• Shares of C.H. Robinson Worldwide, Inc. (CHRW) climbed as high as 4.8% in trading yesterday (Monday) before closing at $44.03 a share. For the past five days, the company’s stock jumped nearly 16%. Money Morning Contributing Editor Horacio Marquez recommended investors buy C.H. Robinson’s stock yesterday in his popular Buy/Sell/Hold series.

• A team of economists at Morgan Stanley (MS) believes Latin America’s economy may contract 4% this year, which would be the biggest decline since 1980. Leading the region’s decline is South America’s largest economy, Brazil, whose gross domestic product could fall as much as 4.5%, Morgan Stanley said.

• Foreign investing in China fell by 15.8%, or $5.83 billion, in February, from the year earlier. The decline marks the fifth straight month that companies and government tightened their spending on Chinese assets, Bloomberg reported.

• The 146-year-old Seattle Post-Intelligencer will publish its final print issue today, becoming an online-only news portal. The paper’s owner, The Hearst Corp., made the decision after failing to find a buyer for the newspaper, Reuters reported.

• The government said Sunday that it intends to seize real estate, cash, bonds, art, autos, boats and other property worth more than $100 million from Bernard Madoff and his wife, including the Madoffs’ $7 million Upper East Side apartment in Manhattan and homes in Montauk, New York, Palm Beach, Florida, and France. Prosecutors will seek $17 million in cash and $45 million in bonds in accounts in Ruth Madoff’s name, acting Manhattan U.S. Attorney Lev Dassin told Bloomberg. Madoff, 70, pleaded guilty March 12 to defrauding investors of as much as $65 billion in the biggest Ponzi scheme in history.

• The U.S. Treasury said yesterday (Monday) that foreigners were net sellers of U.S. securities in January, a worrying development at a time when the government is rolling out a massive spending plan to mitigate the 14-month recession. Adding to the economy’s problems, the U.S. Federal Reserve said industrial production fell to its lowest level in almost seven years in February. U.S. industrial output fell 1.4% in February, following a 1.9% drop in January, according to government data, Reuters reported.

• MGM Mirage (MGM) is in talks with banks to pledge casinos as loan collateral, as it seeks to modify lending terms and avoid default on a $7 billion senior credit facility. The company agreed in December to sell the its Treasure Island casino and canceled a condominium development at CityCenter, MGM’s joint venture Strip development with Dubai World. The Las Vegas-based casino company said it is also open to selling more assets, Bloomberg reported, citing a person with knowledge of the discussions.

Source: Global Investment News Briefs Tuesday, March 17, 2009

Brazil is certainly in this basket of falling markets. Fortunately for you, it shouldn’t be.

Sure, more than half of Brazil’s exports are commodities like soybeans and iron ore. But there’s a very good reason why Brazil is a safer investment than most — stability. Before you get started, let me explain…

Over the past two decades, Brazil has gone through many crises. Each one taught the country how to handle poor economic situations. But it was the most recent one that puts us in a tremendous advantage.

After so many years of falling on its face, Brazil elected President Luiz Inacio Lula da Silva. Leaving our opinions aside, Lula has done something to put the country in the driver’s seat this time around.

At the beginning of this decade, the world punished Brazil for its high debt levels. Its market crashed, erasing years of growth. Since this pseudo crisis, the Lula administration has stabilized the country’s economy and paid down debt. On top of these moves, it’s also put tough regulations in place across many industries. Most investors thought these regulations limited growth, which they did. But now investors – or, at least, smart ones – see the regulations as necessary evils.

By regulating industries like energy and finance, Brazil kept a steady, stable growth rate of about 4% in recent boom years. The rest of the emerging nations of the world were getting used to a 7% rate. These other “emergers” were funding their growth by leveraging their assets and creating massive debts. Brazil was paying its down, while accruing next to no new debt.

The overall stock market hasn’t noted this major difference, however. Brazil’s major index, the Bovespa, is down 40% over the last 12 months – alongside the rest of the world.

While others struggle with “bad assets” and massive debts, Brazil will be ready to strike.

Energy is our favorite way to play Brazil. Without energy, you can’t expand. Just look at what China is doing these days. As it continues to come online, it burns through more coal and oil than anyone could have imagined. Brazil, while it’s no China, is still demanding an enormous amount of energy.

The largest difference between Brazil and China is the regulations. There are many more aggressive mandates in the Brazilian energy industry than most Chinese, or Americans for that matter, can even fathom.

For instance, there’s been a lot of talk in recent years here in the U.S. about switching regular gasoline for ethanol to power our light vehicles. Brazil has been doing this since 1975. That’s over 30 years of mandates, which require all light vehicles to use at least 25% ethanol blends. The country is the world leader in ethanol efficiency. That came from strategic mandates.

The rest of the Brazil’s energy situation is no different. In recent years, hydroelectricity became the country’s energy solution. Now 80% of Brazil’s electricity comes from hydropower. This energy revolution places Brazil 42nd in CO2 emissions worldwide. It produces less CO2 than countries like Israel and the Philippines, which are just fractions of Brazil’s size and population.

Early investors in Brazil’s booming hydropower industry stand to make massive gains, while the rest of the world’s nations are trying to put their own economies back together. That’s where you need to be looking.

Source: Brazil’s Hydropower Advantage

• Dominique Strauss-Kahn, Managing Director of the International Monetary Fund yesterday (Tuesday) warned of a “Great Recession” taking place this year. “The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes,” Strauss-Kahn told African political and financial leaders in the Tanzanian capital. He added his forecast may “even be too optimistic.”

• United Technologies Corp. (UTX), makers of Carrier air conditioners and Otis elevators, announced a $750 million restructuring plan that includes 11,600 job cuts. The plan is a response to expectations that 2009 revenues will fall $2.7 billion short of projections, Bloomberg reported.

• Brazil’s economy expanded 1.3% in the fourth quarter, and economic growth for 2008 clocked in at 5.1%. The fourth-quarter gross domestic product (GDP) growth is a drastic decline from the 6.8% year-over-year growth rate in the previous quarter, Reuters reported.

• Malaysia’s government yesterday (Tuesday) added $16 billion (60 billion ringgit) in tax incentives and spending to its stimulus plan, and predicted its economy would contract as much as 1.0% this year. That would be the first contraction in 10 years. The additional stimulus measures will take place over the next two years, Bloomberg reported.

• General Motors Corp. (GM) may sell at least half of its Opel unit to private investors with German government support.  GM’s European unit will still have to save $1.2 billion (784 million euros) annually under the plan. The plan could include closing an Antwerp, Belgium, factory and selling a plant in Eisenach, Germany, Bloomberg reported citing a person who didn’t want to be identified because the talks are private.  GM is seeking U.S. and foreign aid to survive the current economic downturn.

• Bankruptcies by publicly traded U.S. companies are running at twice their 2008 pace, fueled by large companies with assets of more than $1 billion, Reuters reported. There have been 46 bankruptcy filings in 2009 by public companies with assets of $74 billion. That’s nearly seven times more than the $11 billion in assets of the 21 companies that filed for bankruptcy by this date last year. Two of the more noteworthy companies were Nortel Networks (NT), and Smurfit-Stone Container Corp (SSCCQ), according to research firm BankruptcyData.com.

• Hedge funds may slash 20,000 jobs worldwide this year, as investment losses and client withdrawals erode fees. The dismissals account for a full 14% of the industry’s jobs, and come on top of the 10,000 jobs that disappeared last year. Employment peaked at 155,000 in 2007, and has since dropped to about 145,000, according to estimates by New York-based Options Group, an executive-search firm. About 920 hedge funds, or 12%, closed last year, Bloomberg reported.

• The Securities and Exchange Commission will restore the uptick rule in about a month, U.S. Rep. Barney Frank, chairman of the House Financial Services Committee, said yesterday (Tuesday). Bringing back the uptick rule, which would only allow short sales when the last sale price is higher than the previous one, could calm volatile markets, market-watchers said. The rule also could stem a stock’s decline by preventing short sellers from piling on one after another, Reuters reported.

Source: Global Investment News Briefs Wednesday, March 11, 2009