Brazilian financial market fears possible delay in voting on Pension Reform

The Brazilian financial market remains apprehensive to know if it will happen today, 27.Jun.2019, the reading of the Pension Reform report. The delay for the national political framework to discuss, vote and possibly approve the Pension Reform leaves investors in Brazil very apprehensive. Everyone already believes that the year 2019 is lost.

As the inflation framework in Brazil is not worrisome, due to the weakness of the Brazilian economy, everything indicates that in the second half the Brazilian Central Bank will cut the basic interest rates, which are currently at 6.5% per year.

The fear of some federal deputies losing the vote of the Pension Reform, since many are celebrating the feasts of São João in their respective states, can delay the entry of the Brazilian states into the new Social Security. This impasse is delaying the reading of the complementary vote of the rapporteur and federal deputy, Samuel Moreira. 

According to UOL website, "the inclusion of states and municipalities in Pension Reform is necessary because they are also breaking down. The deficit in the states reaches R$ 100 billion today and can quadruple until 2060. However, this inclusion has not yet been made basically because governors and federal deputies are afraid to displease state officials and lose votes."

The number of companies decreases for the second consecutive year in Brazil

According to the Central Business Register (CEMPRE), released today, June 20, 1919, by IBGE, the total number of companies in activity in Brazil was 5 million in 2017, the worst result since 2010, when it totaled 5.1 million. Since the beginning of the economic crisis in 2014, the number of companies declined by 74.2 thousand and the salaried population decreased by 3.2 million.

According to the IBGE News Agency, "the study shows that between 2007 and 2013, there was a continuous growth in the number of companies [in Brazil], from 4.4 million to 5.4 million. In 2014, however, this number fell by 288, 9 thousand organizations and, despite the small increase of 11.6 thousand in 2015, in the following two years the number dropped again to 64.4 thousand in 2016 and 21.5 thousand in 2017."

According to economist Laura Carvalho, the "brutal fall in growth projections" in Brazil combined with the possibility of "a new recession in the first quarter of 2019 brought to the surface the vicious circle caused by insufficient demand in the Brazilian economy."

In the first quarter of 2019, Brazil GDP fell by 0.2%. Two consecutive quarters of contraction mean a technical recession. For many economists, 2019 is already a lost year for Brazil. They believe that a possible economic recovery will only come in 2020.

Brazilian military arrested for transporting 39 kilograms of cocaine in a Brazilian Air Force (FAB) plane that was part of the entourage of President Jair Bolsonaro

According to the website El País, yesterday, June 25, 2019, at the Seville airport, the Spanish Civil Guard detained a Brazilian military man of 38 years who had carried 39 kilos of cocaine in an airplane of the FAB integrated to the entourage of the president Jair Bolsonaro.

The arrest took place during a stopover on the presidential reserve plane in Seville, southern Spain, to Osaka, where Bolsonaro will attend the G-20 meeting.

According to the O Globo, the detained military is 2nd Sergeant of the Brazilian Air Force and acts as flight commissar, providing onboard service on FAB planes.

#LulaLivreUrgente and #LulaNaCadeia are on the trending topic of Twitter as the STF decides to keep former president Lula in prison

By 3 votes to 2 against, the Federal Supreme Court (STF) has decided today to deny the proposal of Minister Gilmar Mendes to grant former president Luiz Inacio Lula da Silva provisional release.

According to the Folha de S.Paulo newspaper, Lula's defense highlighted the revelation of messages from the current Minister of Justice, Sergio Moro (who ruled Lula) and Lava Jato authorities (who investigated Lula) released by The Intercept Brasil since the last day 9.

Intercept reports, according to several politicians allied with Lula, indicate that Moro "had a personal animosity against the accused, provided evidence to the prosecution outside the case, previously combined petitions and decisions."

Layoffs outnumber hirings in Brazil

According to consultant Robert Half, in the first quarter of 2019, hirings were rescheduled in just three professions: programmers, quality inspectors, and database administrators grew their "cadres" in Brazil between January and March. Engineers had the most negative balance, with the closing of 1,003 jobs. Following are sales manager (567 closed positions), lawyer (486 vacancies closed) and financial manager (484 vacancies closed).

According to the Folha de S.Paulo newspaper, "the rate of unemployment of skilled labor — which has higher education — stood at 6.1% in the first quarter of this year, the highest since the beginning of 2017."

Thus, once again the careers in technology are armored in the face of the crisis. Hence the undeniable importance of government to understand the demands of the market and be ready to train workers and respond to changes in the labor market. However, nowadays, while the Brazilian labor market continues to look for coherent profiles with the technological revolution in progress, the country is still at odds over the teaching of technology in schools and universities. So far the government of Jair Bolsonaro has not presented any plans to meet these needs in the area of education.

In recent days, Education Minister of Brazil Abraham Weintraub has stated in an event that "there is no condition to maintain the current structure of public education."

Financial market points to Brazil's GDP at 0.87% in further reduction of growth estimate of the economy; reserve period for the purchase of Petrobras shares (PETR3; PETR4) ends today

For the 17th consecutive reduction, the Focus Bulletin, made by the Central Bank of Brazil indicated that the country's economy should grow less. The Focus Report is based on financial market estimates. According to the Focus Bulletin released today, June 24, 2011, the expectations of financial institutions for Brazil's Gross Domestic Product (GDP) in 2019 went from 0.93% to 0.87%.

Inflation expectations decline to 3.82% and the market begins to predict interest cuts. The figures presented today are the result of research conducted by the Central Bank of Brazil last week. The Selic, the basic interest rate in Brazil, is projected to 5.75% by the Focus bulletin. Currently, it is 6.5%.

Today, the reserve of shares on offer from Petrobras also ends. The state-owned company is on the street with an offer of shares that could reach R$ 7.672 billion. The state bank Caixa Econômica decided to dispose of all its common shares of the oil company. Of the total, up to 24% will be primarily negotiated with individuals.

Jair Bolsonaro accuses the Brazilian National Congress of emptying the Executive and supporters of the president launch the hashtag #ReajaBolsonaro

Over the weekend, President Jair Bolsonaro criticized the bill approved by Congress in May 2019. According to him, the text removes the government's powers over the appointment in regulatory agencies. "Do you want to leave me as Queen of England?" Asked Bolsonaro, referring to the monarch who is head of state of the United Kingdom, but does not exercise administrative functions. Parliamentarians denied that the Executive was void. Supporters of the president have launched the hashtag #ReajaBolsonaro (which can be translated by "come on, Bolsonaro, fight back).

According to a bill approved by Congress, the president will now appoint leaders from a triple list chosen by a commission. Text awaits the President's sanction.

The president of the Chamber of Deputies, Rodrigo Maia, responded by saying that Bolsonaro did not understand the bill.

Opposition senator Randolfe Rodrigues wrote that "the president should either change legal advice or read the approved bill before firing his machine gun at improprieties: he understood nothing! He will continue to appoint the directors of the regulatory agencies."

Therefore, the Bolsonaro administration continues to accumulate defeats in Congress, even after an attempt at rapprochement with politicians. The present government presents enormous difficulty in carrying out any type of political negotiation.

#TontosDoMBL: According to The Intercept Brasil and Folha de S. Paulo, Moro says that "fools of the MBL" made a demonstration to defend him

The publication by The Intercept Brasil website and the newspaper Folha de S.Paulo of conversations between the then judge and current Justice Minister Sergio Moro and Lava Jato's prosecutors reveal that there was an articulation to protect Moro and prevent tensions between him and STF ministers (Supreme Federal Court Brazil) could pause investigations of the task force.

In the conversations released by The Intercept Brasil, Moro speaks of a protest organized by "some fools of that Free Brazil Movement," in which protesters criticized STF minister Teori Zavascki (killed in a plane crash in 2017).

Because of this, between yesterday and today (23.Jun.2019), the hashtag #TontosDoMBL has become the most talked about topic on Twitter.

Groups like MBL, Vem pra Rua and Revoltados Online form a kind of Brazilian Tea Party and are deeply linked to the movements of the political right in the country. Until yesterday, these groups had Sergio Moro as a kind of hero.

Luciano Hang, a Brazilian businessman who owns the Havan chain of shops and a well-known Bolsonaro government supporter, celebrates recent layoffs of journalists on the SBT television channel

Luciano Hang, the owner of Havan, used social networks to congratulate the recent layoffs of journalists on the SBT television channel in Brazil. He also said the broadcaster should dispense with Rachel Sheherazade, a conservative commentator, and journalist on the channel's main newspaper. Today, 22.Jun.2019, Sheherazade said she will sue the businessman.

Hang is one of the top advertisers on the SBT channel. After Sheherazade's public response, Hang said she should "work on Cuban state TV Cubavisión, a great place for those who think like you."

Paradoxically, the business of Bolsonaro's supporter and harsh critic of the Brazilian left grew greatly during the years when Brazil was governed by left-center governments, that is, the Workers' Party.

According to Folha de S.Paulo newspaper, Hang was warned by the Labor Court of Brazil, which threatened him with a fine of R$ 500,000 if he pressured his employees to vote in Bolsonaro in 2018. This happened after Hang recorded a video in which he warned employees that he could stop creating jobs if his candidate (Bolsonaro) did not win the election.

According to Folha de S. Paulo, the problems of the businessman with the Brazilian court "are not new. Hang was the target of at least two criminal convictions for evasion of foreign exchange and tax evasion."

Toyota announces the dismissal of 840 employees at factories in Brazil

After a reduction in exports, Toyota's plants in Sorocaba and Porto Feliz, in the interior of the state of São Paulo, in Brazil, will have 840 layoffs. Most of this group is made up of employees hired for a set time for the opening of a third shift, which will cease to exist. The company said it will work with two shifts in the units as of August 5, 2019. According to the metalworkers' union, further layoffs may occur, as the company is stocked with 32 days of sales.

The factories where the layoffs are occurring are responsible for the production of the Yaris and Etios models. So far, three hundred and forty officials have already been dismissed and another 500 will not have their contracts renewed.

According to the magazine Quatro Rodas, a Brazilian automotive publication, Toyota defended itself by stating that the layoffs are the result of "a sharp drop in sales to Argentina. The neighboring country accounts for 93% of the demand for vehicles manufactured for export. turn account for 30% of production in Sorocaba."

Brazil's Agriculture Minister Tereza Cristina declares support for the election of Chinese candidate for FAO direction

Brazil's Agriculture Minister Tereza Cristina, is in Rome, Italy, for the 41st Conference of the United Nations Food and Agriculture Organization (FAO), to be held tomorrow, June 22, The entity will choose its new director-general on Sunday, June 23. 19.20. Tereza Cristina declared Brazil's support for the election of China's Deputy Minister of Agriculture, Qu Dongyue, to the post of Director-General of FAO.

For the minister, this may increase cooperation between the two countries. Tereza Cristina work to open the Asian market for Brazilian beef exports.