As the good old days of record commodity and credit growth are gone for the moment, Brazil and its exchange traded fund (ETF) face the stark reality of global economic unrest.

Credit is scarce and banks have grown suspicious of one another. This set the stage for two of the largest banks in Brazil, Itaú and Unibanco, to merge and create a bank with combined assets of $263 billion, according to the The Economist.

A sudden selloff of Brazilian shares and currency created losses on foreign-exchange derivatives meant to limit Brazilian companies to currency moves. Companies goaded into this false sense of security acknowledged large losses, which spread fear throughout the industry and caused banks to reduce lending practices.

Reports are coming in showing farmers having hard time finding credit, which could ultimately affect next year’s harvests. Bank monthly payments for every type of loan has increased and consumer credit has shriveled up in banks’ anticipation of bad loans.

Planning minister Paulo Bernardo acknowledges that the government’s target for primary fiscal surplus for 2009 dropped from 4.3% to 3.8% of GDP.

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