Banco Santander (SAN) decides to replicate Brazilian fintech Superdigital in other countries

Bank Santander has announced that it will replicate in other countries the model of Superdigital - Brazilian fintech (financial technology) that offers services such as transfers, payments and prepaid card. Superdigital aims to reach 5 million customers in Latin America by 2023. The goal is to bring the business model that fintech adopts in Brazil to Mexico, Peru, Colombia, Argentina, Chile, and Uruguay. Created in 2012, Superdigital received investments from Santander in 2014. Then, in 2016, fintech was fully controlled by the bank. Not long ago, Superdigital arrived in Chile.

This growth shows that the Brazilian banking sector has decided to expand digital banking. There are already some European fintechs coming to the Brazilian financial market and some midsize banks are transforming with new technologies. Analysts, however, say there will be no room for all companies. Therefore, the sector in Brazil should soon face a phase of consolidation.

With Superdigital Santander wants to operate in the cloud and fully online. This decision indicates an important behavior change in the financial market. By the end of 2019, Santander wants to launch the Pi Platform that will allow it to buy and sell ETF shares and real estate funds via the internet.

Brazilian financial market raises GDP projection to 2019 for the first time in 20 weeks

The Focus report, published by the Brazilian Central Bank every Monday, indicates that projections by Brazilian financial market analysts estimate GDP growth to be 0.81% to 0.82% by 2019. The same analysts consulted by the Brazilian Central Bank continue betting on the growth of 2.10% of the Brazilian GDP in 2020.

The change is related to the approval of the first shift of the Pension Reform by the Chamber of Deputies of Brazil. Even so, the performance of the Brazilian economy is still very poor. Many analysts expect the government to present some kind of measure that could warm the Brazilian economy a bit more.

Economists lowered the estimate for the Brazilian official inflation index (IPCA), which was down to 3.78%. A week ago it was at 3.82%. This year's central target is 4.25%, with a tolerance of 1.5 percentage points to more or less.

Many analysts believe that the Central Bank should, at the next Monetary Policy Committee meeting (Copom), which takes place in the last two days of July 2019, should lower the Selic rate of the Brazilian economy that is now at 6, 5% per annum.

Hashtag #OrgulhoDoNordeste grows on Twitter after an unfortunate statement from Brazilian President Jair Bolsonaro

After a microphone capture a biased speech of President Jair Bolsonaro against the population of the Brazilian Northeast, Twitter was taken by innumerable criticisms to the figure of Jair Bolsonaro. Last Friday (19.Jul.2019), Bolsonaro used a pejorative term to refer to the governors of the region during an informal conversation with Minister Onyx Lorenzoni.

Several Brazilian artists, politicians, and journalists have spoken publicly against the president's speech. Many of them recorded videos or wrote on Twitter strongly criticizing the conduct of Jair Bolsonaro.

In commenting on the fact, Bolsonaro stated that he was not referring to the people of the Northeast in general. He said that the pejorative term was addressed to the governors of Maranhão, Flávio Dino, and Paraíba, João Azevêdo, two politicians of the Brazilian left.

Bolsonaro, therefore, did not apologize for the use of a pejorative word.

Tokio Marine, JP Morgan, Goldman Sachs, and Citibank believe that the Pension Reform will bring improvements to the Brazilian economic scenario

According to the newspaper O Estado de São Paulo, financial institutions believe that, after the approval of the Pension Reform, Brazil should start a cycle of economic growth, with new cuts in interest rates.

This, for example, is the thinking of the president of the Japanese insurer Tokio Marine in Brazil, José Adalberto Ferrara. He told the state that the reform, passed in the first round of the Chamber of Deputies, could mark a new cycle of economic growth in Brazil on a sustainable basis.

According to the newspaper O Estado de São Paulo, financial institutions believe that, after the approval of the Pension Reform, Brazil should start a cycle of economic growth, with new cuts in interest rates.

This, for example, is the thinking of the president of the Japanese insurer Tokio Marine in Brazil, José Adalberto Ferrara. He told the state that the reform, passed in the first round of the Chamber of Deputies, could mark a new cycle of economic growth in Brazil on a sustainable basis.

The newspaper also indicates that Goldman Sachs believes that the Reforma could generate a saving of R $ 900 billion in Brazilian public accounts. JP Morgan is betting that the Brazilian Central Bank should cut basic interest rates (Selic), currently at 6.5%, at 0.5% in the next two Copom meetings. This would bring the Brazilian economy's basic interest rate to 5.5% in September. Citibank believes that there will be a reduction of 0.25 percentage points in Selic this month.

However, in the real world, Brazil's investment rate is the lowest in more than 50 years. A survey conducted by economist Manoel Pires, coordinator of the Fiscal Policy Observatory of the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV), shows that the public investment rate fell from 4.06% in 2013 to 1.85% in 2017 (the lowest level ever recorded in the country), to 2.43% in 2018. The rate of private investment has fallen in the last 5 years, falling from 16.85% in 2013 to 13.39% in 2018.

Unemployment insurance in Brazil is one of the smallest in the developed world

According to a study of Applied Economic Research (Ipea), the Brazilian unemployment insurance program is one of the smallest in the world developed in aspects such as values, rules of operation and comprehensiveness. The research carried out by Ipea analyzed the systems of 97 countries where there is some kind of benefit. In addition to being among the lowest in the group, the effective coverage rate has been falling in recent years, due to the growth of unemployment. Between 2015 and 2018, the percentage of Brazilian unemployed who received the benefit fell from 7.8% to 4.8%.

The economist Newton Marques says unemployment is one of the worst problems in the Brazilian economy today. He believes that only if "the government makes an economic policy that can resume the economic activity of the country as a whole" this situation will tend to be minimized. However, so far, there is no government measure directly geared towards job creation.

Brazil breaks the historical record of small business defaults

According to a survey conducted by Serasa Experian, the number of micro and small enterprises (MPEs) defaulting in Brazil reached a new record in May 2019, surpassing 5.4 million. This record is a direct result of the current stagnation of the Brazilian economy.

This is the highest level of the historical series, which began in March 2016. Services (10.5%), industry (2.4%) and trade (2.2%) were the sectors with the highest increase in the annual comparison.

In this scenario of paralysis of the Brazilian economy, the country's main banks continue to charge one of the largest spreads on the planet and cut credit lines.

Although current Economy Minister Paulo Guedes said that economic growth should "begin to be positive in the second quarter" of 2019, many analysts indicate that the Social Security Reform is not intended to provide economic growth but to reduce the hole left by Pension plan in public accounts year after year. 

Contrary to the government's assertion, the Pension Reform may have a recessive effect on the Brazilian economy if there is no significant increase in investments in the country in the second half of 2019.

Although he proclaims himself liberal, Paulo Guedes, the economy minister of the Brazilian government, studies liberating up to 35% of the FGTS to stimulate the economy

The idea is to give money to the population for it to warm the economy. This proposal of heterodox shock, in the best Keynesian model, is of the ultra-liberal Paulo Guedes.

In addition to the release of the FGTS funds (the FGTS is a savings intended for the Brazilian worker. The fund aims to ensure the worker in difficult situations, such as dismissal without just cause), there will also be another round of PIS / Pasep withdrawals. The objective of the plan is to try to revive the economy, via consumption, still in 2019 - the government projection is GDP growth of 0.81%. The Ministry of the Economy wants to allow workers to get up to 35% of the resources of their active accounts of the Working Time Guarantee Fund. The measure is expected to inject up to R$ 42 billion in the economy.

Guedes, faced with increasingly blatant evidence that the current stagnation of the Brazilian economy occurs due to a chronic lack of demand, decides to adopt an openly Keynesian policy.

But even the economists who are progressive and close to the Brazilian left-wing believe that the measure is insufficient to remove the country from the crisis. According to economist Laura Carvalho, "such effects will be temporary and insufficient to counteract the negative impact of cutting public investments and the global slowdown on our economy."

However, economist Laura Carvalho also points to the difference between Guedes' speeches during the political campaign and his actual role as minister.

Carvalho points out that the ultra-liberal Guedes, during the presidential campaign held in 2018 in Brazil, made a "discourse filled with cliché ultra-liberal solutions, among them the radical flexibilization of labor laws, tax cuts for entrepreneurs, privatization of all public assets and indiscriminate commercial opening as a way to guarantee economic growth and job creation. " Now, faced with the reality of the Brazilian economy, Guedes decides to adopt "a measure whose rationality is supported by the Keynesian multiplier of autonomous spending."

The same happened with the government of the also liberal Maurício Macri, in Argentina. In power, he adopted unorthodox measures in the economic area.

Brazilian GDP should decrease in the second quarter, says IFI (Independent Fiscal Institution)

The IFI (Independent Fiscal Institution), an organization linked to the Brazilian Federal Senate, published a report in which it suggests a new GDP decrease (Gross Domestic Product) in 2019. In the first 3 months of the year, there was a reduction of 0.2%.

If the report published on June 15, 2019, Brazil would be returning to live in a recession, when there have been two consecutive quarters of decline in GDP in relation to the previous quarter.

According to the report, Brazilian industrial production "remains constrained by uncertainties and weak external demand, while confidence indicators indicate consumer and business pessimism, especially with future economic conditions."

For Affonso Celso Pastore, president of the Public Policy Debate Center and the AC Pastore consultancy, Brazil today has "a per capita income that is 9% below the threshold it was at the beginning of the recessive cycle (2014), and that is, we can not expect family consumption to be a driving force in the economy. The country has a very large idle capacity in the industry, and the maturing of infrastructure investments is long (it takes time), so we do not we have the investment being a driving force. We also do not have an impulse from exports. And finally, it is not possible to use fiscal stimuli because the government is doing the opposite, it is making an adjustment, is cutting spending".

To make matters worse, according to economist Rosa Chieza, from the Federal University of Rio Grande do Sul, Brazil today has a "tax burden of 32%, a taxpayer that receives up to R $ 2,000 earmarking almost 50% of its income While we have a huge gap in taxation on income and equity, we need to put more slots in the income tax table, increase the exemption rate, but raise the tax rate, as it spends all its income on consumption of goods and services. a maximum rate of 27.5% to 40%, in order to reduce inequality, while also we charge more from profits and dividends."

Right-wing political struggle in Brazil: radio policy programming breeds Twitter clash with hashtag #BandLixo and criticism of political commentators Reinaldo Azevedo and Marco Antônio Villa

The right-wing in Brazil is in conflict. Groups linked to President Jair Bolsonaro began to criticize right-wing political commentators who, in turn, criticized the current government.

Political commentator Reinaldo Azevedo, who was a fervent critic of the center-left government of the Workers' Party (PT), criticized very strongly the disorganization of the government of Jair Bolsonaro, especially as regards the lack of ability of political negotiation of the current president.

Azevedo, who calls himself a liberal critic of the current administration, began acting along with the Intercept Brasil website in the publication of reports about the performance of the current Minister of Justice, Sergio Moro when he was the judge responsible for the trial of former president Luiz Inácio Lula da Silva.

According to Azevedo, "if there is a law, Lula's conviction is null," because, after the leaks made by The Intercept Brazil had shown, Moro would not have respected "due process of law."

These criticisms of Azevedo led Bolsonaro's most loyal voters to treat the commentator as an adversary.

The same happened with the political commentator Marco Antônio Villa, who worked on the Jovem Pan radio. Jovem Pan commentators criticized the Workers Party government very much. Villa was one of the most emphatic critics.

With the arrival of Bolsonaro to power, Villa, who is a historian and university professor, started to criticize the government a lot, especially in relation to the confusion that took care of the Ministry of Education.

The radio finally fired Villa. Many have seen the dismissal as a pursuit of the radio to the government critic since the radio editorially can be placed on the right-wing of Brazilian media.

Now, another important Brazilian radio, Bandeirantes, the same one in which Azevedo works, decides to hire Villa. This prompted Bolsonaro's supporters to launch the hashtag #BandLixo (something like "Band Garbage" in English).

Both Villa and Azevedo are part of the commentators of the Brazilian political right. 

Now, another important Brazilian radio, Bandeirantes, the same one in which Azevedo works, decides to hire Villa. This prompted Bolsonaro's supporters to launch the hashtag #BandLixo.

Both Villa and Azevedo are part of the commentators of the Brazilian political right. Government supporters have used the hashtag #BandLixo to disagree with Villa's comments made on his first day as a political commentator on the radio's morning news program. They also criticize Fabio Pannunzio, a journalist for the radio station, who called the pro-Bolsonaro Brazilian right-wing supporters "Nazis".

Ibovespa (B3) closed the day at 103,802 points and fell 0,1%

Following the falls on Thursday and Friday of last week, the Brazilian financial market closed again in decline. The prospect of approval of the Pension Reform in the second half of 2019 only helped to slow the São Paulo Stock Exchange.

According to the G1 website, Ibovespa, B3, "closed down this Monday (15.Jul.2019), with an eye on the local scenario after approval of the main text of the pension reform in the first round in the House and with the definition that the second round will take place only in August."

According to the Focus Bulletin, released today, the Brazilian economy is expected to grow by only 0.81% in 2019. Economists interviewed by the Brazilian Central Bank for the Focus Bulletin have reduced for the twentieth time the Brazilian GDP growth forecast in 2019.

The financial market in Brazil warms up after first approval of Social Security Reform

For many analysts, medium and long-term capital must begin to reach the Brazilian economy should the approval of the Pension Reform continue and be approved by the National Congress.

If approval occurs, for analysts, Brazil should grow again in 2020. According to the head of the Economic Policy Secretariat (SPE) of the Ministry of Economy, Adolfo Sachsida, if the reforms are approved, the government will propose a productivity agenda. Sachsida believes that this could make the economy grow again at a faster pace, from 3% to 4% a year, in the long run.

Despite the government's goodwill, very weak data from industry, commerce, and services in Brazil, the main engines of economic growth in the country, point to a fall in Gross Domestic Product in the second quarter of 2019. This means that Brazil can return to a recessionary scenario later this year.

According to Valor Econômico newspaper, real economic data indicate that Brazil "has not been able to recover from the recession, it has 13.3 million unemployed, of whom one in four has been seeking jobs for more than two years. % of installed capacity is idle, 210 thousand commercial companies closed their doors in four years and 6 thousand companies demanded judicial reorganization. The negative effects of the 2014-2016 depression on the Brazilian economy were stronger and went on much longer than expected".