Media Reaction Sao Paulo; March 14- 2009

UNCLAS SAO PAULO 000146 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 XM XR XF BR SUBJECT: Media Reaction Sao Paulo; March 14- 2009 Global Economy: Financial market crisis; Sao Paulo March 14, 2009 Title-"Thinking on the unthinkable" Op-ed in liberal Folha de S. Paulo (3-14) by Clovis Rossi states: "...estimates show that two thirds of the roughly US$2 trillion of China's reserves are in U.S. assets, especially Treasuries. It is natural, therefore, that they [China] are worried.... Since the aggravation of the global crisis, in the last quarter of last year, the word default began to be seen, initially timidly, in association to the U.S.....the fact is that [China's prime minister] Wen Jiabao said that China's first priority is to defend its own interests, even if the other eye is on international financial stability, things that are 'interrelated'. Is this a gesture in the sense that China may stop financing the U.S.? If this is the case, everyone will lose." Title- "Troubled government" Editorial in center-right O Estado de S. Paulo (3-14) says: "The summer comes to an end....and the government is still troubled, without knowing how to face a crisis much bigger than the one President Luiz Inacio Lula da Silva wanted to acknowledge until shortly ago....There is no way to deny the extension of the crisis. The [Brazilian] economy contracted in the fourth quarter.....President Lula does not know how to face Brazil's problems but has many ideas of how to fix the U.S. economy and how to put international finance back in order again.....Brazil's situation will be better, of course, if the global economy bounces back, but there is no sense in waiting for this change. The global crisis is the biggest challenge, but it does not excuse the Brazilian government's lack of action." WHITE