There’s another early evening thunderstorm in progress right now. The air is cooling off nicely and Monica just put coffee on the table – mmmmmm. I’ve been fairly busy the last couple days, but not doing anything that anyone else might think too interesting. I have made a number of observations about this area that I thought that I would share here.
What’s up with the Banks Here??
I was in a bank today. I had some time to kill while my honey was taking care of some business, so I started reading one of those standing signs covered with very small print. It listed all of the various fees that the bank collects for things as well as the interest rates. I couldn’t find deposit interest rates on that sign, but the credit card interest rate was something approaching 40% APR. That’s over 3% per month! If you want to finance a new car (minimum 20% down) you’re going to pay over 35% APR!! (32.6% plus R$863 in fees) I just double-checked those car numbers from the Banco Itau web site.
Itau is a privately owned bank. I also checked their web site to see what I would get for a R$5000 poupança (savings) deposit for one year. The answer was 7.99 percent. So let’s look at the spread – 32.6% minus 8 is 24.6%. A bank here seems like a license to print money!! There were a bucket of other fees attached to banking on that poster. So, if the banks are so darn profitable, why can’t we visit a teller without standing in line for 15 minutes? Any bank will have a line painted on the floor that doubles back on itself two or three times in front of the three or so tellers.
Okay, the largest banks here are owned by the goverment – Banco do Brasil and Caixa Economica, for example. So, if you want to buy a car, you’re going to pay twice what it’s worth because of taxes and then when you go to finance it, it’s going to cost you at least twice as much in interest (maybe three times) as you would pay in the US. This interest llikely goes to a government-owned bank – the same government that jacked up the price of the car. How can people survive like this? I am driving an almost new car – it’s a Celta that I rented from Budget for the month. It had about
4000 km on it when I got it. It doesn’t have power steering, ABS, air bags, or even a decent radio. It has a one-liter engine and the A/C system blows cool air, not cold. Oh, and the headlights stopped working, but I think that’s a problem limited to just my car at the present time. Price for a new one? R$28,000 or so – base Celta with fabric seats and A/C. That’s about $12k US right now. It is about as plain a car as one could imagine. You have to crank your windows and the weak interior light only comes on with the driver’s door. Without looking hard, you could get a new Nissan Versa for about the same money near where I live in the US. That includes an automatic transmission (can’t get that on a Celta at any price) and A/C, ABS brakes and a bunch of airbags. I feel sorry for the folks that live here and have to deal with this. Nicer cars are available here in Brasil, but at double the price…..
The shame is that people here really love their cars. This afternoon, I took a walk and passed a lovingly-restored Ford Model T parked at the curb in Vila Mury. He passed me later and even tooted his aaooga horn at Billy and I. How cool! On Saturday mornings, almost everyone is out washing and polishing their cars. It’s a shame that cars are so expensive and that to finance them, you’re going to have to pay through the nose. Seems unfair to me.
Traveling Street Market
One way that folks can cut some costs is to buy stuff at the street market. The market is very organized and travels to a different site every day of the week. It is in Retiro (easy walking distance) on Tuesdays. Vendors arrive early in the morning to set up their stalls and they remain there until mid-afternoon. The vendors are arranged in areas – the photo to the left shows the clothing area. There are areas that sell meat, fresh produce, spices, hardware and kitchen stuff etc. This is not a swap meet – the stuff is new, and the people that sell there are professionals. Many stores accept credit cards. A lot of the clothing stalls seemed
to be selling the same sort of stuff, and the prices really didn’t seem to vary too much. It’s also notable that most of the clothing stores had booths in the back ingeniously made from blue plastic tarps that allowed enough privacy for one to try stuff on. Pretty cool. At the end of the day, everyone packs their stuff up, moves it onto trucks and they head for the next part of town. These pictures were taken in Conforto – we had to drive there because we wanted to look for some stuff and didn’t want to wait for Tuesday. The folks at the street market don’t have a lot of overhead (most of them seem to be run by one or two people), so they can sell stuff at lower prices than you would pay in a store somewhere else. It’s a way to save money.
Could you imagine what would happen to the US economy if interest rates went up to Brasil’s levels? Cars would become unaffordable, mortgages would disappear and any sales that depended on credit would become much more expensive. Revenue to the government would dry up as the paralyzed businesses laid people off and more folks had less money to spend. Could you imagine what the economy of this country would be like if they had a banking system like the one that we’re blessed with in the US? The government is letting their short-term revenue needs choke off their economy.
Silly Law of the Week
Did you know that Brasil has one of the toughest drunken driving laws in the world? A BAC of 0.02 means that you’re drunk (4x as tough as the law in the US). Huh? Is there any medical justification for that number? According to the linked article, the police only have 13 Breathalyzers in all of Rio de Janeiro state.
D’oh
News:
A democratic congressman from California promises quick action on climate change. Yes indeed, folks. We are going to have big price increases on anything to do with energy use in order to pay mandatory “climate change” taxes to the government. What’s driving this? Is the government really worried about the now all-but-discredited idea of global warming? Everyone knows it is just a money and power grab supported by those who want government to have more control (read power) over our lives. It’s all about the tax money folks. Those of you that voted these idiots into power hoping for “change” are going to get all of the change that you can handle. Has your electricity bill gone up lately? Mine has, too. Wait until we have to pay the “climate change” tax to the government for the energy that we use. Right now, my home’s heater is likely running 24 hrs a day dealing with the 10F temperatures (almost record low temps – where’s the global warming?). If we had the legislation that the dems are proposing, that natural gas that I need to keep my house from freezing would cost much more. Next year it might, if they get their way. Shameless…..
Biased news coverage of Israel’s defensive war against the murdering terrorists militants in Gaza continues (did you notice that all of those poor, crying people in the propaganda news pictures are always looking directly at the camera?) You can find some interesting stuff on the ‘net about what’s happening, though. Joe the Plumber is in Israel doing interviews for PJTV. Check it out if you can. As for me, as long as missles keep being shot into the Isreali neighborhoods, they have every right to do what it takes to stop it. Is it a disproportionate response? I don’t think so – they’re still sending shooting missles at Israeli schoolyards.
Also, God is alive and well, and HE can be found occasionally in the cockpits of US airliners. Awesome…
all for now,
Greg
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