Brazil Refuses To Buy European Bonds, Dashing Hopes For A BRIC-based European Rescue

Wednesday, October 26, 2011
By Paul Martin

by Tyler Durden
ZeroHedge.com

About a year ago, we speculated that as part of the ongoing currency warfare between Brazil and the “developed” world, its finance minister Guido Mantega would keep his trade surplus trump card until the moment of biggest impact. That moment has come, after the financial head (with the Playboy-posing daughter) just told Europe to take a hike. “I believe that European countries do not need funds from Brazil to buy bonds. Brazil is not considering it,” Mantega told reporters in Brasilia. “They have to find solutions to the European problems within Europe.” And with Brazil out, it is certain that China will not step up over fears of appearing weak and needing to provide vendor financing to its biggest export partner. Unfortunately for Europe this means that at least one component of the revised SPIV: that which foresees public investment from third parties into the EFSF (a new twist proposed only last week), can now be safely forgotten, bringing us back to page one and the entire 5x levered CDO structure which as has been explained numerous times, is Dead on Arrival. There is, however, one loophole. “Mantega said Brazil would be willing to provide financial help via the International Monetary Fund.”

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