{"id":10813,"date":"2015-08-07T07:37:51","date_gmt":"2015-08-07T12:37:51","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10813"},"modified":"2015-08-07T07:37:51","modified_gmt":"2015-08-07T12:37:51","slug":"the-seventh-largest-economy-in-the-world-spirals-down","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10813","title":{"rendered":"The Seventh-Largest Economy in the World Spirals Down"},"content":{"rendered":"

The Seventh-Largest Economy in the World Spirals Down<\/a><\/h3>\n

HSBC, which knows a thing or two about the world, and about Brazil, is bailing out of Brazil.<\/p>\n

It\u2019s unloading its \u201centire business in Brazil,\u201d\u00a0it said<\/u><\/a>\u00a0this week, including retail banking and insurance. It will hand its long list of wealthy clients and over 21,000 employees to Bradesco, one of the largest private banks in Brazil, for $5.2 billion. Too much? Bradesco\u2019s stock has since plunged over 9%.<\/p>\n

Once the deal gets regulatory approval and closes, HSBC is out of Brazil. \u201cThe transaction represents a significant step in the execution of the actions announced during the Investor Update on 9 June 2015,\u201d it said. After that update,\u00a0Reuters<\/u><\/a>\u00a0had described HSBC\u2019s motivations with these choice words:<\/p>\n

For shareholders, betting on Brazil was risky as lenders grapple with tax hikes, weak credit demand, rising defaults, and the impact of what looks likely to be the country\u2019s worst recession in over two decades.<\/p><\/blockquote>\n

The seventh largest economy in the world in 2014, according to the World Bank, is spiraling down, with private sector output, as Markit put it, falling at the \u201csharpest pace since March 2009.\u201d<\/p>\n

This is how Markit titled its Brazil Services PMI\u00a0report<\/u><\/a>\u00a0on Wednesday: \u201cService sector activity drops at joint-fastest rate in survey history.\u201d<\/p>\n

The index hit\u00a039.1 in July (50 is the dividing line\u00a0between contraction and expansion),\u00a0the fifth month in a row of contraction, with all sub-sectors in the survey \u201cregistering substantial falls in business activity.\u201d<\/p>\n

To add to the toxic mix, costs soared, with the rate of increase reaching an 81-month high, third fasted in survey history, due to \u201cinflationary pressures, exchange rate factors, and client fee adjustment.\u201d No green shoots in the immediate future: new orders fell for the fifth month in a row. The \u201cdeteriorating operating environment\u201d caused the pace of job losses to accelerate \u201cto a survey record.\u201d<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Seventh-Largest Economy in the World Spirals Down HSBC, which knows a thing or two about the world, and about Brazil, is bailing out of Brazil. It\u2019s unloading its \u201centire business in Brazil,\u201d\u00a0it said\u00a0this week, including retail banking and insurance. It will hand its long list of wealthy clients and over 21,000 employees to Bradesco, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[90,3372,426,7571,2783,683,4254,4255,888],"class_list":["post-10813","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brazil","tag-hsbc","tag-inflation","tag-markit","tag-pmi","tag-reuters","tag-wolf-richter","tag-wolfstreet","tag-world-bank"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10813"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10813\/revisions"}],"predecessor-version":[{"id":10814,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10813\/revisions\/10814"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}