After meeting, Petrobras (PETR3, PETR4) approves payment of 50% of extraordinary dividends

Petrobras' board of directors approved the payment of 50% of extraordinary dividends for 2023. The total dividends will correspond to 43.9 billion reais (approximately 8.5 billion dollars).

Last weeks, this issue has generated a crisis in the Lula government. The president of the state-owned company Jean Paul Prates, who is from PT, President Lula's party (center left), and the Minister of Energy, Alexandre Silveira, who is from the PSD of Minas Gerais, a right-wing party. According to Folha de S. Paulo, Petrobras also signaled additional distribution until the end of the year.

Petrobras (PETR3, PETR4) and Enarsa sign memorandum for partnership studies in the natural gas segment

Brazilian Petrobras and Argentine Enarsa signed a Memorandum of Understanding (MoU) on studies in the natural gas area.

According to Petrobras, the non-binding agreement has a term of three years. During this period, the two companies will exchange information and evaluate alternatives for energy cooperation and complementarity.

However, it still needs to be determined whether the plan will involve the export of gas in liquid format or whether the objectives of the two companies will be to put construction projects for new gas pipelines into practice.

The Brazilian newspaper O GLOBO revealed that the Lula government intends to import natural gas from the Vaca Muerta reserve, in Argentina. Perhaps, this MoU seeks to forward an understanding, including the technical aspects of this operation, between the two companies capable of guaranteeing the supply of Brazilian industries.

Agreement between Petrobras (PETR3, PETR4) and Brazilian government could end billion-dollar disputes

According to the newspaper Folha de S.Paulo, an agreement between the Brazilian government and Petrobras regarding legal disputes could cost between 12 and 15 billion reais, far from the initial forecast of 20 billion reais (around 4 billion dollars).

Petrobras must choose to pay this debt in installments with the Brazilian government through an agreement made with PGFN that aims to resolve subsidies that the oil company has with the Brazilian government. This should prevent the possibility of the company being left without a certificate of regularity, even if for just 24 hours, or that, in turn, impacting characteristics of Petrobras' international contracts.

This agreement, as well as any other that the company makes with the government, has a direct impact on the federal government's accounts.

However, according to Folha de S.Paulo, on April 8, "the company released a statement to the market saying that it was technically evaluating the draft conciliation notice placed for public consultation".

The company also stated that any decisions about those debts will follow “careful technical analyses". According to Petrobras, "facts deemed relevant will be disclosed to the market in a timely manner".

From slavery to modern struggles: a short journey through income inequality in Brazil

Brazil is one of the most unequal countries in the world. According to the Oxfam report, 63% of Brazil's wealth is in the hands of 1% of the population. The same survey shows that the poorest 50% own only 2% of the country's assets. In 2022, the average income of the 1% who earn the best in Brazil was 32.5 times greater than the average income of the 50% who earn the least, according to Piauí magazine.

To make matters worse, the COVID-19 pandemic has intensified inequality in the country. According to sociologist Marcelo Medeiros, the concentration of income in Brazil "is so great that a hypothetical distribution of half the income of the richest 1% would be enough to almost double the income of the poorest half of adults".

Read below a short summary of the history of inequality in Brazilian society:

Colonial Period (1500s-1800s): Brazil's colonial era was characterized by a highly unequal social structure based on slavery and genocide of the traditional population and land ownership. The Portuguese colonial rulers established large plantations worked by enslaved Africans, leading to extreme wealth concentration among landowners and elites while the majority of the population lived in poverty.

Abolition of Slavery and Industrialization (late 1800s-early 1900s): The abolition of slavery in 1888 marked a significant shift in Brazil's social dynamics. However, income inequality persisted as former slaves and their descendants faced economic marginalization. Industrialization during this period led to the emergence of urban centers and the growth of industrial sectors, but wealth remained concentrated among a small elite class.

Economic Growth and Urbanization (mid-20th century): The mid-20th century saw periods of economic growth and urbanization in Brazil, driven by industrialization and infrastructure development. However, income inequality remained high, with disparities between rural and urban areas and among different social groups.

Military Dictatorship (1964-1985): The military dictatorship era in Brazil, which lasted from 1964 to 1985, saw economic policies that favored wealthy elites and multinational corporations. This period contributed to widening income gaps and social unrest, particularly among marginalized communities and workers.

Democratic Transition and Economic Reforms (1980s-1990s): Brazil's transition to democracy in the 1980s and subsequent economic reforms in the 1990s aimed to address economic challenges, including inflation and debt. However, these reforms also led to increased income inequality as austerity measures and neoliberal policies disproportionately affected lower-income groups.

Social Programs and Poverty Reduction (2000s-present): In the early 2000s, Brazil implemented social programs such as Bolsa Família, which targeted poverty reduction and income redistribution. These programs, along with economic growth and rising education levels, contributed to reduced extreme poverty and improved income inequality indicators. However, income inequality remains a significant issue in Brazil. Factors contributing to ongoing income disparities include unequal access to education, healthcare, employment opportunities, land ownership patterns, racial and gender inequalities, and economic policies that may favor certain groups over others. Addressing income inequality continues to be a complex challenge requiring comprehensive social, economic, and political reforms.

Elon Musk vs. Brazilian Judiciary: a billionaire giving voice to the Brazilian far-right

Elon Musk decided to attack the minister of the Brazilian Federal Supreme Court, judge Alexandre de Moraes. 

In recent days, the owner of the platform X (formerly Twitter) has approached itself the Brazilian extreme right, which on January 8 attempted to carry out a coup d'état.

Paradoxically, Musk says that there is no freedom of expression in Brazil and that the orders to take down the accounts of those extremists who defended the end of the Democratic Rule of Law and the return of the military dictatorship in X would be a type of "censorship" and not defense of a democracy against agents who were openly attacking it.

The funny thing about this story is that Musk, who has factories in China and does business with Saudi Arabia, has never criticized these two countries for their lack of freedom of expression.

Elon Musk's messages on the platform actually served to regroup the far-right in Brazil and to give life to the theses contrary to democracy defended by this political sector. 

The billionaire, therefore, is working to help mobilize this far-right political forces in Brazil, which, after this clash, is already mobilizing a new act, called for by Bolsonaro, and which should bring together his supporters on the 21st in Rio de Janeiro.

Musk arrived on the scene at a time when Bolsonaro and the Brazilian extreme right were weakened, mainly due to the numerous accusations of corruption involving the former president, among them, the case of the jewelry that Bolsonaro allegedly received in Saudi Arabia (it is good to remember that the Saudis gave jewelry to Bolsonaro amid lobbying for Brazil in OPEC) — Bolsonaro could be indicted in the jewelry case, the penalty for the crime of embezzlement is 2 to 12 years in prison and a fine.

Musk's attacks on judge Alexandre de Moraes gave new strength to an right-wing extremist agenda that had been demobilized. It served to regroup certain bases of Brazilian far-right propaganda and gives voice to extremist and violent theories that mistakenly defend the that in Brazil we live in a dictatorship of the Judiciary. That is not true.

Short history of unemployment in Brazil, from 1900 to today

The history of unemployment in Brazil is a topic that has evolved significantly over time, changing as the country's politics went through democratic and dictatorial periods. It is always important to remember that the job market in Brazil, since the beginning of the 20th century, was built on a foundation that, until 1888, was based on slavery, it is also important to emphasize that the black population was massively excluded from the job market after the abolition of slavery.

Therefore, the emergence of the job market in Brazil took place within a context of profound social inequality and the total helplessness of black people by the government.

The Brazilian job market was born, therefore, within an environment of exclusion towards a significant part of the workforce (the black population) and several public policies aimed at financing immigration (mostly Europeans).

Between 1851 and 1900, approximately 2 million immigrants entered Brazil. This number represented half of the Brazilians who were out of the job market during this period. Thus, the exclusion is evident. Brazilians themselves, especially the black population freed after the end of slavery, could have met a significant part of this demand for labor.

Here is an overview of the key periods and trends in Brazil's unemployment history:

Early Years (1900s-1950s): In the early 20th century, Brazil experienced significant economic changes, transitioning from an agrarian-based system to industrialization. Unemployment rates during this period were relatively low due to strong demand for labor in expanding industries such as mining, agriculture, and manufacturing.

Industrialization and Urbanization (1960s-1970s): The 1960s and 1970s marked a period of rapid industrialization and urbanization in Brazil. While this led to economic growth and job creation in urban areas, it also resulted in structural unemployment as traditional agricultural jobs declined. The government implemented policies promoting industrialization and infrastructure development, influencing employment patterns.

Economic Instability (1980s): The 1980s were characterized by economic instability in Brazil, marked by high inflation, debt crises, and recession. These challenges contributed to rising unemployment rates as businesses struggled, leading to layoffs and reduced hiring.

Stabilization and Reforms (1990s): In the early 1990s, Brazil implemented economic stabilization measures, including the Plano Real in 1994, which aimed to control inflation and stabilize the economy. While these reforms initially led to improvements in economic stability, they also resulted in short-term job losses and adjustments in various sectors.

Periods of Growth and Recession (2000s-2010s): Throughout the 2000s and early 2010s, Brazil experienced periods of economic growth driven by factors such as commodity exports, domestic consumption, and government policies. However, there were also periods of recession and economic slowdown, leading to fluctuations in unemployment rates.

Recent Years (2010s-2020s): In the latter part of the 2010s and into the 2020s, Brazil faced economic challenges, including political instability, fiscal deficits, and the impact of global events such as the COVID-19 pandemic. These factors contributed to fluctuations in unemployment rates, with periods of job creation followed by increases in unemployment due to economic downturns.

Throughout Brazil's history, various factors have influenced unemployment rates, including economic policies, global economic conditions, technological advancements, demographic changes, and social factors. Government interventions, such as employment programs, social welfare initiatives, and labor market regulations, have also played a role in shaping labor market dynamics and positively addressing unemployment challenges.

A list of things to understand inflation: key concepts, causes and implications

Definition: Inflation refers to the general increase in prices of goods and services in an economy over time. It erodes the purchasing power of money, meaning that a fixed amount of money can buy fewer goods and services as time goes on. Therefore, inflation erodes the purchasing power of especially the poorest people, who always suffer the most when this happens.

Causes: Inflation can be caused by various factors, including an increase in demand relative to supply (demand-pull inflation), rising production costs (cost-push inflation), changes in the money supply, and expectations of future price increases.

Types of Inflation

Creeping Inflation: Mild and steady inflation over time.

Galloping Inflation: High and accelerating inflation, often leading to economic instability.

Hyperinflation: Extremely rapid and out-of-control inflation, causing the value of money to plummet.

Effects of inflation

Reduces Purchasing Power: People can buy fewer goods and services with the same amount of money.

Interest Rates: Central banks may raise interest rates to curb inflation, affecting borrowing costs and investment decisions.

Income Redistribution: Inflation can impact different groups unevenly, benefiting debtors (as they repay loans with less valuable money) and harming savers.

Uncertainty: High inflation rates can create economic uncertainty and disrupt long-term planning for businesses and individuals.

Measuring Inflation

Consumer Price Index (CPI): Tracks changes in the prices of a basket of goods and services typically purchased by households.

Producer Price Index (PPI): Measures changes in prices received by domestic producers for their goods and services.

GDP Deflator: Calculates the ratio of nominal GDP to real GDP, reflecting overall price changes in an economy.

Controlling Inflation

Monetary Policy: Central banks use tools like adjusting interest rates, open market operations, and reserve requirements to influence inflation.

Fiscal Policy: Governments can influence inflation through taxation, regulation, and spending. In the case of government spending (public investments), for example, if the government stops maintaining a road, this generates future liabilities because there will be greater expenses in its recovery later on. Very often, strict fiscal policies do not consider this rate of infrastructure depreciation, which is a serious error.

Inflation Expectations: Expectations about future inflation can influence current economic behavior, such as wage negotiations, business pricing decisions, and investment choices.

Global Factors: Inflation can be influenced by global economic trends, including international trade, exchange rates, and commodity prices.

Inflation vs. Deflation: Deflation is the opposite of inflation, where prices generally decrease over time. While deflation may sound positive, it can lead to economic stagnation and debt problems.

Long-Term Implications: Persistent high inflation can erode savings, reduce investment, and harm economic growth if not properly managed.

Safety First: A Guide to the Most Secure Cryptocurrencies Available

We all know that cryptocurrencies carry risks due to their volatility and regulatory uncertainties. Before investing, it's advisable to conduct thorough research. In order to help with this research, here is a list of cryptocurrencies that have historically been considered among the most profitable or have gained significant attention:

Bitcoin (BTC): As the first and most well-known cryptocurrency, Bitcoin has seen substantial growth in value over the years. Its high market capitalization and widespread adoption contribute to its status as a profitable investment for many.

Ethereum (ETH): Ethereum is known not just for its cryptocurrency (Ether) but also for its smart contract capabilities. The Ethereum blockchain is used for various decentralized applications (dApps), which has contributed to its value and profitability.

Binance Coin (BNB): Binance Coin is the native cryptocurrency of the Binance exchange, one of the largest and most popular cryptocurrency exchanges globally. BNB's value has seen significant growth due to its utility within the Binance ecosystem.

Cardano (ADA): Cardano is a blockchain platform known for its focus on security and scalability. Its native cryptocurrency ADA has gained attention for its potential in the decentralized finance (DeFi) sector.

Solana (SOL): Solana is a blockchain platform designed for high-speed transactions and scalability. SOL has gained popularity due to its performance and use in various decentralized applications.

Polkadot (DOT): Polkadot is a multi-chain blockchain platform that enables different blockchains to interoperate. Its native token DOT has seen growth as the Polkadot ecosystem expands.

Avalanche (AVAX): Avalanche is another blockchain platform known for its high transaction throughput and low fees. The native token AVAX has gained traction in the DeFi space.

Chainlink (LINK): Chainlink is a decentralized oracle network that connects smart contracts with real-world data. Its LINK token is used to pay for services within the Chainlink ecosystem.

Uniswap (UNI): Uniswap is a decentralized exchange (DEX) running on the Ethereum blockchain. The UNI token is used for governance and liquidity provision within the Uniswap protocol.

Terra (LUNA): Terra is a blockchain platform focused on stablecoins and decentralized finance.

The LUNA token is used within the Terra ecosystem for various purposes.

Petrobras (PETR4) announced 18.77% increase in gasoline in Brazil, which has doubled in price in just over a year. Diesel will rise 24.9%; truckers threaten to close the country's roads

After another increase in the prices of oil, Petrobras decided to increase the prices of gasoline anda diesel. Since Michel Temer's government, Petrobras has adopted a pricing policy that links readjustments in the country to the price of a barrel of oil abroad. This has led the country to suffer greatly from the rise in oil prices and the volatility of the international oil market.  

Today the price of diesel rose 24.9% and the price of gasoline rose 18.7%.

To make this situation worse, according to the candidate for the presidency of Brazil, Ciro Gomes, “Petrobras is making a profit of 38% by despoiling the Brazilian people and, worse, distributed 101 billion reais in profit to minority shareholders, which are bankers in Brazil and abroad."

Despite criticizing this policy, Bolsonaro has not changed Petrobras' pricing policy during his government (in the last days, oil prices have been rising as tensions in Ukraine mount).

According to journalist Mônica Bergamo, "one of the main leaders of the 2018 truck drivers' strike, Wanderlei Alves, aka Dedeco, says that Brazil has to stop in protest against the fuel increase announced this Thursday (10) by Petrobras - from 18, 8% for gasoline, 16.1% for cooking gas and 24.9% for diesel in refineries". 

 

In one year, the Selic interest rate goes from 2% to 9.25%

The Selic interest rate is the monetary policy interest rate used by the Brazil Central Bank (BCB). In 2021, that tool went from 2% in february to 9.25% in november after the last reunion of Copom, the BCB's Monetary Policy Committee. 

At the last Copom meeting, held yesterday, the Selic rate rose from 7.75% to 9.25%, up 1.5 percentage points. According to analysts, this more hawkish tone by the Copom is an attempt to prevent runaway inflation. 

Which indicates that interest rates in Brazil will stay high for longer. The expectation is that inflation will only start to decelerate around the second quarter of 2022, but not even this is guaranteed given the numerous crises that President Bolsonaro and his government produce weekly.

The feeling of insecurity generated by the government greatly affects the forecasts of investors and the market in general.

With that, the next government should receive a country pressured by the basic interest rates of the economy and with the risk of greater lack of control in the public debt, which is already high.

  

Investment by global funds in Brazil drops from 1.94% in 2009 to 0.23% in 2020

Foreign investors are fleeing Brazil. The expectation of an increase in the US interest rate, added to the aversion to the risks of investing in a country where the government is taking great steps towards a fiscal crisis, produced a flight of funds dedicated to Brazil.

According to the newspaper O Estado de S.Paulo, Brazil's participation in funds dedicated to emerging markets dropped from 16.4% in 2011 to the current 5.1%.

For the poorest Brazilians, the scenario is terrible. Inflation reaches 40% for this portion of the population and the level of unemployment has practically doubled. According to DIAP, Brazil is on the way to stagflation.