1. A Business and Political Perspective on Growth in Brazil and the United States Brazil Risk: Why and How to invest in the USA. May 7th, 2014 Dr. Zelia Cardoso de Mello

2. Brazil at the beginning of the XXI century Favorable international conditions with strong domestic fundamentals: Chinese growth. International liquidity. Domestic macro economic fundamentals. Automatic pilot; complacency was the norm.

4. Financial Crisis- impact on EM. Immediate impact due to the outflow of short term capital. Deterioration of terms of trade, exchange rate impact. Financing restriction in the capital markets. Most of the countries responded to the financial crisis with counter cyclical macro policies.

5. Enduring the crisis Counter cyclical fiscal and monetary policies Quick recovery in China due to the government stimulus Return of financing Brazil grew at almost 8% in 2010.

6. Other developments in the 2000’s turn to populist-leftist governments in several countries in Latin America Chaves, 1998 Kirchner’s in Argentina, 2003, 2007 Evo Morales in Bolivia, 2005 Lula, 2002,2006; Dilma, 2010 Lagos 1999, and Bachelet 2006 in Chile Raphael Correa in Ecuador, 2006;2009 Increase of the middle class Decrease in proportion of people in poverty Trade with China

7. US Economic Growth

8. Developments in the USA- Pos Crisis 2008 TARP Obama’s election Stimulus QE After 2010 a politically divided Congress European crisis

9. US and Brazil post 2008

10. Where we are – The good ( north) Significant improvement in the developed economies: US and Europe Improvement in peripheral economies: PIIGS Corporate profits will grow- stock prices will benefit- wealth effect still in place

11. Where we are – the bad ( south) Economic slowdown coming from EM: an uncertain China. Will it grow at 7% average or less? Perspective of less liquidity –long term rates Political unrests. Headwinds: geo political conflicts- Ukraine is a good example.

12. Brazil Slowdown in growth Deterioration of current account Deterioration of public finances Increase in inflation Loss of confidence and credibility

13. Why and How to invest in the USA Business environment Innovation US energy renaissance

14. www.zeliacardosodemello.org Target Management and Consulting zelcmello@gmail.com 917-9750125 Thank you!