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IdentifierCreatedClassificationOrigin
08SAOPAULO375 2008-07-15 11:53:00 UNCLASSIFIED Consulate Sao Paulo
Cable title:  

MEDIA REACTION: GLOBAL ECONOMY: SUB-PRIME MORTGAGE CRISIS

Tags:   KMDR OPRC OIIP ETRD BR 
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VZCZCXYZ0003
OO RUEHWEB

DE RUEHSO #0375 1971153
ZNR UUUUU ZZH
O 151153Z JUL 08
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8388
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 9525
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8785
RUCPDOC/USDOC WASHDC 3131
					  UNCLAS SAO PAULO 000375 

SIPDIS

STATE INR/R/MR; IIP/R/MR; WHA/PD

DEPT PASS USTR

USDOC 4322/MAC/OLAC/JAFEE
E.O. 12958: N/A
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: GLOBAL ECONOMY: SUB-PRIME MORTGAGE CRISIS



1. Another Package

Editorial in liberal Folha de S. Paulo (7/15) says: "Frightened by
the galloping economic crisis, the Bush administration announced
another billion dollar package to help the financial crisis. ...With
another billion dollar contribution, the Bush government and the Fed
are trying to stem the contagious flow of the crisis. Judging by
the pessimistic reaction of the markets yesterday, other
considerable battles will come."




2. The Turbulence Continues

Editorial in center-right O Estado de S. Paulo (7/15) comments:
"Pressured by the mortgage crisis, the Fed slows down the fight
against inflation. ... The crisis was, in great part, facilitated by
the excess of liquidity permitted by the Fed, in its long process of
reducing interest rates. With this policy, the American Central Bank
allowed prices to increase. ...the Fed started to export inflation
to the rest of the world and became a threat to Latin America. In
fact, the fight against inflation will be much more difficult
without the participation of the world's most important central
bank. But, will the Fed be prepared soon to initiate a new phase of
higher interest rates? Unfortunately, no other central bank can keep
waiting for an answer. It is necessary to act, and in Brazil, the
effort for the adjustment has already started."
Story