Money

The Economist II

Full Transcript - Episode 21

 

Wall Street bets large as the Dutch beef up in Brazil. Jenkem bunkum and What's in a Name? - Part II.


PLUS economist Tales Rabelo returns to discuss pandemic winners and losers and where to invest in 2021.

G: Aren’t we supposed to have started? Let’s go!

J:  Well, we’ve started, yes! So, welcome!

G: Welcome to...

J: ...The Samba Buzz!

G: That’s buzz with two zeds.

J: Or two zees, if you prefer. Every time I wanna say this is another story of the pandemic, the pandemic just doesn’t get over with. I mean we’re still in the middle of this...this thing.

G: It feels like Groundhog Day, doesn’t it?

J: Yeah, it’s just like the...

G: Every week’s the same.

J: Every...every pod, it’s the new...it’s the same damn pandemic. I can’t get out of it.

G: Yes. Mind you, we are getting variants these days. So, that’s making it more interesting.

J: Yeah. Yeah, that’s true.

G: We’ve got the South African variant. We’ve got the Brazilian variant. We’ve got the UK variant. And now inside the UK they’ve got a local variant within the UK called the Kent variant. So,...

J: Oh, that’s very nice. We’ve also got the Manaus variant.

G: The Manaus variant. So, it’s like...er...Smarties.

J: I don’t know which one they’re the most scared about, though.

G: Yes. They do say it’s a bit more deadly, possibly.

J: Yeah, the...the thing about Manaus is that they say it spreads very rapidly. So, possibly as we’re speaking, we’re contaminating each other. I don’t know.

G: Quite probably. And other people...erm...some people have had the thing, have been getting reinfected too, which is not good.

J: Yeah, I...that’s not good.

G: What have we got today?

J: Well, yeah, that’s exactly what I’m gonna ask, but...

G: What have we got today, Jay?

J: Well, we have a good pod today. Er, we have a special guest speaker. He is our first two-time guest to this show.

G: Yes, we’ve got Tales Rabelo coming in.

J: Tales Rabelo – he’s an economist. If you remember, last year he was on the show. He gave a terrible forecast for what was going to happen in 2020. And...er...that came back to bite him but he...he was strong enough to come back to the show and face reality.

G: So, we’re going to get some more tips and try and get our money back that we lost off him last year?

J: Yeah, because that didn’t work out so well. But anyway, erm...

G: And I guess we’ve got some What Caught My Eye. Good.

J: And Guru that’s going to help people with writing.

G: Great. Let’s go! Let’s do it.

J: Let’s go.


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J: So, Gee. I’m very curious what you have this week with What Caught My Eye.

G: What caught my eye...erm...has been the stock market, actually. Do you play the stock market?

J: No, I avoid that. That’s...it’s too helter-skelter for me.

G: Well, last week it got a little bit more interesting than normal. Erm, because there was a revolution from the ‘little guy’.  

J: A revolution from the little guy? In what way? Is he buying little stocks?

G: Well, basically, what has been going on – and started about a week ago – was that some of the people on social media, who share their opinions on Reddit, they have a little investment club.

J: Ok.

G: And they call it Wall Street Bets. And these guys are...

J: This is open to anybody or it’s a closed group?

G: This is open to anybody. You just have to register and you can share tips.

J: Ok.

G: And you can get ideas. And somewhere along the line, one of these guys said – “I see that the big hedge funds, the big investors, are going to sell – or ‘short’, as they say – the stock called GameStop.”

J: Ok.

G: And GameStop is basically a little...

J: What’s...what’s GameStop?

G: It’s a store in the United States where they sell games. They sk...sell video consoles and that sort of stuff. And it’s been losing a lot of money. It’s been losing like 300 million just over the last year.

J: Because of what?

G: Because of the pandemic and nobody’s going to the stores.

J: Ah, nobody’s buying...actually buying their product, so they’re going down.

G: Exactly. I guess they don’t have a big...er...internet operation.

J: Ok.

G: So, they haven’t been selling much on there. So, a lot of the big investors, they thought, ‘well, this stock’s gonna go down in value, so...’

J: And crash.

G: So, what they did, is they, basically, ‘short’ the stock, which means... it’s a complicated process. It’s a little bit tricky to explain but, basically, they borrow the shares. Then they sell the shares. The price goes down. Then they re-buy the shares back again and they return them to the original owner. So, they haven’t done the original owner any favors, but they have made a nice little profit for themselves.

J: Why would the ori...ok...if...if... So, if I’m going to let my...let somebody borrow my stock, why...why... and I know they’re gonna short – why...why would I do this?

G: Well, probably you don’t believe they are gonna go down or you get a fee for this, of course. So, you’re going to get a payment.

J: So, basically, I let somebody pay me, so I can lose money? That’s...

G: If...if what they plan to do happens, then you lose money, yes. So this is one of the things I found strange.

J: If you...you talk about bad investing, tha...that’s...that’s a bad idea in general.        

G: Anyhow, what happened? They...these guys on this Reddit...um....investment group, Wall Street Bets, they said – “Let’s buy this stock! Let’s buy GameStop. Let’s put it to the big guy! Because if we can force the price up, then the big hedge fund, he’s going to lose a fortune because he is going to be committed to buy it at a higher price when he returns it!” And so, all these other little guys, they all piled in and they forced the price of the stock up by 700%!

J: 700%?

G: Yes.

J: Wow. So, the...the big guys, they’re still...they’re still selling stock, right, this whole time?

G: So, they’ve committed themselves to this deal where they have to return these shares to the people who they borrowed them from...

J: Right.

G: And they have to buy them back at whatever the price is, and of course the price is now something like six-times more. One of these companies lost $2 billion.

J: Wow. Ho...how...and how fast did they lose $2 billion?

G: Well, within a...literally a day. 24 hours.

J: Boy, you talk about a bad 24 hours for those guys. Oh my!

G: So, it’s...it’s been very interesting. And, of course, you know, these little guys, they’re all giving it lots on the...on the Twitter. “Go! Go! Go!” and lots of...

J: Well, they must have made a fortune?

G: Some of them would have made a lot of money, for sure.

J: Sure.

G: And there was a ten-year-old who made a lot of money, actually.

J: He says, “I like games. I’m buying this!” Right.

G: Well, th...that was one of the criticisms was...was turning the stock market into a game. Which it is, of course, but...um...

J: Well, it’s always been a game.

G: And, of course, now we’re getting lots of other stocks that are being similarly targeted. So, it’s all getting very interesting.

J: Hm. My local story this week is actually about...er...the meat-packing industry. So, er, Mafrig, JBS, ...er...these types of...of large, er, meat-packing industries. Right.

G: Boo. Sss.

J: Right, and...and what do they do? Well, they basically have all of these cattle out there. They’re cutting down Amazon forest, putting in...raising beef production, or whatever. They sell their...their meat overseas, and they make large profits.

G: Yes.

J: But at the same time you’re cutting down Amazon forest.

G: Yes.

J: What I did not know but I found out is that there are two pension funds in the Netherlands and one in Japan which together have invested a combined half a billion dollars in Brazil’s top three meat-packers.

G: Wow.

J: So, here you get into a very curious situation because the...the Dutch government, for one, has been extremely critical of Brazil for deforestation in the Amazon but at the same time, their pensions funds – and then we’re talking not about private pension funds but the...

G: The public ones.

J: The public ones are investing huge sums of money here in the Brazilian meat-packers. So, it’s like, ok, they see the opportunity and they wanna make money of of it and at the same time they’re...they’re saying – “Oh, what you are doing is very, very bad, Brazil. Bad Brazil.

G: Yes.

J: But they’re the ones investing the money, causing the price to go up.

G: Right. So they...they’ve been buying shares, then, basically?

 J: Yeah. So...so, it’s very curious. And...and just to, kind of, put this in perspective, what they have invested is even more than the entire 2021 budget for Brazil’s environment ministry, which is right around $530 million.

G: So, where is all this money going, do you think?

J: I don’t know, but I think they’re cutting down forests with it. I don’t know what...I don’t know what to make out of it, and...er...

G: It does seem strange that it comes from Holland, like that, doesn’t it?

J: There was a...a Dutch NGO led by Ward Warmerdam – he’s the senior researcher at Profundo. And he says that this is one of the problems that most pension funds aren’t open and, let’s say, transparent in what they’re investing in.

G: Right.

J: He says, “Few pension funds open their portfolios to public scrutiny”. And he says, er, “It’s a sector with a large black hole. In most parts of the world, you don’t know where your retirement money is being invested.”

G: And that’s kind of scary, isn’t it?

J: And that’s...and see...and that’s kind of the hypocrisy because the people living in Holland – I mean they ride around on bicycles, they are totally green, green energy, they’re thinking green. They’re trying to limit biofuels production. They have enormous taxes on cars, and petroleum there.

G: Yes.

J: But at the same time they are investing in deforestation. So...

G: Well, you would think that would change because in most sectors now the consumer is getting more interested in knowing where their products are coming from, and how the products are produced and whether it’s environmentally friendly, and whether slave labor’s involved, and probably the same thing will happen with funds, in that they will want to know where their money’s going. Is it sponsoring dictators? Is it going to, you know, again, slave labor, and that sort of thing. So, probably I would imagine this will change over the next years.

J:  So, but let’s look at it from another perspective. Let’s say...ima...let’s say you are a...a small person with...you want to get a government pension. And you are assuming that the government...that what the government is telling you is correct. But how can you control it?

G: Well, this is true. This is about information.

J: I mean. The...the...that’s kind of the situation. You don’t really know.

G: Yes.

J: Maybe it’s all fake news. Who knows?

G: So, we should boycott Holland, then, yes? You...you’re from there. You’ve got connections. I think you should lead the boycott!

J: Thank god, I’m not from Holland. I did live there for a few years but I’m not – definitely not from there!

G: Ok. You...you came from their at one point.

J: Yeah, and then the curious thing about everything is, if you try to buy a ham. Let’s...let’s imagine you wanna try to buy a hamburger or, let’s say, a nice steak in Holland.

G: Yes?

J: You’re going to be paying a fortune for that thing. That’s like €15, just if you go to the butcher and buy it. So, yeah.

G: There we have it.

J: Anyway.

G: Not the mystery meat but the mystery meat investment.

J: Exactly. There you go. Ah, ok, do you have any...another story for us?

G: I have one more story, today actually.

J: Ok.

G: This story relates to something we were talking a few...a whi...a few weeks ago. Do you remember the discussion we had about the place in Austria that changed its name?

J: Yes, from...er...er...bleep to...er...Fugging.

G: To Fugging, I believe it’s called, yes. Um, so we...we’ve had something similar...um...similar controversy about names in England, actually.

J: In Brazil? Oh.

G: I don’t know if you’ve ever been to England but England’s got some very strange-named places.

J: I can imagine. But th...those names, they go back, I don’t know, a couple of decades or centuries, or however long.

G: Exactly. And then of course, back then, the world was more innocent and names had different meanings and, of course, nowadays there’s different connotations to some of these names.

J: Ok.

G: So, there’s a lady...um...have you ever been to Plymouth, in...in England?

J: No. No. The...there’s not like a rock, or something?

G: Plymouth...um...well, actually she...she lives in Plymouth Hoe.

J: Plymouth Hoe?

G: Hoe. H-O-E, yes. And she, this lady was part of...

J: She...she’s not a hoe, is she?

G: She’s actually not a hoe, no. I don’t believe. Not. And she was part of this group that were making hats, or something and, you know a...a little craft group and they like to share their things on Facebook. And suddenly she got a message from Facebook banning her for breach of community standards and harassment and bullying.

J: Really?

G: This lady who is just trying to make some hats and share them with her friend.

J: S...share her hoe hats!

G: And, of course, the problem was the name – the Plymouth Hoe, because hoe has other connotations.

J: Right. And how...how do they spell Hoe?

G: Um, H-O-E.

J: Ah, the same way. So...so...ju...ju...just explain to our listeners, if they are not familiar with the term hoe – what does hoe mean?

G: It is kind of a sort of rapper slang for prostitute, basically.

J: Right, kind of way to refer to a prostitute, yeah.

G: So, it’s not...it’s not word you wanna use in...in...in other contexts.

J: Right.

G: But in the context of a name, of course, it’s quite innocent. So, of course, Facebook were very apologetic about this, and they said, “No, no, there’s been a mistake.” Cos all of this stuff is done by algorithms.

J: Right.

G: It’s not...it’s not somebody who actually decides to...um...to ban the person.

J: W...was this before or after Facebook banned Donald Trump from Twitter – or...er...banned from Facebook?

G: This was round about the same time, actually. Possibly a little bit later. Probably about a week later.

J: Ok.

G: But...um...but, of course, there’s other places in England. As one...one very...um...um... entertaining article that came up points out, you know, we’ve got places like Devil’s Dyke. And there’s another place in Essex called Fingering Hoe.

J: Fingering Hoe?

G: And there’s a place up in Northumberland called Great Cockup, and another one called Little Cockup, and the list is endless. You could go on for hours, actually, but...um...

J: Well, you also have Middlesex, don’t you?

G: We have lots of sex, yes – Essex, Middlesex, Sussex...

J: I don’t...I don’t...yes, Sussex, Middlesex.

G: Yes.

J: They don’t have Supersex, do they, though?

G: Er, not that I’m aware of, for now. It’s a very...pretty...pretty...um...missionary mostly, in England. So, there you have it. That’s...um...the dangers of the name and whether you can keep your name or whether you need to change it as time goes on and, obviously, meanings change.

J: Yes, and...and definitely they change.

G: If you are interested, the original meaning of the word ‘hoe’ as written there. It’s an Anglo-Saxon word for a sloping ridge, shaped in a...like an inverted foot and heel.

J: Well, I used a hoe when I was little, but it was...it was kind of a rake that you used to go through the garden and...and op...open up a little furrow so you could plant your seeds.

G: Exactly. Yes, we used to have those too.

J: So, yes, there’s multiple hoes around us.

G: There’s a lot of hoes. A lot of dykes too. Devil’s Dyke.

J: Definitely a lot of dykes here in São Paulo. Ah, I like that story, that’s good.

G: So, we should move on, I think, at this point!

J: Yes.

G: Before I get into trouble again.

J: Have you ever heard of the new drug, Jenkem? That’s J-E-N-K-E-M, jenkem?

G: It rings a bell, but I, um, can’t remember what it is, no.

J: This is...this is a new thing that’s kind of going on in the United States. Erm, it seems that is kind of a spin-off of a similar drug that was found...that was found in Africa. Er, but what it is...is, there’s...there’s large groups of these...er...young people that are getting together at high school and...of course, they are trying to find cheaper ways of...of, let’s say, getting high and experimenting with drugs and stuff like that. And crack and cocaine is all too expensive. Marijuana doesn’t get it done. And so they are started on this jenkem stuff, here. It’s...er...it’s quite dangerous because it seems that jenkem is...er...partially made out of human waste, and what they do is...is they allow...

G: Eleph...dung gin! Elephant gin!

J: They...they allow that to ferment. So, I don’t...they...they put some additives in – they allow it to ferment. It kind of goes up into like a...they do this in a jar. And then it goes up into a little balloon, and then what...what the boys will do is they’ll inhale, let’s say, the...the gas that’s in that balloon. That’s...that’s what gives them this particular high.

G: My god. I hope it’s not methane. That would be pretty horrible!

J: Yeah. This has been reported on...this kind of started in...erm...in Florida and it seems that...that they s...they got this idea because there were some people in Zambia...er...they’re...they’re inhaling the gas from...fermented sewage.

G: Yes.

J: Ok. So, fermented sewage in Zambia somehow they gave those guys...

G: How can you ferment sewage???

J: I...I...I don’t even know but...that....that...well, the sewage, you know, when it goes underground, it releases some gases and the people will inhale this stuff. Anyway, the Americans got a hold of this and they...they decided to do something similar.

G: So, this is an official product, then, that is derived from sewage?

J: Yep. Er, this story was reported on by the Washington Post and there was also a...er...in the...the Col...Collier County Sheriff’s office – that’s the criminal intelligence bureau – they actually gave out a bulletin warning people about...er...using jenkem. And then they have a photo here and that’s...I’m kind of describing what I’m looking at in the photo.

G: So, is there a picture of the user actually inhaling the gas?

J: Th...there is. There is a picture. Lemme, let me just...er...fast-forward here to another little page here. There’s a...there’s a picture of a boy. He is 12 years old. And he’s got a...a pot of this...this jenkem...er...in his...erm...let’s say, in his lap. And you see him with a...with a straw and he’s inhaling it.

G: Good lord. So, nobody quite knows what’s in it, then?

J: No, it’s...

G: The chemical composition of this gas that’s emitted is yet to be analyzed, I guess?

J: Yeah, and they put it out in the sun and it ferments, and then it’s...it’s not healthy. Erm...

G: It sounds horrible.

J: Well, not only that, but...there...there are many problems with...with this...with this particular drug. And also one problem with the story is that it’s a complete hoax.

G: Ah.

J: It’s not even true at all.

G: Ah, ok.

J: Forget about jenkem. It doesn’t even exist. What I told you is a real example of, let’s say, fake news and how it sometime...somehow got popularized and people actually thought it w...that it was credible.

G: Ok.

J: And, what...so, what I just described, this was all part of...er...teenagers that got together and they started trolling about this incident – groups of teenagers and they started talking about it at their high school. The...some local parents picked this up from their...their...their children and they brought it to the police department. And the police department says, “I’ve never heard about this. We gotta get it out there.” They actually did bring out a bulletin warning people about this. The problem is that it was all fake. The Washington Post saw this and they published an article. So, it kind of...kind of...i...it...it’s a strange situation just to show how easy it is to publish all of this fake news.

G: So, it was all bunkum, not jenkem!

J: It was...

G: So, maybe that’s the idea? Maybe that’s where it got it’s name. Derived from bunkum.

J: Yeah, so...er...however the...the one sad thing is that actually the story about Zambia – what I told you – that is true. So, that’s the one true part of it. But it just goes kind of show how the internet can kind of get...get rolling with these things and then it all turns out to be false.

G: Although they are running the risk of wasting pe...police time with that one too, so...

J: With human waste, yes.

G: Yes, wasting with human waste. Well, that’s...that’s an interesting story. So, that...that just goes to show we can promote bunkum...

J: ...with jenkem!

G: And get Donald Trump promoted to president!

J: Oh. my god. Who knows where this goes?

G: Yes.  


End of part 1   

   

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G: So, today we are very, very happy to welcome back for the second time - Tales Rabelo, welcome!

J: Hoorah, Tales! Welcome!

T: Great. Great. Great. Always a pleasure to talk to you guys.

G: You are the first guest to return, actually, so thank you for that.

J: He is the first guest to return and he’s also our first masked guest.

G: Yes – masked gunman.

J: Yes, so I...

T: You should adapt to the new times, my friend.

J: It seems line – at least in the United States, I don’t know about Brazil – but in the United States it was a question of the rich were getting richer, and the poor got a lot poorer with the pandemic. Is that situation similar in Brazil or is it difficult to say about that?

T: Yeah, when you think about...think about...er...income, I think you’re right. Because assuming that most of the people that are suffering with the pandemic related to...to the difficult...er...difficulty to work, especially those guys in the services sector, they have lower income. And the wealthy part of the...of the workers, they have been able to work remotely, and to sustain their income and to keep their income, so...of course there was, working to the...looking to the...to the income side, the income reduced more significantly for those in the...in the lower part of the...of the table.

J: Of the economy.

T: Of the economy. In terms of income. In terms of wealth, of course those guys that have...er...equity, with the valuation of the...the houses, valuation of the stock market, and property, considering more broadly – the environment of very low interest rate(s), and what’s going on globally is providing an increase in...in the value of the...of the wealth.

J: Ok.

G: Actually, my...my question is related to that. I mean, when the p-poor people got the...er...extra payment, which sectors benefitted the most from the poor people having that payment?

T: Ah, it’s very clear. When you look to the data, it’s...it’s very clear that...er...household consumption of goods...er...increased very fast and some sectors are performing much better than before the pandemic. For example, er, building materials.

J: Right.

T: Er, a significant part of those receiving the relief...of...from the government, is using the proceeds to refurbishing (sic) their houses, and buying household appliances, so these sectors are performing better than before.

J: Right, so, anything related to construction is...is...received a boost.

T: Yes. They’re performing better.

J: Ok. What...what about agriculture? Because with the...with the, let’s say, the currency exchange rate, it seems like it’s much more...er...let’s say, viable to export your goods now...

T: Yeah.

J: ...than before.

T: Yes. In terms of agriculture, is a...is a place where Brazil has an extraordinary advantage versus other countries, due to the natural resources we have. And just to have a number that, for me, strikes me as an impressive number – if you compare the level of output in Brazil in 2020 versus 2010, in ten years the Brazilian economy grew only 2.4%. Only 2.4% in ten years.

J: Ok.

T: So, a lost decade.

G: Wow.

T: But when you look to the agricultural sector, the agricultural production increased by 34%.

J: 34%.

T: So, increased by a third. So, it’s a sector that always grows in Brazil, because it is very productive and is inserted in a global landscape.

G: That’s because of all the deforestation, isn’t it?

T: I don’t think so. I think that’s because the agriculture in Brazil, they have a natural advantage, and beyond that we have very...er...productive entrepreneurs. Of course, the high international prices is (sic) very important for that because at these prices the agricultural sector, especially...erm, meat, soya bean, corn, all the sectors in Brazil, they are quite...er...er...quite profitable. Is very stimulative prices for the production and, beyond that, we had...er...er...an environment of FX, foreign exchange depreciation, the Real is very, very undervalued and this undervaluation was not transmitted to costs – domestic costs, especially labor costs, as national inflation remained low.

G: So, why is that then, because with the low exchange rate, you’d expect some inflationary pressure, wouldn’t you?

T: Of course, the most related prices to the...to the FX, like...er...agricultural goods, imported goods – these prices are moving up. But the services inflation is not moving up, and a significant part of the costs are related to services. And as we are in an environment of very depressed economic...of depressed economic activity, the companies have not been able to transform these increasing output costs into prices, and so the margins of the companies have been squeezed. So, er, in an environment like that in Brazil, of very high unemployment rate, have (sic) been hard to transmit this...er...input prices growth to...to output prices. So, inflation have (sic) been contained.

J: Right.

T: Although that is a good point because inflation in the past in Brazil would be very hard to control in an environment of FX undervaluation like this.

G: Interesting.

J: So, er, let’s say, I had, I don’t know, I had some money that I wanted to invest. What would be a good sector to invest in? Should I continue to put money in construction?

T: I think that...er...most of...er...you should bet in sectors that will...er...enjoy, seize the opportunity of the vaccine recovery. For example, good companies of malls, good companies that provide services. Er, there is still...er...good companies of travel. When the virus is out, the virus is out, the people will want to travel, to make things that they did before. So, I would say that, for example, this...these prices are still a little bit depressed in the stock market, and you should bet on that.

J: Right. What about airlines? Would that be a good investment or a bad investment?

T: I think airlines it is hard to say because airlines is a business that was not being profitable before the pandemic. So, it’s hard to say if...

J: Probably the pandemic won’t help them to be even more profitable.

T: The pandemic killed the sector.

J: Yeah.

T: So, it is hard to say how they will...er...survive after.

G: But the low...low fuel costs must help them, at least?

T: Yeah. In Brazil we have few companies of that in the stock market. But I would say that well-run companies.

J: So, then, so, let’s say, in your estimate, th...there’s a chance that Bolsonaro will...will be re-elected?

T: For sure. I think he’s the favorite to win...

J: Ok.

T: ...as there is no other...there’s no clear signal that’s an option that’s not left-wing, extreme left wing candidate, like Lula. Or a Lula acolyte can be the contender.

G: As I always say, we need a...we need a passionate moderate to come forward, really, don’t we? And they are very rare, passionate moderates.

T: Yes. And the current environment is not conducive for moderate politicians triumph.

G: Just very quickly, the exchange rate – under pressure mainly because of the interest rates being so low. Do you think anything will change on that front this year?

T: I think you are perfectly correct. Really well informed. I think that the environment in Brazil of very low exchange rates has produced...er...unusual behavior of the...the FX rate, in terms...erm...saying better – the very low interest rates in the domestic market, has made the domestic FX...er...fixed-income market not attractive for investors, and it’s making...er...a lot of money outflow, and in this case the Brazilian Real is jeopardized.

G: Right.

T: I believe that what we see this year in the environment of good stock market, commodity prices up, and the Real weakening, does make...does not make any sense. It’s quite inflationary, can provide inflationary pressures. The Central Bank will need to act. And one of the main reasons behind the idea of raising rates this year is to contain inflation and inflation is been...has been built up due to this weakening Real in an environment that does not make any sense to Real to weaken. So, the interest rates is very low and should move up.

G: What’s your forecast for the interest rates for the end of the year?

T: I expect the rates to double from 2 to 4.

G: Ok, and inflation?

T: Er, inflation, assuming rates go up and we have a...a containment process of this FX a little bit close...but close to 5 percent...5 reais per dollar, inflation can reduce to 3.5 – something like that – because inflation can be much lower in the goods sector, where commodities prices, in reais, has increased a lot.

J: And what...what about the exchange rate? Do you think the...that the Real will...will value, will be worth more?

T: I think that in...in the scenario of no disruption in the fiscal accounts and with the interest rates being raised, like we commented before, I think the Real can be...can...can appreciate a bit. As we see around the world movement of weakening dollar, in an environment of gl...gl...good risk appetite, the economy recovering with less impact of COVID, Real can...can strengthen.

J: Ok.

G: Excellent.

J: Good.

G: Thank you very much for coming in, once again.

T: Thank you so much, my friends. It’s always a pleasure to talk about you. Next time I expect we talk for...to talk about other subjects, like football and everything.

J: Ok. Thank you Tales. Thank you so much.

G: Yes, we will measure your forecasts against reality later in the year.

T: Yes. It’s all dependent of many variables. We know that forecast exchange rate is not easy task.

J: Ok. Bye-bye.

T: Bye-bye. Ficou bom, hein?



End of part 2   

   

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G: So, Jay, I believe you are up for Guru.

J: Today it’s all about transition expressions – so, different transitions that...that...that are useful. I’m not going to get into, let’s say, definitions about everything and when to use, exactly, but I’m going to put them into large groups. So, what I propose is I will give a group of words and then you give me some kind of, let’s say, example about when we can use these – what kind of situations you could use those things. So, we’ll start of with a group of 4. We have ‘therefore’, ‘as a result’, ‘thus’ and ‘consequently’. How would you...

G: I call these ‘connectives of conclusion’.

J: Right, you’re...you’re thinking about some kind of logical conclusion or perhaps result?

G: Exactly.

J: Ok. Er, the next group, have two – ‘for example’ and ‘for instance’.

G: Alright. These are for giving examples!

J: Exactly. For example, they’re for examples. Yes. Ok. Everybody knows ‘for example’ but ‘for instance’ you might not be so familiar with.

G: And ‘for example’ we often write ‘e.g.’ don’t we.

J: Yes, exactly.

G: Which is Latin, but don’t ask me what it means.

J: I always understood it meant ‘example given’.

G: No, it’s a...it’s...er...Latin something like ergo something, I don’t know.

J: Ok. Ergo, I don’t know.

G: Ergo, I don’t know.

J: ‘In conclusion’ and ‘in summary’.

G: Um, these are conclusions. These are things that you are summarizing.

J: Or summaries, yes! Summarizing. Ok, here...here’s something that maybe a little bit not so clear. ‘In fact’ or ‘indeed’.

G: These are connectives of clarification.

J: Right.

G: A bit like ‘actually’. ‘Actually’ is like ‘in fact’ isn’t it?

J: Yeah. Or when you want to give emphasis to something.

G: Or could be for emphasis in the case of ‘indeed’, yes.

J: Right. Er, how about ‘in addition’, ‘moreover’ or ‘furthermore’?

G: These are connectives of addition, I generally call those.

J: Right. You’re giving extra information.

G: Extra information.

J: Er, let’s say...let’s say ‘Bob is tall. Er, in addition, he’s ugly and...er...very fat.”

G: Yes. We’ve got ‘furthermore’ in that group, too.

J: Ok? Then, here we have another group of four. ‘In contrast’, ‘on the other hand’, ‘nevertheless’, ‘nonetheless’ and ‘however’.

G: These are connectives of contrast.

J: Right. So, you’re giving, let’s say, you’re contrasting one situation with something else.

G: Yes. Things like ‘despite’, ‘although’ – all of those.

J: Right. There’s a bunch of those. And the last little group I have here – ‘fortunately’, ‘surprisingly’ or ‘interestingly’.

G: Hm. Um...

J: How would you...how would you ‘groupify’ those?

G: I...I don’t know if I’ve got a name for those, actually. What would you call them?

J: Well, I would...I would use these when you’re...when you’re giving something, let’s say, that you wouldn’t necessarily expect. Or something a little bit different or, let’s say...

G: It...it’s kind of a turning point again, isn’t it? Cos, you have a negative situation and then you’re turning it back to the positive side.

J: Yeah, it’s almost like a...like a...like a...a contrast.

G: It’s sort of a ‘reverse contrast’.

J: Yes. Anyway, so, those are...those are the...some of the simple groups. Of course, there are many, many more.

G: There are. And you will find them on our website, if you go to look.

J: Yes. So, th...therefore, go to our website!

G: And our website has a form. It’s www.thesambabuzz.com and you can just fill out the form and hit send and we will receive it.

J: Right. We’re also on Instagram. It’s #thesambabuzz everything together. Please go ahead and give us a like and subscribe. We are also on LinkedIn.

G: We’re on LinkedIn as well? Ok, great!

J: Ok. So, many platforms to reach out.

G: So, I guess we’ll see you next time!

J: Ok. Take care.

G: Bye-bye.


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