O Rio de Janerio

I am spending about five weeks in Rio de Janerio. This is my fourth stay in the last four years, totaling about 15 months. My Portuguese is now strong enough that I have little trouble viewing Globo business news. There are lots of stories about excessive use of installment and credit card debt here. The message is that a bunch of debt slaves are in the offering, and western banks have been involved.   From FT:

• Average rate of interest on consumer loans 47%, up from 41% in 2010
• Consumer debt service burden was 24 per cent of disposable income in 2010, slated to rise to 28 per cent in 2011. This compares with 16% for an “overburdened” US consumer and a mid-single digit reading for other emerging markets such as China and India.
• Debt service burden for the so-called “middle class” in Brazil has now breached 50% of disposable income
• Delinquencies in Brazil (defaults in excess of 15 days) have begun to move up rapidly, from 7.8 per cent to 9.1 per cent of total loans between December 2010 and May 2011.
• Delinquencies are now rising at a very hectic rate. They have risen at 23 per cent in the first five months of this year in absolute terms or at an annualised rate of 55 per cent.
• Normally credit indicators cyclically lag the economic cycle. When they begin to deteriorate before any economic weakness it usually represents a structural problem relating to underlying cash flow or underwriting weakness in the quality of credit – Brazil has both problems.

There has been a real estate boom, and it is much more expensive (in part because of a weak USD) than in the past.   Certain areas of Rio have been gentrified, or made safer. Two years ago when I was at the Arcos in Lapa it was dark, dirty and a haven for vagabundos. Now it is lit up, lots of people out,  and at midnight I spotted eight squad cars in a two square block area and no sign of vagabundos.  I spoke with a bar owner who just gushed about the improvement in public safety. I am a little skeptical, but conditions just seem better to my eye.

There are Occupy protests going on here as well, mostly centered on public corruption. Unlike the US, the Brazilian press is active in reporting corruption stories.   I have lived so long in the corportist captured US, that it is a breath of fresh air to at least witness some real social democracy in action. Brazil is open and introspective about it's problems.

Also unlike the crap that passes as film in the US, Brazil is producing films such as Tropa de Elite 2, O Inimigo Agora e Outro. This film deals with social issues such as the favelas (slums), traficantes (drug traffic),  milicias (corrupt police operating as Mafiaso in favelas) and government officials in bed with these elements. Besides being entertaining, this film was incredibly intelligent and I would highly recommend it.  There is now a new trailer with English subtitles and talk about an Oscar nomination so it looks like a big US push is on and the DVD of this film will soon be available with English subtitles. When it comes out I will be curious if it gets much attention in the US.