One of the great gainers from falling global interest rates
will be emerging market financial assets - though not everywhere.
I've just visited one emerging market that should outperform this
year: Brazil.
Brazil's artificially constructed capital is Brasilia. In
Brasilia, the Congress building is surrounded by concrete wings
jutting out into the sky at right angles. They house the government
ministries. It is a symmetric idealized vision of the perfect
corporate state, built under the old 1980s dictatorship, where
everything was planned and nothing flew.
Much of Brazil's recent better fortune is due to the undoing of
that dictatorship. But its legacy still hangs heavy, particularly
when it comes to the judiciary and the constitution.
It means reform will always be gradual and politically convoluted.
But that may suffice for global investors, at least over the next
year.
Brazil's recent success has been based on four policy pillars: a
floating exchange-rate...
