VZCZCXYZ0003
OO RUEHWEB

DE RUEHSO #0375 1971153
ZNR UUUUU ZZH
O 151153Z JUL 08
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8388
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 9525
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8785
RUCPDOC/USDOC WASHDC 3131

UNCLAS SAO PAULO 000375 
 
SIPDIS 
 
STATE INR/R/MR; IIP/R/MR; WHA/PD 
 
DEPT PASS USTR 
 
USDOC 4322/MAC/OLAC/JAFEE 
E.O. 12958: N/A 
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: GLOBAL ECONOMY: SUB-PRIME MORTGAGE CRISIS 
 
¶1. Another Package 
 
Editorial in liberal Folha de S. Paulo (7/15) says: "Frightened by 
the galloping economic crisis, the Bush administration announced 
another billion dollar package to help the financial crisis. ...With 
another billion dollar contribution, the Bush government and the Fed 
are trying to stem the contagious flow of the crisis.  Judging by 
the pessimistic reaction of the markets yesterday, other 
considerable battles will come." 
 
 
¶2. The Turbulence Continues 
 
Editorial in center-right O Estado de S. Paulo (7/15) comments: 
"Pressured by the mortgage crisis, the Fed slows down the fight 
against inflation. ... The crisis was, in great part, facilitated by 
the excess of liquidity permitted by the Fed, in its long process of 
reducing interest rates. With this policy, the American Central Bank 
allowed prices to increase.  ...the Fed started to export inflation 
to the rest of the world and became a threat to Latin America.  In 
fact, the fight against inflation will be much more difficult 
without the participation of the world's most important central 
bank.  But, will the Fed be prepared soon to initiate a new phase of 
higher interest rates? Unfortunately, no other central bank can keep 
waiting for an answer.  It is necessary to act, and in Brazil, the 
effort for the adjustment has already started." 
Story