Corruption Pervades Brazil’s Fragile Economy

Posted by: : Paul EbelingPosted on: April 12, 2015 Corruption Pervades Brazil's Fragile Economy
 

Corruption Pervades Brazil’s Fragile Economy

$PBR, $OIL

Brazil’s state Crude Oil giant Petrobras (NYSE:PBR) estimates it paid out some 6-B Reals (US$2-B) in illegal “commissions” as part of a corruption scheme that operated for years.

Regional daily Folha de Sao Paulo Friday reported that according to Petrobras sources, the sum represents 3% of all the contracts signed over the past 10 yrs by the Crude Oil firm, Brazil’s largest company.

The money, the daily said, was paid out to company executives and left-leaning political parties.

The corruption scheme, which is still being investigated, has hurt the company, which is expected to reflect the losses in its Y 2014 annual statement, to be issued later this month.

Petrobras’ CEO was forced to step down in the wake of the scandal and top executives at the firm have been arrested, as well as a dozen executives at construction firms that won lucrative contracts from the Crude Oil giant in return for kickbacks.

According to a list released by Brazil’s Supreme Court, some 50 former and serving politicians are believed to have benefited from the kickback scheme.

Three ex-Deputies were arrested Friday, including Andre Vargas of the ruling Workers’ Party (PT). Among the charges are fraud and money laundering.

Brazil’s President, Dilma Rousseff, whose popularity has been badly damaged by the huge government scandal, launched a war against corruption, saying that she would not hide the nation’s dirty laundry under the carpet.

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HeffX-LTN Analysis for PBR: Overall Short Intermediate Long
Neutral (0.20) Very Bullish (0.54) Neutral (0.23) Neutral (-0.17)

Have a terrific week.

HeffX-LTN

Paul Ebeling

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

Trade FX, Equities and Options with the World's Leading Platform Open an account here , call us at 305 4904 116, or email us to get started.

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