Bolsonaro, Guedes, Lira and the Liar Pastor at Petrobras – 10/14/2021 – Marcos de Vasconcellos

In two days, three major authorities of the Republic spoke of privatizing Petrobras: President Jair Bolsonaro, former super-minister (now minister) Paulo Guedes and the president of the Chamber of Deputies, Arthur Lira.

In normal times, the news would be enough to move the market. This Thursday (14), however, the roles of the oil company (PETR4) went sideways, as they say. They rose something of 0.17%. The Ibovespa, the stock exchange’s main index, dropped 0.24%.

It’s easy to see that investors don’t take faith in what the three say. The lack of climate to discuss the matter in Congress is obvious.

The governing team continues to feed itself almost exclusively on an endless electoral campaign.

Bolsonaro is not the first to govern with reelection in mind, of course, but he had the power to be the last in his hands. While campaigning, he sees his credibility among market players waning.

Campaigns live on statements, not facts. Extending their period with an eye on the next dispute is taking away any confidence from the big investors that there is a project to be carried out in this developing country called Brazil.

The departure of Salim Mattar, former secretary of Privatization, from the government just over a year ago, exposed how the privatization plans presented by the government were pure fantasy.

When he took office as Minister of Economy, the then Ipiranga post, Paulo Ricardo Nunes Guedes, announced that he would raise R$1.25 trillion from privatizations. Days, months and years passed. References to the numbers disappeared from official communications.

To try to cheer up the group that believed in numerology, from time to time the Ministry of Economy publishes a list of companies to be privatized, with deadlines and all.

At the end of last year, they announced that by the end of 2021 nine state-owned companies would be in the hands of the private sector, including Correios and Eletrobras. The year ends in a month and a half.

The market’s lack of reaction to the speeches by Bolsonaro, Guedes and Lira regarding the privatization of Petrobras recalls the fable of Pastor Liar eo Lobo, by Esopo.

From yelling “wolf!” just to get the peasants’ attention, the shepherd lost credibility and, in the end, watched his sheep being devoured, as no one else came to his rescue.

Without credibility in global markets, there is no Selic increase capable of attracting foreign capital. And the chances of there being a new event like the pandemic to blame are (thankfully) extremely low.

For those looking for opportunities in the crisis, the rise in interest rates can bring with it a batch of good fixed-income securities. As money in banks becomes “more expensive”, the trend is for more companies to issue bonds, such as debentures, CRIs and CRAs, in order to make their projects viable. And pay well for it.

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