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Friday, October 10, 2008

Another Big Leg Down On Bovespa

Not a good sign. There was a brief resurgence yesterday but that died. Crude oil continued to collapse, metals continued their slide, and the race to the exits picked up speed. Dated Brent spot is below $76 and WTI Cushing spot is below $81.

Check out the Bovespa 3 year chart. (You'll have to click on the 3 year tab.) Brazil is selling US dollars to try to stem the fall of the Real, and Mexico is trying to sell USD to shore up their peso. India has been fighting a losing battle to shore up the rupee using similar tactics.

For American manufacturers, all this is not exactly good news. First, the economic conditions indicate a slowdown of precisely the segment in which many of our manufacturers compete well. Second, the USD is appreciating against a lot of currencies, making them less competitive.

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