and a nominal

fertieg97

But it gets much worse:
With this revenue, the government will be able to officially "meet" its 2010 budget target of a primary account surplus of 3.3% of GDP.
"This is clearly an accounting trick," Roberto Padovani, chief economist for WestLB in Brazil, told MNI Wednesday. "The primary account balance no longer has any meaning."
Salto said the Petrobras operation was structured this way precisely in order to permit this accounting trick.
"It would have been simpler for the company to just give the government the shares to pay for the reserves," he said.
Of course, the government could take advantage of current strong growth to impose fiscal austerity relatively painlessly, but Padovani also doubts this will happen.
And the piece de resistance:
As Market News concludes, the entire scam is nothing less than the latest brilliant Keynesian scam to "redistribute"the pain into the future, while getting the benefits now. Of course, none of the excess will actually ever be reinvested in the middle-class.
With current account deficits also expected to exceed 3% of GDP, Brazil is increasingly dependent on international capital flows, and another international crisis or a change in investor sentiment could cause a "sudden adjustment," he said.
"If the next government does not change course, and we do not expect it to, in the medium term, the risk of a crisis will grow."
WestLB's Padovani said this medium term is probably about two years.
"Right now, there is a lot of complacency in the markets surrounding Brazil, but once the rest of the world comes out of recession and there is more competition for capital flows, market agents will start paying attention to Brazil's fiscal problems," he told MNI.
"Brazil is building a risky scenario. Sooner or later things will explode," Padovani warned.
Last week, to much pomp and circumstance,[link widoczny dla zalogowanych], Petrobras IPOed in a $69 billion offering of stock, which was promptly praised by Brazil president Lula as the "the biggest equity offer in the history of capitalism." Yet when one digs through the numbers it becomes glaringly obvious that not only was the "real" IPO one third the size of the vaunted amount, but that a major part of the offering is nothing less than a major shell game,[link widoczny dla zalogowanych], which not only distorts the perception of end demand for the offering for other, more naive investors, but also allows the Brazilian government to lie in open public that it has met its primary account surplus of 3.3% of GDP. Market News has broken down the math works behind what is quickly becoming the biggest act of diversion since the days of Houdini.
Such an ingenious way to pad the numbers could have only come from our own Bureau of Labor Statistics.
In something that by all appearances could have only been discovered by an administration thug out of Chicago, the final result ends up actually boosting government data!
As Market News explains, of that $69 billion "raised" in the IPO, "$43.5 billion came from Petrobras itself, to pay the government for 5 billion barrels of undeveloped ultradeepwater petroleum reserves, and that in turn was paid for using a government loan. In sum, for $43.5 billion of the $69 billion capitalization, no money changed hands, as the company essentially gave the government shares in return for the petroleum reserves."

At the end of the day, the whole thing is nothing less than a way to fool the idiotic keynesian professors over at harvard and columbia (sorry, not even worthy of capitalization) that all is good, so they can rubberstamp their pathetic little reports that all is good in Keynesia. Until it all blows up.
Get that: the government, via two intermediaries,[link widoczny dla zalogowanych], is paying tiself. All the while idiot investors get the impression that there is actual fund flow going into proper capital allocation. Poor fools.
Salto estimates that once this and other "accounting tricks" are discounted, the government will achieve a primary surplus of only 2.6%of GDP.
Over the last 12 months, the consolidated public sector has had a primary surplus of only 2.01%, and a nominal (cash flow) deficit of 3.38% of GDP, according to Central Bank data released Wednesday.
However, R$24.7 billion ($14.4 billion) of the government's loan to Petrobras came via the state BNDES development bank. The government is lending $14.4 billion to the BNDES, which it is lending it to Petrobras, to pay the government. But government accountants are booking this $14.4 billion as revenue.