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Bank deleveraging has barely started

Bank deleveraging has barely started

Banks lending money to governments to help fund bank bailouts looks horribly circular

The US treasury market reaches breaking point

The US treasury market reaches breaking point

The structural issue that could cause the world's market of last resort to grind to a halt

November 2002

A force for democracy or evil?





Lula: a job on his hands to
export his domestic popularity
to Washington

The Brazilian presidential elections were a triumph for democracy. The winner, Luis Inacio Lula da Silva, became the first leftist ever elected president. And in an election notable for its transparency he won the largest ever share of the vote.

While Brazilians danced in the streets, Wall Street greeted Lula with cautious optimism. Analysts reckoned he would stick to the previous administration's IMF agreement and manage to get through 2003 without a catastrophic default.

The reaction was different in Washington. The anti-Castro brigade is already spitting fire about the actions of populist former coup leader Hugo Chávez in Venezuela. They won't then be happy about the likely election of populist former coup leader Lucio Gutierrez in Ecuador.

Henry Hyde, chairman of the House international relations committee, seized on the fact that Lula has visited Cuba and Venezuela. In a letter to president Bush he echoed George W's own rhetoric, warning: "There is a real prospect that Castro, Chávez, and Lula da Siva could constitute an axis of evil in the Americas which might soon have nuclear weapons."

Hyde's letter seems to have rattled some analysts more than Lula's election did. Walter Molano, chief economist at BCP Securities, says: "This is a much bigger risk for Brazil than its ability to roll over its next domestic bond issue, or who will be the next president of the central bank."

The US State Department has made it clear it doesn't share Hyde's view of Lula. But if Brazil's new president makes any political misjudgements, the Republican right wing seems ready to pounce.







Some senior executives within banking are, in private of course, admitting the current composition of boards is not serving the industry’s best interests

Fewer than one in three directors of 17 banks outlined in Board stupid has any direct experience of the banking industry. Most worrying for shareholders, only one in 10 directors are former bankers in a non-executive role.

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