Bell Curve Paradise

Loosely related to the Malthusian model- which has had its own ups and downs- the physical world's Standard Deviation Curve or "bell curve" construct of an improving-peaking-decadent cycle helps me think about the options. Looking forward to hearing which places in the world you think may be on the improving (up or left side of) The Curve. The obvious objection to the model is that the term "improving" is relative, subjective. Varies from individual to individual. Of course. But this doesn't change the basic premise that just because we ARE individuals, not herd animals- there is nothing in common. Everyone needs an individualized interpretation of a model that contributes to his personal and family development. There is no one size fits all formula. I think I'll copy Neil, in case of interest. He shows at least a cursory interest in the idea of living in a foreign clime. Something tells me it's not in the cards he holds- or rather wants to hold- but you never know.....

Despite diverse perceptions, I think there must be a number of models or frameworks on which to hang individual goals. I've thought a lot about this from living on 5 islands in Hawaii and owning land there- also in Costa Rica (both mountain and beach), Australia, all over California, etc.

An example of just one place that helped me focus on the cycle all places in the world, one way or the other, go through:

Margaret River, WA

When we moved from Rio 1995 it was clear how much individual perspective impacts on perceptions of the term "improvement". A strong contingent of surfies, mostly from over East, had migrated to "Margaret's" 20-25 years earlier, in the early 70's. Arriving, they discovered a wild and beautiful but economically depressed agricultural (mostly dairy) area and moribund logging industry past its prime in the growing, environmentally-regulated atmosphere. They also found the space and opportunity to make a New Life of their own. Quite different from the local multi generational farm households with which they eventually, after some hard fought battles, merged: Surfing and back to the land. A little pot growing and furniture and crafts helped pay the bills. There was tension as the so called "hippy" migrants (just a few were indeed hippies) moved in and occasionally got punched out at The Pub of a "Satiday Nite" by the sons of conservative local farmers. I fished a couple times with a local fishing legend-garmer, father of Kristian's best friend. Jim Neilson is a really great guy. Limited in his experience and outlook, but funny and surprisingly compassionate. He joked about punching surfer-"hippy" lights out in those long ago days when two cars on Main Street meant a "party" was in progress. Spread across 100km from one Cape to the other, the surfing/woodworking newcomers got together every few months for an open air potluck, music, dancing and to keep up the friendships which, to this day, continue to cohere their shared, 'migrant' histories.

Once, about 10 miles off the coast of Margaret River in a tiny boat, Jim- knowing I was the leader of the community association that held so much anti development power in those days- asked, "Bob, when you look along the coast, what do you see? See a lot of houses, buildings, etc, Bob?" (It was REAL hard to see very many houses, it's true.) I understood where he was coming from, immediately. "What you mean, Jim, is- what's the 'big deal'! Right?" "Right, Bob! What IS the big deal?" I said, "Tell you what, Jim. Let's grab a plane to California sometime. 10 miles off the coast, I reckon you'll see what the big deal IS!"

When we arrived, MR was just beginning an economic boom led by the vineyards which had moved in, mostly since the 80's. (The pioneering first one was in 1978) World class entertainment, hosted by one of the major vineyards once a year performed (Ray Charles, London Philhamonic, etc, etc). Galleries and coffee places popped up and the place had started to attract not only tourists from Perth and beyond, but retirees and well off professionals buying second homes. The economic spinnoffs, the rising real estate values, the 'growth'- all undeniable. The point is always- good and bad. Again, depends on perception.

But just as newly arrived "surfies" had once been confronted by an antagonistic, entrenched, farming community, they now found themselves resenting the arrival of the Next Wave: the "yuppies", the wine snobs, the high heel set, the metro crazies. The down home, rustic virtues they recognized within the farm economy when they came, and significantly altered as they merged- seemed to be slipping away. Effete coffee shops, prancing "Pethie" pooftas. Ugh.

That's when I arrived,.just as the wine and tourism movement began to take off. First thing I noticed: There were agricultural supply stores. To me it was important that the place was not just about surfing and wine. In the eyes of the surfies who had been there 20 years, what saved me, a Yank in a fancy car- were my surfing roots and connection with several of their leading lights (Ex: "Spider" Adrian, whom I'd spent some time with at the Salon Nautique in Paris, along with Maurice Cole, Victoria (and Tom Curren) guru shaper. This was a decade earlier when Spider was flogging the world's first feature length windsurfing movie.)

But I was caught between the surfers' last two decades of paradise, and the onslaught of wealth and a far broader, cosmopolitan and moneyed lifestyle. Surfers like Gary Keyes from New South Wales (see The Journal) explained their children would no longer be able to afford the land they had bought when they arrived in Margarets 20 years ago. The place was losing its rustic charm, being replaced by upscale this and that, and too many Perthies, including at their favorite breaks. A number of them were making plans to move out. South to Denmark, to Tassie (Tasmania) and even New Zealand's South Island.

But I saw LOTS of advantages to good, new restaurants, interesting visitors and increasingly, residents, from different countries, art galleries, chamber music, vertical tastings- you get the picture. I felt the essential character (hard to define, like "improvement") had not really changed. The money and hustle bustle were but a veneer over the still-pristine beauty of the place.

In other words, I saw the place "improving" through the addition of opportunities, both economic and cultural, to the already winning melange of farming community values, surfing, and an alternate culture lifestyle. Long time migrants did not agree. I saw their point, absolutely. I knew I'd have felt the same, had I arrived 20 years before to find "my" place in the world, only to see carpetbaggers invade and "destroy" its tranquil beauty.

In other words, I think some places in the world ARE 'improving', but this will always be in the eye of the beholder. Up to each of us to find our own particular combination. And hope to maintain the connection with not only our friends but with what has gone before.

Let me know what places you think are on the upswing? Be fun to test the model through someone else's eyes!

I agree. I've lived in a few, disparate places. Most seem more desperate now. We've both traveled widely. Most places you and I visited or lived in long ago have really not improved. Very much to the contrary. Population is key.

Among most places I know, all they really have in common is what my mother said to me 50 (FIFTY) years ago: "Bobby, there are just TOO MANY people!" If you had to pick out a single, salient factor that is ruining much of the world it is overpopulation. The balance between overpopulation and steady growth from a relatively low, undeveloped level seems key. A very difficult balance to find, it is.... The stagnation of a farm community that has been cradle to the grave essentially the same for the last 200 years lacks the dynamism, spontaneity and widespread sense of hope I crave.

So, I've always tried to find a place on the way up. Not on the way down, like 99% of the places we and our friends and families were born in, grew up in, vacationed at... Notice how often you hear complaints that these places are "just not the same"!"Everything has changed"....? Almost ALWAYS- definitely not for the better.

Places that at the time were wonderful that have degenerated are legion. I think of the Rio of the late 60's, when I returned between 1982-1995. And then... now. I'm sure you feel the same. Although the character of the marvelous city is essentially the same, the overpopulation and corruption and poverty-generated violence have taken some of the luster off a truly amazing, world-class spectacle of a city. Others I found wonderful that have gone steeply downhill include Lebanon, almost everywhere in Africa (Sudan, Kenya, Tanzania, Uganda, South Africa, etc), California, Hawaii (all islands maybe less Molokai), the list goes on FOREVER...

But there DO remain a few pockets, scattered around the world. A FEW places mathematical probability suggests are actually getting better. The future, at least the immediate one, looks bright. While the REST of the world looks increasingly moribund. Decadent. Lost. Decaying, even when it is (presumably)"developing". Shanghai may be one, for a city, that at least until lately has been on the upswing. Florianopolis seems to have improved by most accounts since I lived there the end of the 70's. And large parts of Western Europe have not changed all THAT much. Primarily, again, because of low population growth and entrenched (read: authentic) cultural traditions.

But those that have improved seem to have done so despite the population overload. Certainly not because of it. So the key, to me, is WHERE on the standard deviation or "bell curve" is a given locale at the moment? Going up? Peaked? On its way down? Everything in nature, and humanity is obviously part of nature, follows this model. Temporary adjustments mean they can slide down, or run up briefly. The bell curve is not a smooth line, it's jagged, Wall Street like. What counts is the general path.

In the rest of the world, what specific parts of it give you hope? I am very interested to hear what you think.

Brazil: Still 'Property Hotspot'?

Is Latin America really a property hotspot? - Times Online:

Times of London article on Latin American exposure to a severe worldwide financial crisis.
http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article5196893.ece

Unmentioned, traditional Brazilian investment patterns with the stockmarket (and around the world) down by 50%. Money goes where the returns are best>>>

* Stockmarket going up? Investment in stocks: DOWN.

* Stockmarket going down? Investment in property: UP.

An underperforming stockmarket is a good omen for property.

"Business As Usual"

Peninsula de Maraú- Building sites and bromeliads overlooking the beach.

Insulated from the U.S. credit crunch, Brazil powers ahead....

Monday, February 18, 2008 - Vol. 10, No. 41
Amid Global Credit Crunch, It’s “Business as Usual” in Brazil

By Mike Burnick, Senior Editor and Global Markets Analyst and editor of Market Shock Trader.


The U.S. credit crunch is far from over as vulture-investors, and Warren Buffett, now circle the troubled monoline insurers. These distressed insurers, including Ambac and MBIA, are the latest victims of the “repricing of risk” as the Oracle of Omaha calls it.

However, several thousand miles and worlds away from Wall Street, the credit crunch appears to be having little spillover impact on South America’s biggest economy.

“Brazil’s credit markets are shrugging off the effects of the U.S. sub-prime mortgage debacle and maintaining business largely as usual,” according to a recent story in the Financial Times.

This is a significant statement considering how much of a fiscal basket-case this country has been in the past. Brazil was once the poster-boy for financial miss-management. Spiraling inflation, massive debts and a chronic history of currency devaluation is Brazil’s legacy from the 1970s and 1980s. But not anymore.

From Fiscal Basket Case to Paragon –
in Under 20 Years

Today, Brazil looks like a paragon of fiscal virtue compared to the United States. Brazil has paid down its foreign debts significantly in recent years. Inflation is low and has been falling, while interest rates are steadily coming down too.

Even the Brazilian real is one of the world’s strongest currencies. It’s appreciated about 8% against the greenback over the past year. That’s quite a reversal of fortune for Brazil.

Credit Crunch: Don’t Blame It on Rio –
Where It’s Business as Usual

Business conditions in Brazil have slowed somewhat this year, as is the case around the world. However, “overall credit markets are calm.” For one thing, bank lending in Brazil continues at a steady pace, even while the big European and U.S. banks are scared to lend.

Brazil’s total “stock of credit” stands at just 35% of GDP. That means Brazil is much less leveraged than many other financial markets. Brazilian firms carry much lower debt loads than many foreign competitors too.

The reason Brazil appears relatively insulated from the Wall Street credit crunch offers more evidence of financial “decoupling” at work. That’s also the case in Asia right now. The main source of Brazilian credit has been a steady advance in the domestic savings rate. This has been driven by “investments in fixed income securities that are, in effect, closed to foreigners” due to taxation issues. Brazilian domestic savings are more than enough to take up the slack.

Brazil’s fast growing economy may slow somewhat this year, in the face of a global downshift. “But many companies are betting on the domestic market to make up the difference. For them, investment capital is still available.”

Perhaps the Brazilians would be willing to bail out MBIA...

There are other signs that Brazil has weathered the credit storm that has hammered many global markets. In fact, while the MSCI Emerging Market Index is down about 17% from its high last year, Brazil has declined just 8%. The blue-chip S&P 500 Index by contrast is still down about 13%.

Decoupling seems to be alive and well in South America’s largest and most vibrant economy. That’s a great indication of more potential gains ahead when global markets rebound. Brazil is certainly one market that I’ll be watching closely.

MIKE BURNICK, Senior Editor & Global Markets Analyst

US REIT Joins Parade

Península de Maraú- Cassange Beach looking north.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aqPBEU27Xyg0&refer=news

Hines, Calpers May Create $800 Million Brazil Fund by August
By Carla Simoes and Guillermo Parra-Bernal

Feb. 8 (Bloomberg) -- Hines, a U.S. real estate developer, and the California Public Employees' Retirement System may create an $800 million fund to buy properties in Brazil as demand for commercial space surges in Latin America's largest economy.

The fund would be the third that closely held, Houston- based Hines and Sacramento, California-based Calpers have created for Brazil. Some proceeds from the fund may be invested in low-income housing, Douglas Munro, chief executive of Hines do Brasil Empreendimentos, said in an interview yesterday. The fund may be ready by August, Munro said.

Hines is investing outside the U.S. to make up for a decline in the value of properties in the country, where the housing industry is in recession for the first time in 16 years and the dollar is losing ground against most major currencies. Hines may also invest in Angola and India, Munro said.

``So far, the performance of these Brazilian funds has been fabulous. We have obtained an excellent rate of return for our investors,'' Munro told Bloomberg Television in Sao Paulo. ``The drop in the dollar and a need to diversify portfolios has led our clients to look for new places'' like Brazil.

Foreign investment in new construction and real estate projects in Brazil jumped 35 percent to $2 billion last year, as the fastest expansion in three years raises demand for warehouses, manufacturing plants and distribution centers, Brazil's central bank reported last month. Record low interest rates and rising wages stoked record mortgage borrowing, and government guarantees for low-income homebuyers are making low cost homes attractive, Munro said.

Hines plans to expand from Brazil's biggest cities such as Sao Paulo and Rio de Janeiro to as many as 20 mid-sized cities like Santos, where Latin America's biggest port is located, in the next two to three years, Munro said.

To contact the reporter on this story: Carla Simoes in Sao Paulo atcsimoes1@bloomberg.net ; Guillermo Parra-Bernal in Sao Paulo atgparra@bloomberg.net .

US REIT's in Brazil

Península de Maraú- Sunset on Cassange Lake + canoe (photo, Alex Uchoa)

Tiresome. The unending media torrent on the exploding Brazilian real estate market. This one claims China and India are 'over'- leaving "R" (Russia) and "B" (Brazil) of the giant killing BRIC's.

Lots of reasons: Underlying strength in the economy, huge trade balance, healthy balance of payments, low inflation, strong currency and expanding liquidity and plummeting interest rates. So, how long can the Brazilian Boom last? Easy. Until the Next Big Thing (NBT). Which is, BTW?

The NY Post's take >>>

UA OGLING COMMERCIAL REAL ESTATE

http://www.nypost.com/seven/01062008/business/hot_brazilian_nabes_722413.htm

> Brazil's currency soared 20 percent in 2007, the fifth straight annual advance and the biggest since a 22 percent rally in 2003. The real gained the most against the dollar last year among the 16 most actively traded currencies. <

> With new commercial developments in the US reaping returns of just 3 percent to 8 percent, and with the weak dollar making Europe prohibitively expensive, the red-hot Brazilian economy attracted $3 billion in US investment cash last year - more than 20 times the amount invested there in 2006, said Fabio Maceira, head of Jones Lang LaSalle Brazil.<


HOT BRAZILIAN NABES
US OGLING COMMERCIAL REAL ESTATE
By CARA TABACHNICK

January 6, 2008 -- Forget about the girls from Ipanema, US commercial real estate kingpins are now ogling and waving fistfuls of dollars at Brazil's newest hot commodity: its underdeveloped retail sector.
With new commercial developments in the US reaping returns of just 3 percent to 8 percent, and with the weak dollar making Europe prohibitively expensive, the red-hot Brazilian economy attracted $3 billion in US investment cash last year - more than 20 times the amount invested there in 2006, said Fabio Maceira, head of Jones Lang LaSalle Brazil.
Returns on new commercial development in Brazil are running as high as 25 percent. And consider this about South America's largest economy:

* Its Bovespa stock market was up nearly 44 percent last year.
* There are only 350 shopping centers to serve Brazil's 180 million population - compared to the 49,000 shopping centers in the US to serve our 303.2 million folks.
* The Brazil economy is now the ninth-largest in the world.
"People already looked at India and China and are now looking for the next place," said Gary Limjuco, director of equity investments for Time Equities Inc., who has been tracking Brazil real estate investments over the past year.
With its explosive growth, Brazil is attracting investment cash from some of the biggest names in real estate. For example:

* Toronto-based Brookfield Asset Management purchased five upscale shopping malls in Sao Paulo and Rio de Janeiro for $965 million.
* New York developers Tishman Speyer sunk $500 million into office buildings, and Texas-based Hines Interests LP real estate firm recently purchased the BankBoston building, a Sao Paulo landmark, while its REIT recently snapped up a distribution facility for $53.7 million.
* Joining the mix are American Real Estate Investment Trusts (REITs), responding to the call for more retail space. Tennessee-based CBL Properties partnered with local Brazilian developers, Tenco, to build a shopping mall in the coastal city of Macaé.
"I am very bullish on the market," said Maceira. "We are seeing a very good moment in Brazil."
"There's a considerable amount of markets and dense enough population to support shopping centers in middle markets as well as in Rio and Sao Paulo," said CBL President Steve Lebovitz. "It makes us feel there is a very bright future in Brazil."
While the real estate gold rush is expected to continue, the dollar, which has been relatively strong against Brazil's real, is beginning to show some weakness.
"Investment flows, be it from trade or portfolio investments, will continue to support the real this year," Francisco Carvalho, head of currency trading at Liquidez Corretora DVTM, told Bloomberg.
Brazil's currency soared 20 percent in 2007, the fifth straight annual advance and the biggest since a 22 percent rally in 2003. The real gained the most against the dollar last year among the 16 most actively traded currencies.
/span>

Brazil Boom Now

Península de Maraú- Cassange Beach Afternoon

To paraphrase Rummy (Rumsfeld) there are things we know- and there are things we don't know. Increasingly, good and bad- my attitude is why waste time pursuing things we don't know?

Today's LA Times business article discusses a thing we DO know >>>>

http://www.latimes.com/business/la-fi-brazilecon31dec31,1,7294317,full.story?coll=la-headlines-business&ctrack=4&cset=true

GLOBAL CAPITAL
Brazil's now a Hot Commodity

From aviation to agriculture, it's an economy on the upswing
By Chris Kraul, Los Angeles Times Staff Writer
December 31, 2007

SAO JOSE DOS CAMPOS, BRAZIL -- For years, the joke in this country was that Brazil's economy was the economy of the future. The morose punch line, of course, was that the future never arrives.

But finally, it seems, the future is now.

Just peek into Embraer's Hangar F220 in this city north of the capital, Brasilia (Blogger note: Wrong. It is north of Sao Paulo) where this month the highflying commercial aircraft maker was putting finishing touches on a dozen gleaming planes being readied for delivery to airlines around the world, including Northwest, Air Canada, Tame of Ecuador and Virgin Australia.

Or visit the Odebrecht construction company, in Salvador in Brazil's northeast. It is managing billions of dollars worth of international public works projects, including its second $1-billion bridge over Venezuela's Orinoco River and a piece of the Panama Canal expansion.

Then there's Petrobras, the quasi-state oil company, whose engineers have launched deep-water drilling projects in places as far afield as Angola and close to home as Colombia and the Gulf of Mexico. Petrobras announced last month that it had discovered what may be the world's largest oil find in 25 years, in Brazil's offshore Tupi field. If that pans out, Tupi could propel Brazil into the ranks of significant oil exporters.

After several boom-and-bust cycles in recent decades, Brazil is in the midst of its best sustained economic growth since the 1970s. Optimism is high that the country may have turned the corner on the road to stability. And the emergence of companies like Embraer, Odebrecht and Petrobras on the world stage is one major factor in Brazil's improved fiscal health.

"The Brazilian economy is probably at its best moment in 25 years," said Paulo Levy, economist at a Rio de Janeiro-based think tank known by its Portuguese initials IPEA, citing four years of good economic growth.

Exports of manufactured goods and services have given Brazil's economy balance and helped foreign reserves climb to $167 billion, double the figure of September 2006. The country has paid down its debt, lowered interest rates and kept a lid on spending. Economic growth will come in at 5.3% this year, lower than the hemisphere's 5.7%, but quite a feat for a country that over the previous 10 years averaged only 2.5% annual expansion.

Foreign investors have taken notice, evidenced by the 44% increase in the Bovespa stock index this year, the fifth year of growth. That's a bigger percentage gain than in Russia, Chile or South Korea, even though Brazil's GDP growth this year will fall short of those countries. Brazilian companies have done a record 100 initial public stock offerings in 2007, five times the number of last year, with 70% of the money raised supplied by foreigners.

"That's good for Brazilian companies because it's a cheaper source of financing," said Reginaldo Takara, senior director in the Sao Paulo office of the Standard & Poor's credit rating agency. "Now they have partners instead of creditors."

Investors' improved perceptions of Brazil are also evident in the $30 billion that foreigners have plowed directly into Brazilian companies this year, a 60% increase over last year. The flood of foreign cash has helped spur the currency, the real, to double in value against the dollar in four years.

Also giving Brazil an enormous boost is the jump in commodity prices in recent years. The country is the world's leading exporter of chicken, coffee, sugar, soy, beef and orange juice.

Much of the foreign money now flowing into Brazil is coming from investors who expect the country's debt to receive an investment-grade rating from major firms such as Standard & Poor's over the next couple of years, said Gustavo Franco, a former head of Brazil's central bank and now an executive with Rio Bravo Financial Services in Sao Paulo, the country's financial center.

"If the experiences of Russia, Chile and Mexico are an indication, a ratings upgrade will produce a boost in equity prices, stock [price-to-earnings] multiples and earnings," Franco said. "That's what investors are anticipating."

Some institutional investors, such as pension funds, can only invest in countries with top debt ratings, Franco noted. If Brazil is able to secure that, it will drive demand and raise prices, he predicted.

About a quarter of Brazilian stock offerings this year have been launched by real estate investment companies targeting a housing deficit estimated at 7.5 million units by ABN Amro economist Zeina Latif in Sao Paulo. She expects a short-term boom in housing construction, fueled by long-term fixed-rate mortgage credit, which was not available in Brazil until recently.

The red-hot quality of Brazilian markets is all the more stunning considering the situation just five years ago. In 2002, leftist Workers Party leader Luiz Inacio Lula da Silva won the presidency by campaigning on promises to renationalize utilities that had been sold to the private sector. Investors fled, and stocks and the currency plummeted.

In something of a surprise, though, Lula has stuck with the fiscal reforms implemented by his predecessor, Fernando Henrique Cardoso. That, plus his "discipline" in limiting federal spending, Franco said, are big factors behind the current economic boom.

"Lula is a converted neoliberal," Franco said.

At the same time, welfare programs for the poor and elderly that give monthly handouts to one-third of the population have reduced the extreme polarization of wage distribution and helped turbocharge consumer spending, now growing at 15% a year, said Ana Carla Costa, an economist at Sao Paulo-based Tendencias consultants.

Wages are up and unemployment is down. Another encouraging sign for investors has been the rapid expansion of credit and banking activity. The number of bank accounts has grown 50% since 2001, while bank deposits and credit cards have doubled, said Nicola Tingas, the chief economist of the Brazilian Federation of Banks.

The value of outstanding loans is growing 20% annually. Analysts attribute the expansion to tougher bankruptcy laws passed two years ago that allow lenders to tap into borrowers' wages for repayment.

Of course, Brazil still faces serious challenges that could take the wind out of its economic sails. Lula has invested little in infrastructure, and Sao Paulo economist Roberto Troster said that was causing the nation to slip in world competitiveness.

Roads and ports are overloaded. Electricity demand is growing so fast -- 6% annually nationwide -- that power may be rationed as soon as next year if there is a cutoff of gas from Bolivia, which supplies half of Brazil's needs, or inadequate rainfall reduces hydropower output, said Adriano Pires, who heads a Rio think tank that studies infrastructure.

Taxes are 36% of gross national product, among the highest in the world, and bank federation economist Tingas said Brazilians receive little for what they pay. "You pay twice as much and you get nothing in return," he said.

A deep U.S. or global economic downturn would be damaging to Brazil's economy. For one thing, it would damp demand for its commodities, which account for 53% of its exports. Economist Troster said it was too early to declare that Brazil's economy had diversified enough and fundamentally changed. "We're not turning a corner, we're repeating a cycle," he said

At Embraer, management is less concerned about macroeconomics than maintaining a competitive edge and seeking out new market niches in an environment made more difficult by Brazil's appreciating currency.

It admits to growing pains such as difficulty finding qualified technical staff.

Booming demand for its 70- and 100-seat jets spurred the company to add a staggering 6,000 employees to its workforce this year. The company used to import foreign engineers to fill slots. Now it trains up to 100 engineers a year at its own master's-level, on-site engineering school.

After exploiting the mid-sized jetliner market over the last decade, the company believes it has found another niche in executive jets. Next year will roll out three private luxury models targeting the United States as well as booming emerging markets, such as Russia and the Middle East.

Such worries weren't even on Embraer's radar screen 15 years ago, when the company was primarily making propeller planes for the domestic market. Now, Embraer says it expects to soon become the third-largest commercial jet maker after Boeing and Airbus, passing Canada's Bombardier.

"Brazilian companies are starting to become global players," said Horacio Forjaz, the company's vice president. "We're in a virtuous cycle."

chris.kraul@latimes.com