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THE CONFIDENCE OF INVESTORS. HE COULDN'T PASS THE THINGS THAT NEEDED TO BE PASSED IN ORDER TO AVOID THE COUNTRY LOSING ITS RATING. >> I THINK THERE IS A BIGGER ISSUE DOWN THERE. 62.5% OF THEIR GDP IS CONSUMER SPENDING. STEPHANIE: AND CONSUMERS DON'T HAVE THE MONEY TO SPEND. >> IT IS CRITICAL AND UNDERSTAND, THEY HAVE RAISE RATES SEVEN TIMES AND IT HAS HAD NO EFFECT. WE ARE MEASURING THE INFLATION AT AROUND 15%. AND WHEN THE THREE ECONOMIES -- THEY BUY ON INSTALLMENTS. SO IT IS A LOSE LOSE SITUATION. DAVID: THEY LOST $1 MILLION -- THEY LOST ONE MILLION JOBS LAST YEAR. THEIR GDP WAS DOWN IN THE THIRD QUARTER. >> IT COULD STILL DECLINE. WE REPORTED THAT NOVEMBER WAS DOWN. >> PASSING AUSTERITY MEASURES THAT NEED TO BE PASSED WILL BE KICKING THEM WHILE THEY ARE DOWN. >> BUT THERE IS A SILVER LINING WHICH IS THE IMPEACHMENT. STEPHANIE: NO. WRONG. WHAT IS THAT GOING TO DO? IT IS A DISASTER ACROSS THE BOARD. BUT AT LEAST IT IS AN END TO THE NIGHTMARE. >> KNOW IT IS NOT. DAVID: SOMEBODY WITH NOBODY. >> THE IMPEACHMENT BID RIGHT NOW IS OCCUPYING A LOT OF CONGRESS IS TIME. AND THIS IS SOMETHING THAT ANALYSTS DIDN'T SEE COMING. IT IS TAKING THEIR TIME AWAY FROM WHAT THEY NEED TO DO WITH THE BUDGET. >> DON'T FORGET THE $3 BILLION MATCHING -- BILLION MISSING. STEPHANIE: SO MAYBE WE GET A LITTLE BIT OLDISH AND GO LONG. THOSE AREN'T THE ONE BILLION -- THOSE ARE THE ONE MILLION PEOPLE WHO LOST THEIR JOBS. >> WHEN YOU REPLACE THE FINANCE MINISTER WITH -- FROM THE NEW SCHOOL WHO WAS HELPING TO COOK THE NATIONAL ACCOUNTS, WHEN SHE WAS UP FOR IMPEACHMENT THE FIRST TIME, YOU HAVE LOST YOUR INVESTMENT GRADE RATING. SO CHANGING THE ADMINISTRATION , IF CONGRESS IS BUSY DOING THAT, I CAN'T THINK OF ANYTHING MORE PRODUCTIVE. >> THE PICTURE SOUNDS GRIM. WHAT IS THE ANSWER? DAVID: THE PROGNOSIS? STEPHANIE: OK. >> THEIR PRAYER IS THAT CHINA RECOVERS AND STARTS TO INCREASE DEMAND OF EXPORTS. >> THAT ISN'T EVEN THEIR MAIN PROBLEM. THEIR PROBLEM IS DOMESTICALLY ORIGINATED. THEIR PROBLEMS WERE COOKED DOMESTICALLY AND ALL OF THE ANALYSTS PROVE THAT AND SHOW THAT. THAT IS JUST ADDING TO THE WOES. YES, IT WOULD BE HELPFUL. YES, THERE ISN'T A SURPRISE WITH THE FED HIKING DRAMATICALLY. IT IS SIMPLY POLITICAL. THEY NEED TO GET THEIR ACT TOGETHER. STEPHANIE: LET'S GO TO ARGENTINA. WHEN WE SAW ARGENTINA AND VENEZUELA AND WAS ILL -- THESE WERE GREAT INVESTMENT OPPORTUNITIES. MATT: I HAVE TO COME BACK HERE. [LAUGHTER] STEPHANIE: LET'S GO. THIS BETTER BE GOOD. DAVID: I HAVE AN IDEA, WHY DON'T WE GO TO MATT? MATT: AT LEAST THE INFLATION IN BRAZIL DOES LOOK SO BAD WHEN YOU DRAFTED AGAINST VENEZUELA AND ARGENTINA. ARGENTINA IS AT 16 VENEZUELA, WHICH BY THE WAY, THEY DON'T RELEASE OFFICIAL FIGURES, BUT WHAT IT TO 24% IS THE ROUGH GUESS? BUT IT COULD BE 200%. >> BRAZIL HAD A HISTORY OF HYPERINFLATION. THEY HAD INFLATION UP TO 3000% 20 YEARS AGO. SO WHAT HAPPENED? IF YOU HAVE A COUNTRY WHERE THIS IS IN THE RECENT MEMORY, INFLATION EXPECTATIONS WILL EXASPERATE THAT. STEPHANIE: SAY THAT AGAIN. >> CERTAIN FOOD PRICES ARE UP 1500%. THIS IS BEING TAKEN OUT OF THE EVERYDAY CONSUMER. SO ANY DISCRETIONARY SPENDING IS ZERO. AND THAT IS THE REAL ISSUE. REMEMBER, IT IS THE SAME THING IN ARGENTINA'S NUMBERS. IT IS RUNNING AROUND 50%. >> 26 >> THAT'S WHAT THEY HAVE ANNOUNCED. STEPHANIE: ALL RIGHT, WE HAVE TO LEAVE IT THERE. KATIA PORZECANSKI, THANK YOU. AND THANK YOU TO THIS GREAT GROUP. WE WILL BE BACK WITH "BLOOMBERG <GO> ," WE HAVE A LOT MORE TO COVER.