Brazil’s presidential election

Winning hearts and likes

Social media will play a big part in this year’s campaign

Mar 15th 2014

IN JUNE Brazil’s elites received a rude introduction to the power of social media. Protests, many convened via Facebook, saw millions take to the streets to air disaffection with politicians. Those same politicians now want to harness social networks for their election campaigns.

Just before Dilma Rousseff was elected president in 2010, 6m Brazilians used Facebook at least once a month. As they gear up for a presidential poll in October, 83m do. Only the United States and India have bigger Facebook populations. One Brazilian in ten tweets; one in five uses Whatsapp—part messaging service, part social network. Cyberspace is seen as a crucial battleground for the election, even before campaigning officially starts on July 6th.

In September, shortly after the protests petered out, Ms Rousseff reactivated her Twitter account, dormant since the 2010 election. She has also joined Instagram and Vine, two image-sharing sites, and revamped her Facebook profile. Last month Ms Rousseff’s Workers’ Party (PT) held its first workshop for activists on how best to use social networks. It plans 13 more in the coming months.

The opposition is pinning even more hope on social media, in large part because the president is likely to dominate the traditional sort. During the campaign free television time is divvied up using a complex formula which takes into account the size of electoral alliances—and tends to favour the incumbent. Despite threats by the PT’s junior partner to dump Ms Rousseff—and take its airtime with itmost pundits predict the coalition will pull through. That would leave the president with around half of the 25-minute television slots; the other candidates would split the rest.

Small wonder, then, that Ms Rousseff’s likeliest rivals have been busy making Facebook friends. Aécio Neves, a senator from Minas Gerais state and leader of the centre-right Party of Brazilian Social Democracy (PSDB), and Eduardo Campos, governor of Pernambuco and head of the centrist Brazilian Socialist Party (PSB), have so far notched up many more likes” than the president (see chart). The most popular of all is Marina Silva, a former environment minister and Mr Campos’s probable running mate. All are active on other social networks, too.

They need to be. Mr Neves and Mr Campos in particular are little known outside their home states. One recent poll of voting intentions puts them at 17% and 12%, respectively, to Ms Rousseff’s 47%. But things could change rapidly. The president’s approval ratings fell sharply, from around 77% to 45%, in the aftermath of the June protests; they have recovered a bit since, but may dip again if more protests erupt during the football World Cup.

At MVL, a digital consultancy in São Paulo that works with Ms Silva, three analysts beaver away, compiling daily reports of her Facebook likes, Twitter mentions and so on. Relevant data are fed into a repository of over 1m e-mails, profiles and handles (usernames) that let Ms Silva reach an estimated 12.5m potential voters, nearly a tenth of the electorate.

It helps to pick the right platform for the right audience. Trying to talk to everyone everywhere is a waste of time,” explains Caio Costa of MVL. In Ms Silva’s 2010 presidential bid, Orkut (now much-diminished but with 26m users at the time) was reserved for Ms Silva’s fellow evangelicals; Facebook for women and disgruntled PT supporters; Google+ for opinion-makers. That helped propel Ms Silva from a rank outsider to 19.3% of the vote.

Mr Neves and Mr Campos will be hoping to repeat the trick and then some. Youngsters are a big target. Nearly 80% of Brazilians aged 16 (the legal voting age) to 25 use the internet at least once a week, well above the national average of 47%. Nearly half go online every day. At 18 voting becomes obligatory, so the candidates’ task is less to get out the vote than ensure the voters tick the right box, says Alexandre Bourgeois, Mr Neves’s social-media wonk.

With that in mind, Mr Bourgeois has dispatched scouts to São Paulo’s poor periphery to identify teenage movers-and-shakers, some with hundreds of thousands of Facebook followers. On February 24th the PSB invited one social-media starlet to a party meeting to discuss the lack of public spaces for teenagers to congregate.

The social networks offer counsel on how to “do an Obama”, in the words of Emmanuel Evita of Twitter, referring to Barack Obama’s astute use of social media in the 2008 presidential race in the United States. In the past few months the microblogging platform and Facebook have both organised tutorials for politicians.

All stress interaction. Reader comments on Mr Campos’s Facebook page rarely go unanswered, for example. Mr Neves has room for improvement, however. He seldom responds to his Facebook visitors; his 28,800 followers on Twitter have yet to see a single tweet. Xico Graziano, his head of internet strategy, insists everything is in place: “We are waiting for an opportune moment to engage.” A series of video clips designed to bolster his profile, including one of Mr Neves riding a motorbike along Brazil’s coast, will hit YouTube this month.

To have greatest effect, however, the candidates must also do well in the battle of television, watched by 65% of Brazilians every day of their lives. The June protests spread in a roundabout way, notes Juliano Spyer, who studies social-media habits in Bahia, in the country’s north-east. The news reached his poor but internet-connected town of 15,000 via television first. Only then was it picked up on “localsocial networks, prompting protests. For the opposition to have a chance in October’s poll, it has to make every screen count.

Heard on the Street

Talk Looks Cheap for Pricey Euro

By Richard Barley

March 14, 2014 9:29 a.m. ET

Mario Draghi might struggle to pull off the same trick twice.

In July 2012, verbal intervention by the European Central Bank president—his now-famous pledge to do "whatever it takes"proved enough to halt the euro-zone debt crisis in its tracks. But it also set off a steady rally in the euro, which has risen around 15% against the dollar and 11% on a trade-weighted basis since then.

The euro's rise is now causing a headache for the ECB, because it risks pushing down inflation even further from its current low level of 0.8%. So Mr. Draghi, along with other ECB policy makers, is weighing in again: He said Thursday the euro had had a "significant" impact on inflation and was becoming "increasingly relevant" in assessing the outlook—a clear shot across the market's bows.

Mr. Draghi's comments had an immediate impact, pushing the euro around half a cent lower against the dollar, taking it off its recent highs approaching $1.40. But the euro rose again Friday morning. It is supported by a range of factors: perceptions of the ECB's stance, the euro zone's current-account surplus, ongoing flows into European assets, and the fact that the decline in inflation has pushed euro-zone real interest rates higher relative to those elsewhere, particularly in the U.S. While verbal intervention may have a short-term impact, it seems unlikely to produce a clear shift lower in the euro that might ease some of the strains facing the currency bloc.

In 2012, Mr. Draghi was able to follow up his words with the introduction of a mechanism for preventing speculative attacks on euro-zone government bonds. Now, the problem Mr. Draghi faces is that the policy decisions that would clearly unlock a durably lower euro—a negative deposit rate on cash held at the ECB, or quantitative easing—are highly controversial and may carry negative side-effects.

In the absence of ECB policy actions, the decisive force in pushing the euro lower likely lies in the hands of other central banks, in particular the U.S. Federal Reserve. Better U.S. data and a sense that the Fed wouldn't only continue cutting back its bond purchases but might start to shift toward discussing rate increases would turn the tide and boost the dollar. If U.S. short-term real rates rise by 0.25 point, Credit Suisse estimates that would unwind around a quarter of the support given to the euro against the dollar by rate differentials.

If the U.S. recovery picks up, Mr. Draghi's words might be enough: the euro should decline. But if it continues to climb—with $1.43-$1.45 viewed as the danger zoneMr. Draghi may yet have to back words with deeds.

Copyright 2013 Dow Jones & Company, Inc. All Rights Reserved

A Golden Rocket - Best of the Breed

March 14, 2014

Gold and gold stocks have been stabilizing for months and have been quietly rising. Many gold stocks are up 30% even 50% in the past three months. The $HUI AMEX Gold Bugs Index is up over 30% from the lows.

If you think you have missed most of the move already you are wrong. The truth is most of the biggest rallies in stocks take place after a basing pattern with 30-50% or more has formed. This is signaling massive accumulation in gold stocks and its happening right now by the institutions.

So in this exclusive report I want to share one golden rocket stock pick which I feel has huge upside potential "IF" the precious metals market and miners can breakout of this stage 1 pattern it has formed.

One thing that excites me is about precious metals and gold stocks is the fact that we have heard nothing about gold, silver or mining stocks in the media for months... almost like the big institutions have told the media to avoid putting the spot light on it until they accumulate all they can in terms of physical bullion and stock shares.

This is the same for a few other sectors I have been watching build massive stage 1 bases in over the past few months and will be investing and actively trading them also once they break out of the basing stage.

Gold Stock Trading & Investing Success Formula

1. KISS - Keep It Simple Stupid! - Non one likes or follows complicated trading strategies

2. Understand and know how to identify the four market stages  

3. Know why and how stages must be traded for timing your entry, profit taking and exits.

4. Scan the market for the top performing sectors and focus on stocks/ETFs within those sectors.

5. Review all stocks and funds to meet setup criteria and trade only the best looking charts primed to start a new bull market (low overhead resistance nearby, strong relative strength, strong volume on breakout, 30 week SMA moving up etc..) 

6. Sit back, watch and monitor position for possible change in the stage, to adjust stops and identify profit taking levels.

Golden Rock Stock Pick

The chart below is top quality gold stock which has all the characteristics of a big winner. Just to be clear, I normally do not mention individual stocks within public reports. I am not compensated in any way to post this report. This is nothing more than my technical outlook on a stock and not investment advice.

Gold Forecast - Gold Stock Picks

Golden Rocket Conclusion:

While it still me be a little early for precious metals to bottom, it looks as though the stage (pardon the pun) has been set for a precious metals bull market to start. As they say, there is always a bull market somewhere... the key is finding it and taking the proper action.

Chris Vermeulen