By ALAN CLENDENNING, Associated Press

New Brazilian President Luiz Inacio Lula da Silva speaks during his first meeting with government ministers in Brasilia, Brazil, on Friday, Jan. 3, 2003. BRASILIA, Brazil (January 2, 4:35 p.m. AST) - Breakfast with Hugo Chavez, dinner with Fidel Castro.

The first day in office for Brazil's new president, Luiz Inacio Lula da Silva, projects the image of a leftist alliance in Latin America - one that Chavez, Venezuela's president, has already nicknamed the "Axis of Good."

Such an alliance could hinder U.S. efforts to create a Free Trade Area of the Americas stretching from Alaska to the tip of Argentina by 2005.

Despite the perception of a new Latin American troika, doubts abound that Silva really wants to form a bloc with such close ties to Chavez and Castro, Cuba's leader.

But by giving Latin America's other two leftist leaders such a warm welcome a day after his inauguration, Silva gets huge political mileage in Brazil, where Castro and Chavez are revered by the far left of his party.

The United States sent Trade Representative Robert Zoellick to the inauguration, seen by the Brazilians as something of a snub because Zoellick suggested last October that Brazil's only trading partner would be Antarctica if it did not join the hemispheric trade zone.

Silva responded by calling Zoellick "the sub secretary of a sub secretary of a sub secretary" during his election campaign.

At the breakfast meeting, Chavez asked Silva to send technical experts from Brazil's state-owned oil company to replace some of the 30,000 Venezuelan state oil workers who have joined a crippling nationwide strike. Silva said he would consider the request.

And before dining Thursday night with Silva, Castro told Associated Press Television News that Brazilian-Cuban relations will grow stronger now that Brazil has its first elected leftist president.

Arriving at Silva's rural retreat 20 miles outside Brasilia for dinner, Castro shook hands and signed autographs for about 50 cheering Silva supporters. He did not speak with reporters.

Castro and Chavez had front-row seats in Congress at Silva's inauguration Wednesday, where an estimated 200,000 Brazilians waved red flags. Many were dressed in red and white clothes, the colors of Silva's Workers Party.

The Cuban and Venezuelan leaders had dinner together, and talked until 4 a.m. Thursday at the Brasilia hotel where Castro is staying.

But experts said Silva's efforts to accommodate Castro and Chavez in Brasilia could be carefully calculated political window dressing.

Silva angered his party's left wing by appointing fiscal moderates to key cabinet posts, but needs its help to push programs through Congress, where he lacks a majority.

"Embracing Castro and Chavez, the symbols of anti-U.S. influence in Latin America, gets Silva political capital in Brazil," said Stephen Haber, a Latin American expert at the Hoover Institution at Stanford University. "But this is a dangerous game, you go too far one way or the other and this will blow up in your face."

Silva doesn't want to scare away investors, who already sent the value of the Brazilian currency, the real, down 40 percent last summer over fears that his administration might not follow responsible economic policies.

So far, Silva seems to be pleasing his supporters without spooking financial markets. The real, which ended down 35 percent last year, finished stronger Thursday as the market reacted positively to second-tier finance ministry appointments.

Named to the posts were a mix of left-leaning, moderate and liberal economists with strong credentials, along with officials from the administration of former President Fernando Henrique Cardoso who will keep their posts.

Chavez coined the "Axis of Good" term after Silva was elected in October, hailing the victory and saying Venezuela, Brazil and Cuba should team up to fight poverty.

"We will form an 'axis of good,' good for the people, good for the future," Chavez said at the time.

But Brazilian political scientists dismissed the possibility of an "Axis of Good" being created by the meetings between Silva, Castro and Chavez.

"There is no way this represents the beginning of Chavez's 'Axis of Good' and much less the 'Axis of Evil' imagined by right-wing Americans," said Luciano Dias, a political scientist at the Brasilia-based Brazilian Institute of Political Studies.

Silva, who is popularly known as Lula, "would never even consider creating a nucleus of leftists in Latin America, he is too smart for that," Dias said.

U.S. State Department spokesman Richard Boucher would not comment Thursday on the possibility of the alliance.

Chavez left his strikebound and politically riven country despite the crippling work stoppage aimed at toppling him from the presidency of the world's fifth largest oil producer.

Silva also has a compelling reason for staying on friendly terms with Chavez: The long border the two countries share.

"Brazil worries very much about violence in Venezuela spilling over into Brazil," Haber said. "So you want to have peaceful relations with the Venezuelan, regardless of who is in charge."

During his breakfast with Silva, Chavez also brought up the idea of increasing cooperation among Latin American state-owned oil industries and setting up a company called Petro-America.

"It would become a sort of Latin American OPEC," Chavez said. "It would start with Venezuela's PDVSA and Brazil's Petrobras," and could come to include Ecopetrol from Colombia, PetroEcuador from Ecuador, and PetroTrinidad from Trinidad and Tobago."

Last week, Cardoso's outgoing administration sent a tanker to Venezuela carrying 520,000 barrels of gasoline, but that barely dented shortages around the country.

If Silva decides to help Chavez with Brazilian oil workers, it probably won't accomplish much either, said Albert Fishlow, who heads Columbia University's Brazilian studies program.

"If he does, it will be minimal and not enough to affect the situation," Fishlow said.

Yo, al contrario de las voces agoreras de los profetas del desastre –no quiero señalar nombres, pero los siento muy cerca, casi al lado–, solo veo cosas buenas para este año que acaba de comenzar. Según el horóscopo chino, entramos en el año de la cabra. Ya se sabe que cuando pretende aludirse a la locura de alguien suele decirse: “está como una cabra”. La cabra produce leche y hay alguien importando leche, no sé si me explico. La cabra tiene cuerno y el cuerno simboliza el poder, pero el diablo se representa también con cachos. El que tenga entendimiento que entienda. Me perdonan lo críptico, pero así somos los profetas.

Ahora bien, si analizamos el 2003 desde el punto de vista de la numerología, tenemos que la suma del número es igual a 5. Pero 5 menos 1 que se va, son 4, día del golpe de febrero. Febrero es el mes 2, más 4 suman seis, menos 1 que se va, tenemos otra vez 5. Pero fíjense en el detalle de los dos ceros: los ceros no valen nada; luego, si quitamos los ceros, nos queda 23, al revés 32, que sumados dan 55, 5+5 = 10, pero como el cero nuevamente no vale nada nos queda otra vez 1, el que se va. Y por último, si multiplicamos los números del año, el resultado es 6, que es igual a cinco cuando el 1 se va. Conclusión: alguien como que se va, se va, se va, se va.

También podemos, para saber qué nos depara el 2003 a los venezolanos, recurrir a las profecías de Nostradamus. En la centuria XII, 52, puede leerse –en francés antiguo– la siguiente cuarteta: Ce qui est nè dans cetè sabane Ne regarde pas cete fleur Quelque choise que Dieux a doné Le peuple ce àrrêbaté Lo que traducido al español significa: El que nació en esta sabana Deja de mirar las flores Lo que Dios le ha dado El pueblo se lo arrebata.

La interpretación de esta cuarteta es muy clara: El que nació en esta sabana. Esta sabana es Venezuela, pero si se voltea la expresión “esta sabana” es “sabana esta”. Sin duda, Nostradamus alude a Sabaneta, lugar de nacimiento de Chávez. “... Deja de mirar las flores” se refiere, obviamente, al palacio de Miraflores.

Lo que “Dios le ha dado” puede ser el poder, pero puede referirse también a Diosdado, uno de los más cercanos colaboradores de Chávez, y que en abril le entregó el poder.

“... El pueblo se lo arrebata” es una expresión muy clara: alude a un proceso electoral. El significado de la frase es inequívoco: Chávez, que nació en Sabaneta, deja el palacio de Miraflores por decisión del pueblo.

Yo, por mi parte, no sabía que tenía inclinaciones proféticas, pero, el otro día, trasegando en el estacionamiento unos galones de gasolina que me consiguió Graterolacho, comencé a tener visiones y he aquí lo que vi: –El Presidente renuncia o lo sacan o pierde una elección o se enferma o alguien lo traiciona o alguna vaina.

–Un hombre relacionado con algo negro que sale de la tierra y que se procesa en refinerías, catire, de lentes, nacido bajo el signo de Cáncer y cuyo nombre comienza con J y su apellido con F, será presidente.

–Tarek dejará de ser “el poeta de la revolución” y pasa a ser conocido como “el poeta de la oposición”.

–Las colas de Caracas serán cosas del pasado.

La gente descubrirá lo sabroso que es andar sin carro. –Le agarraremos el gusto a cocinar con leña.

–Más de una maracuchita será bautizada el año que viene con nombres como “Nafta Catalítica Montiel” o “Marina Mercante Urdaneta”.

–Como compensación al Grupo Polar, cuando el paro termine, todos nos tomaremos una caja diaria de cerveza.

–Marta Colomina tendrá un programa de cocina.

–La reconciliación en Venezuela será de tal magnitud que Freddy Bernal se enamorará perdidamente de Nitu Pérez Osuna y Ernesto Villegas trabajará en Globovisión.

–La gente, entrenada en marchas, vigilias y cacerolazos, experta como se ha hecho en reconocer la demagogia, el oportunismo y la arbitrariedad, no se calará otro mal gobierno nunca más.

Y para todos, ¡un Próspero Gobierno Nuevo!

Laureano Márquez El Nacional 5 de Enero de 2003

By Riccardo Orizio

How does a dictator fall? What goes through the mind of a ruthless ruler, accustomed to being obeyed and feared, when his fortress begins to crack and the writing on the wall points to “ex”? Like many tyrants, Saddam Hussein will deny even the possibility of defeat until it stares him in the face — and may refuse to see it even then.

In 1991 Colonel Mengistu, responsible for the death of half a million people during the Red Terror campaign in Ethiopia, had to be all but forced by his comrades to board a US plane for Zimbabwe when rebels closed in on Addis Ababa: he was still dreaming of an improbable Soviet rescue. Five years earlier, “Baby Doc” Duvalier, President for life of Haiti, had insisted on a last champagne party at his palace before a plane flew him, his small family and immense collection of luggage to the relative anonymity of France, where he rented a villa next to Graham Greene’s.

And who could forget the last political rally of Nikolai Ceausescu and his wife at Christmas 1989, in a Bucharest that had already switched allegiance? There was the strongman greeting a screaming crowd from his balcony in the blithe assumption that his people were still deliriously supportive, his smile turning to horror and incredulity as what they were chanting sank in — “Death to Ceausescu”. Moments later he was arrested; then sentenced to death.

Having spent the past eight years chasing deposed dictators around the world, I have had the dubious privilege of asking them about these last moments. To judge from their experiences, if and when the Americans approach Baghdad, Saddam can choose between two options: the Idi Amin/ Duvalier/ Mengistu route or the path trodden by Milosevic/ Noriega/ Bokassa.

I met Amin in Jedda. As a “temporary guest” of the Saudi Royal Family since 1980, a former head of State and convert to Islam, Amin is entitled to a salary, local gym membership (he is a keen swimmer) and a peaceful life. If a foreigner is in town looking for him, they whisk Amin off to Mecca, where no infidel can follow.

Mengistu lives in Harare, with an escape route to his beloved North Korea if Robert Mugabe falls. And Jean-Claude Duvalier is in Paris. Since 1986 he has shed a wife, several kilos and many millions, but retains the discreet hospitality of the French Government and the support of many Parisian taxi drivers, former Tontons Macoute who followed him into exile fearing for their lives. Today “Baby Doc” studies solar energy and worships voodoo, dreaming of an impossible comeback and speaking to his countrymen through a sinister website.

Like these former dictators, Saddam could find himself a new home, miles away from international tribunals and foreign journalists. The Saudi monarchy might try to please fundamentalist dissidents by offering him asylum in the name of Islamic solidarity. Or, with the assent of Washington, Libya and Morocco are possible destinations.

The advantage of safety in exile, however, is counterbalanced by the disadvantage of silence imposed by the host government. For this means fewer opportunities to clear one’s name.

So Saddam might decide to go the Milosevic/ Noriega/ Bokassa way: big public trials during which he tries to go down in history as victim or martyr and embarrass the enemy in the process. He might choose to disclose, for instance, the secret oil deals with Moscow; the commercial contracts with Western governments who were officially fighting the war against terror but were also profiting from it; or the deals with the US during the war against Iran. He could also take revenge against any Arab government that sides with the US, by revealing their support for terrorism.

This was Noriega’s plan. “Pineapple Face” ruled Panama while acting as a CIA informant. Toppled by his former US employers, they then put him on trial. Noriega failed to impress the jury with revelations about the dirty Central American wars. Sentenced for money-laundering and drug-trafficking, he is, however, young enough in his mid-60s to have a future. In a letter he sent me from jail in Miami two years ago, he wrote: “I do not consider myself to be a forgotten individual, because God, who writes straight albeit with occasionally crooked lines, has not written the last words on Manuel A. Noriega!”

Even the monstrous Jean-Bedel Bokassa, the self-proclaimed Emperor of the Central African Republic (CAR) accused of cannibalism, tried to shame his former masters, the French, with accusations of “double standards and hypocrisy” — beginning with revelations about gifts of diamonds to Valéry Giscard d’Estaing. Ending up in a French castle with no friends and too many bills, Bokassa flew back to Africa to be sentenced to death, a sentence commuted to life imprisonment, then cut to ten years. After serving seven, in 1993 he was freed. When I met him a year later, dressed in a long white robe and holding his last possession, a silver crucifix, he claimed to be an apostle of the Catholic Church secretly appointed by the Pope: “I fought for France. I liberated France from the Nazis. I called Giscard my cousin. And they betrayed me.” The road to denunciation and attempted martyrdom may be uncomfortable, but it can prove rewarding. In 1996 when Bokassa died, his reputation had been restored to the point where the CAR state radio could describe him as “illustrious”.

General Jaruzelski, last Communist ruler of Poland, is under trial, and Egon Krenz, East Germany’s last Communist leader, is in prison. Both claim to be victims of victors’ justice. Their names, far from being hated in Warsaw or Berlin, are cloaked in an aura of nostalgia. Time heals.

And time is the most important asset for a dictator to secure on his way out of the palace. For the more time he has at his disposal, the greater the chance that he will one day be able to rebut criticism with a simple question: “Are you sure that those who followed me were better, more democratic, more honest? And that my country is better off now than when I ruled it?” It’s an astute question, and one that Duvalier asked me. In order not to give him satisfaction, I refused to answer it. As Noriega says, sometimes God writes in crooked lines. —The Times

Business news   (Filed: 06/01/2003)

The President wants us to know he means business. Tomorrow he will deploy his economic task force, designed to rout the forces of recession.

Tax cuts, some of them mounted on dividends, will drive deep into no-man's-land and lead a general advance. It will be all over before the hot weather, or if not, the Federal Reserve will launch its secret weapon.

The task force will rely on conventional weaponry, used on an all-American scale. These "package" tactics have been tried on our own economy from time to time, although not lately. On the battered terrain of Japan, the general staff has now sent a dozen packages over the top, and none of them has got beyond the barbed wire.

The Fed, too, has had to think again about its weapons and tactics. Interest rates are its standard equipment, and Alan Greenspan, its veteran commander, has fired off a long barrage of interest-rate cuts at assorted enemies. He has sometimes been given the credit for saving the world, but he is still on the defensive.

Two months ago he brought the Federal funds rate down by 0.5pc to 1.25pc. That was a bold move but not one that he could go on repeating indefinitely. He is short of ammunition. After three more cuts like this, he would be paying the banks to take money away from him. New thinking would be needed.

It has come from Ben Bernanke, who was recruited from Princeton to the Federal Reserve Board and seems to have brought the plans with him. They make the Fed's secret weapon resemble a printing press, and Mr Bernanke says that it is one. The government, so he explains, can use it to produce as many US dollars as it wishes, at virtually no cost.

What would it do with all these dollars? Hand them out? Drop them from helicopters? Not exactly, although it could achieve much the same effect by less flamboyant means. The Fed could, so Mr Bernanke suggests, buy Treasury bonds and other securities from the banking system. It could lend the banks money at low rates of interest or none, and not be too choosy about the security it takes.

Mr Bernanke clearly brings his own perspective to his work. He is a learned economist, a student of money and credit, and the author of a new book on the Great Depression of the 1930s. He has no wish to write the sequel, and if a loosening of monetary rectitude is what it now takes to ward deflation off, he would be for it.

From a central banker, even a new recruit, this is quite something. Ever since William Pitt tried to ravish the Old Lady of Threadneedle Street, central bankers have been supposed to believe in monetary virtue, not in organised debauchery. A mother superior might as well announce that her convent would be open to free love, or love on reasonable terms.

No wonder that Barton Biggs, the sage of Morgan Stanley, suggests that this declaration is an era-changing event. The Fed now has a vigilante on its board: not so much a super-dove as a deflation hawk. His presence goes to show how far deflation has moved up the central bankers' worry-lists.

They can see that in Japan, where deflation is entrenched, the central bank has long ago run out of ammunition and ideas to combat it. They will want to be sure that this fate does not happen to them. Mervyn King, the Bank of England's governor-designate, has said that central banks around the world will do their best to prevent deflation.

Thanks to Mr Bernanke, they have the technology, and Professor Tim Congdon at Lombard Street Research says that there is nothing new about it. (Another ground-breaking British invention, developed in America . . . )

Twenty years ago the Bank was trying to mop up excess money in the system by selling more government stock than the Treasury needed to issue. The process would work just as well in reverse, and it has.

This was one reason why Britain once led the world in stagflation: a sluggish or stagnant economy in which inflation persisted. A hint of stagflation today is that all the world's four major currencies are perceived to be too strong. They cannot all be over-valued against each other, but they may be in terms of the goods and services they buy. So the prices of oil and of gold have been rising.

Such are the perils that go with the happy illusion that policy-makers can exchange the economic cycle for an endless escalator. Here, chancellors claim to have broken the mould or to have abolished booms and busts.

Mr Greenspan never claimed that, but he did not need to. In the new economy, the rules seemed to have changed for the better. Now here it is, all set to keep the escalator running, and with an advanced set of tools in his bag. In the Great Depressiom, his predecessors at the Fed were trying to stabilise the economy.

Friedrich Hayek, the great liberal economist, thought they were making things worse, by repeating, in a slump, their mistakes from the boom: "Monetary policy all over the world has followed the advice of the stabilisers. It is high time that their influence, which has already done harm enough, should be overthrown."

We have yet to hear Mr Bernanke's gloss on that, or to see his weaponry in action. Perhaps his smart bombs would do all that he hopes of them, but few bombs are smart as all that, and none is smarter than its aimer. Stand well clear.

Reuters, 01.05.03, 7:55 PM ET By Hugh Bronstein

NEW YORK, Jan 5 (Reuters) - With the exception of Venezuela, where a national strike is strangling the economy, emerging market bond prices were expected to rise this week as as investors bet that the new president of Brazil will shed his radical past and govern responsibly.

President Luiz Inacio Lula da Silva, a one-time hard left union boss who won October's election after steering his campaign toward the political center, was seen winning over the markets with his recent pledges of fiscal restraint.

"The general tone of the market will be better, with Brazil grinding higher and most of the other credits remaining firm," said Christian Stracke, lead emerging markets analyst at CreditSights, a Wall Street research firm.

"The only wild card is Venezuela, but I don't see any contagion effect," Stracke said. "Even if Venezuela drops another five points I don't see that having anything to do with the rest of the market." While Venezuelan bonds have stumbled recently amid intensified opposition to President Hugo Chavez, Brazilian bonds have gained ground on Lula's reassurances that he will not abandon prudent policies in his quest to improve the lot of ordinary Brazilians. He was sworn in New Year's Day.

"The market is giving Lula the benefit of the doubt," said Walter Molano, head of research at BCP Securities, a Latin American broker dealer based in Greenwich, Connecticut.

Benchmark Brazil C bonds <BRAZILC=RR> ended last week bid just above 68. The bonds took investors on a stomach-churning ride in 2002, starting the year in the mid 70s only to be beaten down into the 40s several months ago when fear of Lula was at its highest.

"I think C bonds are poised to break through 70," Molano said. The Lula government has pledged to place pension reform high on the agenda when Congress reconvenes in February. Brazil's bloated social security system is one of the greatest drains on its public finances.

But Martin Schubert, chairman of the Miami-based European Inter-American Finance Corp., warned that Brazil C bonds are pressing up against resistance "based upon technically overbought conditions."

"To me these C bond prices look too high," Schubert said. "Prices have moved up from substantially lower levels on Lula's new cabinet, which has yet to be tested."

VENEZUELA WRITHES, BONDS FALL Thousands of supporters of President Chavez marched in Caracas on Sunday to protest the fatal shooting of two men in clashes related to the work-stoppage.

The killings intensified feuding during the five-week-old strike which has crippled the oil sector of the world's No. 5 petroleum exporter. Foes of Chavez have vowed to keep up the shutdown until he resigns or calls early elections.

Chavez was elected in 1998 after vowing to wrest control from the country's corrupt elite and enact reforms to help the poor. But opposition has grown amid charges the president wants to establish a Cuban-style authoritarian state.

Venezuela DCB bonds <VENDCB=RR>, which traded as high as 83 before the strike, weakened to a bid of 77-1/4 at the start of last week. They closed Friday at a bid of 72-3/4.

"I think DCB will trade lower this week but the pace of the selloff should slow," Stracke said. "I don't think they'll trade much lower than 70 because the market has more or less priced in the fact that Venezuela will have a serious cash crunch in the next three to six months that could challenge its ability to make external debt payments."

Many investors say Chavez is probably on the way out and that Venezuelan bonds are poised to rally on that development. But as the work-stoppage continues optimism is wearing thin.

"The strike could still push Chavez out, but even if it did it would be against a background of serious political instability and economic chaos," Stracke said. "If the strike does not push him out, the government will have to struggle with the slump in oil revenues. So there's no positive scenario for Venezuela that seems probable." Investors will also focus this week on Ecuador, whose bonds rallied on Friday after Mauricio Pozo, a Wall Street favorite, was named as incoming finance minister.

ARGENTINA BACK IN THE NEWS Wall Street is watching to see if Argentina will manage to make a $1 billion payment it owes to the International Monetary Fund on Jan. 17.

The once-prosperous South American nation has come to be held in low regard by the market since defaulting on its private creditors a year ago and more recently on the World Bank.

Top IMF and U.S. Treasury officials said on Saturday they were trying to work out an IMF loan deal with Argentina but talks with the country were not complete.

"Without a new credit agreement with the IMF the Argentina debt situation will fall into a deeper abyss and (the country's) FRB bonds could trade down to the 15 area," Schubert said.

The bonds <ARGFRB=RR> closed last week bid at 20-5/8.