Brazil's president refuses visit to Herzl's grave
March 15, 2010
JERUSALEM (JTA) -- Brazil's president said he would not visit the grave of Theodor Herzl during his first official visit to Israel.
President Luiz Ignacio Lula da Silva, who arrived in Israel on Sunday, refused to visit Herzl's grave, which is part of the itinerary for visiting foreign officials this year in honor of the 150th anniversary of the father of Zionism. The Brazilian president is reportedly scheduled to visit the grave of Yasir Arafat during a visit to Ramallah.
"It is an insult to Israel's citizens and to Zionist communities around the world," World Zionist Organization head Hagai Merom said Monday. "Avoiding putting a wreath at Herzl's grave is the same as refusing to visit the graves of Mustafa Kemal Ata Turk in Turkey or the tomb of Mahatma Ghandi in India."
U.S. Vice President Joe Biden visited the grave last week.
Israeli Foreign Minister Avigdor Lieberman boycotted Lula's address to the Knesset Monday
Lula said prior to his trip that new countries should help mediate between Israel and the Palestinians.
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Best Economy in the Americas – Brazil
Tony Daltorio, The Investment U Research Team
Wall Street tends to take a very myopic view of the world – the view that the entire financial universe revolves around them and the United States. And that what goes on in other countries is unimportant.
It's why many Wall Streeters have missed one of the greatest rags-to-riches stories in global economic history – Brazil. Brazil's economy has gone from a "basket case" to being as solid as a Brick.
Brazil has made huge strides from the very debt-ridden, bureaucratic country of the past. Years ago, the country restructured its finances and has resisted the temptation to use economic crises, such as in neighboring Argentina, as an excuse to default on its obligations.
Yet, many on Wall Street still think of Brazil as a backwards "third-world" country that goes crazy every year, four days before Ash Wednesday for Carnival.
Perhaps Wall Street could use someone like Nicholas Copernicus. Copernicus was the famous Polish astronomer who – in 1543 – showed that the Earth was not the center of the universe.
Until Wall Street adopts a Copernican view of the financial universe and realizes that they are not the center of the financial cosmos, informed investors can take advantage of the many international opportunities they've ignored. Here is what you need to know about Brazil's economy and some easy ways to invest in it.
Brazil's Economy: A Success Story
Brazil has made great strides under current President Luiz Inacio Lula da Silva, commonly known as Lula. Lula took office on January 1, 2003 and he has, since being in office, run a very orthodox fiscal policy. The country has maintained fiscal and trade surpluses for the better part of his presidency.
Brazil's highly capable central bank has followed a very strong monetary policy. They have maintained high levels of real interest rates, which prevented the economy from overheating and creating an over-expansion of credit – unlike the policies of others like the Federal Reserve.
In late April, the Brazilian central bank cut their interest rate from 11.25% to 10.25%. This leaves them plenty of room to cut interest rates further, if necessary, to stimulate Brazil's economy. Again, this distinguishes the Brazilian central bank from the Federal Reserve and others, who have left themselves virtually no room to cut interest rates further.
Also, Brazil has long pursued a strategy of achieving energy independence from foreign oil. Brazil started its own ethanol program – based on its rich sugar crop, and offshore oil exploration using deep-sea drilling methods. It's achieved a remarkable degree of energy self-sufficiency – again setting it apart from much of the rest of the world.
Brazil, unlike the United States and other economies, is not over-levered – It has a prudent fiscal and monetary policies, balanced and diversified trade, along with a coherent energy policy.
It leaves the country well positioned for the future.
Another factor working in Brazil's favor is the huge amount of money that the Federal Reserve is pumping into the U.S. financial system. Whether you agree or disagree with the Federal Reserve's corrective procedures, one thing is certain – eventually this money printing will result in lower purchasing power for the U.S. Dollar.
This lower purchasing power for the dollar has already begun to fuel a rally in commodity prices. And Brazil – a major producer and exporter of many commodities – is perfectly positioned to take advantage of it.
Easy Ways to Profit From Brazil
There are several easy ways for American investors to participate in the Brazilian growth story. Some of my favorite methods are purchasing Brazilian ETFs. Here are two ETFs that focus exclusively on Brazil:
iShares MSCI Brazil Index Fund (NYSE: EWZ) contains 72 of Brazil's largest companies. I am a fan of this fund because of the heavy weighting given to two of my favorite commodities companies – oil giant Petrobras (over 24%) and mining giant Vale de Rio (over 16%). It provides an easy way to play two of my major themes – emerging markets and commodities – with one investment.
Van Eck Brazil Small Cap ETF (NYSE: BRF) provides exposure to small-cap companies that are domiciled in Brazil and that generate at least 50% of their revenues in Brazil. This fund gives investors a concentrated play (52 components) on domestic Brazilian investment themes such as consumer goods. However, it does not offer the concentration on commodity plays like EWZ. This fund is relatively new and began trading on May 12, 2009.
More aggressive investors can opt to purchase individual Brazilian stocks that trade here in the U.S. as ADRs, or American Depositary Receipts. There are many Brazilian stocks in various sectors available to American investors. Some of the sectors include:
Commodities
- Petrobras ADR both common (NYSE: PBR) and preferred (NYSE: PBR.A), Vale de Rio ADR, both common (NYSE: VALE) and preferred (NYSE: VALE.P); and steel giant CSN ADR (NYSE: SID).
Consumer Companies
- There's Beverage giant AmBev ADR common (NYSE: ABV.C) and preferred (NYSE: ABV) and food giant Perdigao ADR (NYSE: PDA) – which will soon change its name to Brasil Foods after it completes the takeover of its smaller rival Sadia ADR (NYSE: SDA).
Utility Companies
- Includes electricity provider Electrobras SA ADR common (NYSE: EBR) and preferred (NYSE: EBR.B); Companhia Energetica Minas Gerais ADR (NYSE: CIG), CPFL Energia ADR (NYSE: CPL), and water company Companhia de Saneamento Basico ADR (NYSE:SBS).
Financial Companies
- Brazilian banking firms Banco Bradesco SA ADR (NYSE: BBD) and the merged Itau Unibanco Banco Multiplo SA (NYSE: ITUB).
There are also many other Brazilian ADRs that trade here in the US.
Unlike many on Wall Street, investors would be wise to adopt a Copernican view of investing and include exposure to Brazil in their portfolio. And, perhaps with the gains made by investing in the Brazilian growth story, investors could visit Rio de Janeiro during Carnival, and have a great time.
Good investing,
Tony Daltorio
P.S. If you'd like to find out more on uncovering some of the best foreign investments around the world, take a look at the Oxford Club's New Frontier Trader Service.
--
Peace.
Michael Santomauro
Editorial Director
Call anytime: 917-974-6367
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