local interest rates my Braz. bank charges me. Never ever will I accept those astronomical interest rates for bank loans if foreign investors will charge me less for a ROI. That trade-off I calculate well and you loose. Brazilian banks waste their money on governamental loans which makes money so scarce and oblige me to pay interest rates per month what a German bank charges me per year? Forget it. Public defecit spending accounting for as much as 8,13% of the GDP, that is absurde!!!
Dear Brazil, you better cut deficit spending, the private sector needs the money more than you do do push economy (prayers of an entrepreneur in Brazil who recognises its potential and believes that "Brasil vai ser um país do futuro E DO PRESENTE!").