Edir Macedo is 5-foot-6, slight, and 68 years old. He has deformed fingers, a sparse crown of graying hair, and more than 5 million followers, whose donations over the last 36 years have made him a billionaire. In Brazil, where he was born and raised, he is a major national figure, the subject of dozens of criminal inquiries, and the owner of Rádio & Televisão Record, a media conglomerate that runs the country’s second-largest television network. He is known to most everyone by the title he created for himself: He is O Bispo—“The Bishop.” Macedo is the founder of the Universal Church of the Kingdom of God, a Pentecostal denomination specializing in prosperity theology, which links faith to financial success. He preaches twice a week, often in two different cities, and the sermons are fervently watched on church websites, his Facebook page, and the miniature TV sets that Brazilian taxi drivers like to keep on their dashboard. Now and then he holds outdoor events that draw crowds of half a million. In February he addressed 5,000 of his parishioners at one of his churches in Belo Horizonte, in southeastern Brazil. … In Macedo’s teaching, tithing, or giving 10 percent of your income to the church, is a mandate from God. … Macedo is proud of his success, but turns questions about his wealth into questions of the spirit. He declined an in-person interview; in an e-mail, he writes: “From the point of view of my faith in Jesus Christ, I am the richest man in the world.”
To say Batista overreached would be to seriously undersell what has happened in the 18 months since that self-regarding presstravaganza of hubris and magical thinking. In what is shaping up to be one of the largest personal and financial collapses in history—if not the largest—Batista may be nearing bankruptcy. On Oct. 1, OGX missed a $45 million interest payment on bond debt it had racked up during its rise. Batista has sold his planes and his helicopter, and creditors are arguing over the remains of his companies. He’s no longer on the Bloomberg Billionaires Index and has become the butt of jokes in Brazil. One suggests that Pope Francis plans to return to Brazil soon and will again be visiting the poor, including Batista. … Brazil’s securities regulator has started an investigation into Batista and OGX after an investor alleged that Batista dumped 126.7 million OGX shares just before the company scrapped projects and warned that it may stop pumping crude next year. In a July op-ed for Brazil’s Valor Econômico newspaper, Batista said he would honor all of his obligations. In that same article, he put some of the blame on his auditing firm and executives for unreasonably building shareholder expectations. The company has denied it gave faulty advice. Once a staple on the airwaves and in print, Batista has mostly gone silent.
A stagnant economy, a bloated state and mass protests mean Dilma Rousseff must change course … FOUR years ago this newspaper put on its cover a picture of the statue of Christ the Redeemer ascending like a rocket from Rio de Janeiro’s Corcovado mountain, under the rubric “Brazil takes off”. The economy, having stabilised under Fernando Henrique Cardoso in the mid-1990s, accelerated under Luiz Inácio Lula da Silva in the early 2000s. It barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. To add to the magic, Brazil was awarded both next year’s football World Cup and the summer 2016 Olympics. On the strength of all that, Lula persuaded voters in the same year to choose as president his technocratic protégée, Dilma Rousseff. ... Since then the country has come back down to earth with a bump.
1. The Hollow Alliance: The trans-Atlantic partnership has been the world’s most important alliance for nearly seventy years, but it’s now weaker, and less relevant, than at any point in decades. It no longer plays a decisive role in addressing any of Europe’s top priorities. Russia’s intervention in Ukraine and the conflict in Syria will expose US-European divisions. As US and European paths diverge, there will be no more international fireman—and conflicts particularly in the Middle East will be left to rage.
2. Closed Europe: In 2016, divisions in Europe will reach a critical point as a core conflict emerges between Open Europe and Closed Europe—and a combination of inequality, refugees, terrorism, and grassroots political pressures pose an unprecedented challenge to the principles on which the new Europe was founded. Europe’s open borders will face particular pressure. The risk of Brexit is underestimated. Europe’s economics will hold together in 2016, but its broader meaning and its social fabric will not.
3. The China Footprint: Never has a country at China’s modest level of economic and political development produced such a powerful global footprint. China is the only country of scale today with a global economic strategy. The recognition in 2016 that China is both the most important and most uncertain driver of a series of global outcomes will increasingly unnerve other international players who aren’t ready for it, don’t understand or agree with Chinese priorities, and won’t know how to respond to it.
4. ISIS and “Friends”: ISIS is the world’s most powerful terrorist organization, it has attracted followers and imitators from Nigeria to the Philippines, and the international response to its rise is inadequate, misdirected, and at cross purposes. For 2016, this problem will prove unfixable, and ISIS (and other terrorist organizations) will take advantage of that. The most vulnerable states will remain those with explicit reasons for ISIS to target them (France, Russia, Turkey, Saudi Arabia, and the United States), and those with the largest numbers of unintegrated Sunni Muslims (Iraq, Lebanon, Jordan, Egypt, and across Europe).
5. Saudi Arabia: The Saudi Kingdom faces a growing risk of destabilizing discord within the royal family this year, and its increasingly isolated status will lead it to act more aggressively across the Middle East this year. The threat of intra-royal family strife is on the rise, and a scenario of open conflict, unimaginable prior to King Salman’s January 2015 ascension, has now become entirely realistic. The key source of external Saudi anxiety is Iran, soon to be free of sanctions.
6. The rise of technologists: A variety of highly influential non-state actors from the world of technology are entering the realm of politics with unprecedented assertiveness. These newly politically ambitious technologists are numerous and diverse, with profiles ranging from Silicon Valley corporations to hacker groups and retired tech philanthropists. The political rise of these actors will generate pushback from governments and citizens, generating both policy and market volatility.
7. Unpredictable Leaders: An unusually wide constellation of leaders known for their erratic behavior will make international politics exceptionally volatile this year. Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan are leaders of an unruly pack that includes Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman and – to a lesser but important extent – Ukraine’s Petro Poroshenko. These unpredictable leaders make our list for 2016 because their interventions overlap and conflict. One powerful, erratic leader spells trouble; four spell volatility with major international implications.
8. Brazil: President Dilma Rousseff is fighting for her political survival, and the country’s political and economic crisis is set to worsen in 2016. Contrary to hopes among pundits and many market players, the battle over Rousseff’s impeachment is unlikely to end the current political stalemate. Should the president survive, her government won’t gain the political boost necessary to move on the economic reforms needed to tackle the country’s growing fiscal deficit. If Rousseff is ousted, an administration led by Vice President Michel Temer won’t fare much better.
9. Not enough elections: Emerging markets underwent a historic cycle of national elections in 2014-2015, but this year there are relatively few opportunities for EM voters to make themselves heard at the ballot box. As slower growth and stagnating living standards stoke popular discontent, governance and stability will suffer. Historically, markets have been less volatile in non-election years, but this time will be different. By raising popular expectations, the massive income growth that most EMs enjoyed over the past 10 years has created conditions for a rude awakening.
10. Turkey: After a decisive victory for his AK party in late-2015, President Erdogan will now push to replace the country’s parliamentary system with a presidential one. He’s unlikely to reach his goal in 2016, but his aggressive electioneering will further damage an already battered Turkish business and investment climate. On the security front, there is little prospect of an imminent end to PKK violence, and unrelenting US pressure on Ankara to clamp down on the Islamic State will produce only modest results while making Turkey more vulnerable to new attacks by ISIS.
* Red Herrings: US voters aren't going to elect a president who will close the country to Muslims. China’s economy isn’t headed for a hard landing, and its politics will remain stable. Continued strong leadership from Japan's Shinzo Abe, India's Narendra Modi, and especially China's Xi Jinping will keep Asia's three most important players focused on economic reform and longer-term strategy, reducing the risk of conflict in Asia’s geopolitics.
Golf is returning to the Olympic Games after a 112-year absence. Sixty men and 60 women will play in separate tournaments, putting the game associated with upper-class networking and manicured country clubs on more than 3 billion television screens worldwide. ... The games come at a fraught moment for golf. As of now, just 10 countries — chiefly the United States, Japan, Canada, England and Australia — account for nearly 80 percent of the world’s golf facilities. The sport's major markets in the U.K. and U.S. are stagnant or in decline. Industry leaders see Olympic golf as an opportunity to create more die-hards like Stapff in Asia and Latin America, where a growing middle class presents an attractive potential market. The $70 billion golf industry — including course designers, equipment makers, professional tours, charity events — would reap the benefits. ... The common reasons given for the decline or stagnation are threefold: Golf can be prohibitively expensive and is perceived as elitist; in a fast-paced society, a four-hour round of golf isn't appealing or even feasible for many people; and courses have becoming increasingly difficult, pushing average players away from the game in frustration.
Of the 1,301 mosquito-borne cases recorded in the U.S., 97 percent of them are in Puerto Rico, neither a state nor a sovereign nation, but whose people are, nonetheless, U.S. citizens. As of early June, the start of Puerto Rico's long, hot and rainy summer, there are 1,259 recorded cases on the island, though some health officials believe the true number may be more than 80,000. ... unlike Ebola, which causes gruesome symptoms often followed by death, Zika is somewhat of a stealth virus. Most people infected will have no symptoms. Some may come down with conjunctivitis or break out in a skin rash, or experience muscle or joint pain or run a fever. Within a week or so, all of the symptoms, if they even emerged, are gone. In a certain number of cases, however, this may only be the beginning. ... the CDC estimates that it could cost $10 million to care for one microcephalic child. Zika, which seems to be particularly drawn to neurological tissue, may also cause swelling of the brain or spinal cord in adults, and has been linked to Guillain-Barré syndrome, an autoimmune neurological condition that can cause severe, if usually temporary, paralysis. ... But the scariest aspect of Zika is how little scientists actually know about it. ... Zika was first discovered in 1947 in the Zika Forest of Uganda, where researchers were studying the impact of mosquito-borne viruses on rhesus monkeys. Over the next 60 years, there were only 14 documented cases of Zika in humans, mainly in Africa and parts of southern Asia. ... given the prevalence of a host of factors, ranging from effective sanitation to the ubiquity of window screens and air conditioning, this kind of outbreak anywhere in the continental U.S., and much of Europe, for that matter, is unlikely.
For much of the twentieth century, Brazil defined the region’s approach to the aislados: its National Indian Foundation sent scouts to contact them, with the goal of assimilation. These efforts were mostly calamitous for the contacted people, who tended to die out from disease, or to wind up living in frontier shantytowns, where the men often succumbed to alcoholism and the women to prostitution. In barely fifty years, eighty-seven of Brazil’s two hundred and thirty known native groups died off, and the ones that remained lost as much as four-fifths of their population. In the nineteen-eighties, officials at the National Indian Foundation, horrified by the decline, began to enforce a “no contact” policy: when its agents spotted aislados, they designated their land Terras Indígenas—areas forbidden to outsiders. ... Most of the neighboring countries adopted Brazil’s no-contact policy, which anthropologists now see as the best way to insure the survival of the remaining aislados. But, for Peru, land in the Amazon was too rich to give up. In the past two decades, the country has experienced an economic boom, based on natural resources. Opening up the jungle has made Peru one of the world’s largest exporters of gold (as well as the second-largest producer of cocaine), and the Camisea natural-gas facility, north of Manú National Park, provides half of the country’s energy. ... But, even as Peru embraced the no-contact policy, a new idea was emerging. Last June, the journal Science published a paper in which two prominent anthropologists, Kim Hill and Robert Walker, argued that isolated indigenous groups were “not viable in the long term,” because their environments are too degraded or too vulnerable to incursions. Instead, they advocated a new policy, built around “well-organized contacts.”
Thirty-one US alternates—sometimes called replacement athletes, reserves, or spares—are headed to the 2016 Games. The overachievers who never expected to make it this far will be thrilled, but most are not. Describing the Olympic alternate experience, they use words like “painful,” “frustrating,” “humbling,” and “incredibly difficult.” ... The Olympic team selection process varies by sport. Athletes from individual sports like fencing, equestrian, and gymnastics earn spots based mainly on tournament results and trials. Team sports like soccer and field hockey are wholly subjective, with roster decisions made solely at the coaches’ discretion. ... Unlike the countless books that have been written about the Olympic Games and athletes alike, no such tomes exist about alternates. There is no list of names of Americans who have served as Olympic alternates ... No estimated number. No real history at all.
The restaurant wasn't the first Brazilian steakhouse chain in the U.S. — Rodizio Grill, which debuted in 1995, takes credit for that — but it was Fogo de Chão's aggressive expansion that introduced Americans to a new way to eat meat — an unlimited way, so to speak. In the last 20 years, the "Brazilian steakhouse" category has grown and gathered even more chain concepts (besides Fogo de Chão and Rodizio Grill, there's the Dallas-based Texas de Brazil and Tucanos) which, together, have 92 units spread all over the U.S. And that's not to mention the independently owned Brazilian steakhouses that don't belong to chains. ... The Fogo de Chão story started in 1979, when brothers Arri and Jair Coser bought, with two partners (Aleixo and Jorge Ongaratto, also brothers), an old and rustic churrascaria (or "steakhouse") called Fogo de Chão in the city of Porto Alegre. The act of churrasco (Portuguese for "barbecue") is an integral part of Brazilian culture: More than a meal, it's a celebration, whether Brazilians are hanging out with friends during the hot weekends or celebrating a birthday or even a wedding. The appeal of churrascarias permeates the country. ... GP Investments, made its initial investment in Fogo de Chão in 2006. GP acquired the brand outright in 2011, then sold its shares to American private equity firm Thomas H. Lee Partners in 2012 for $400 million.
It’s been six years since we first wrote about the coming G-Zero world—a world with no global leader. The underlying shifts in the geopolitical environment have been clear: a US with less interest in assuming leadership responsibilities; US allies, particularly in Europe, that are weaker and looking to hedge bets on US intentions; and two frenemies, Russia and China, seeking to assert themselves as (limited) alternatives to the US—Russia primarily on the security front in its extended backyard, and China primarily on the economic front regionally, and, increasingly, globally. ... These trends have accelerated with the populist revolt against “globalism”—first in the Middle East, then in Europe, and now in the US. Through 2016, you could see the G-Zero picking up speed ... with the shock election of Donald Trump as president of the US, the G-Zero world is now fully upon us.
1. Independent America: Trump rejects the comparative weakness of the presidency, and he wants to more directly project American power in service of US national interests
2. China overreacts: Xi will be extremely sensitive to external challenges to his country’s interests at a time when all eyes are on his leadership
3. A weaker Merkel: Could the Europeans have resolved their financial crises without the Germans forcing a solution?
4. No reform: The reform needle won’t move in 2017. Save for a few bright spots, money won’t know where to flow
5. Technology and the Middle East: Technology, a force for economic growth and efficiency, also exacerbates political instability
6. Central banks get political: In the US, there’s risk of an open conflict between the Federal Reserve and the White House
7. The White House versus Silicon Valley: Technology leaders from California, the major state that voted in largest numbers against Trump in the election, have a bone to pick with the new president
8. Turkey: Ever-fewer checks on executive power will leave the private sector vulnerable to political whims
9. North Korea: It’s making consistent progress on an intercontinental ballistic missile capability that would allow it to hit the West Coast of the US with a nuclear weapon
10. South Africa: South Africa’s political infighting will undermine the country’s traditional role as a force for regional security
Red Herrings: US domestic policy, India versus Pakistan, Brazil
For decades, Globo has had a near monopoly in Brazilian living rooms. Its channels control the broadcasting rights to many of the nation’s most popular sporting events, including the World Cup, the Olympics, and the top Brazilian soccer league. Every night about 42 million people watch Globo’s newscast. ... For the past several years, Netflix has been pouring money into Brazil. Local audiences at first met the company with skepticism, bafflement, or indifference. Over time, Netflix started to gain a following, particularly among affluent, young urbanites ... For Netflix, this Brazilian invasion is just the start. The company wants the attention of the world’s well-off cosmopolitan consumers, and is investing billions of dollars in a multifront effort to create a lingua franca of original programming, while also upgrading the world’s video streaming structure. It’s like a worldwide Marshall Plan for premium home entertainment.
Hardly a lost city, Fordlândia is home to about 2,000 people, some who live in the crumbling structures built nearly a century ago. ... Ford, the automobile manufacturer who is considered a founder of American industrial mass-production methods, hatched his plan for Fordlândia in a bid to produce his own source of the rubber needed for making tires and car parts like valves, hoses and gaskets. ... In doing so, he waded into an industry shaped by imperialism and claims of botanical subterfuge. Brazil was home to Hevea brasiliensis, the coveted rubber tree, and the Amazon Basin had boomed from 1879 to 1912 as industries in North America and Europe fed the demand for rubber.
Right now, in a vault controlled by the Los Angeles County Sheriff’s Department, there sits a 752-pound emerald with no rightful owner. This gem is the size of a minifridge. It weighs as much as two sumo wrestlers. Estimates of its worth range from a hundred bucks to $925 million. ... Emeralds invite stories—many of them dubious. At various points in history people have believed that emeralds were capable of protecting humans against cholera, infidelity, and evil spirits, and that an emerald placed under the tongue could transform a person into a truth-teller. This 752-pound emerald doesn’t quite fit under the tongue, and it appears to have had zero positive effects. ... the emerald trade is controlled by hundreds of tiny players. The price is, to put it generously, flexible. ... The market is especially shifty for so-called specimen emeralds—those that are big and weird, destined for curio cases and natural history museums. The emerald in the Sheriff’s Department vault is called the Bahia emerald and it is the consummate specimen: huge, strange, and composed of such low-quality crystals that, were those crystals broken down into smaller rocks, gemologists would call them “fish tank emeralds.” ... Over the past 10 years, four lawsuits have been filed over the Bahia emerald. Fourteen individuals or entities, plus the nation of Brazil, have claimed the rock is theirs. A house burned down. Three people filed for bankruptcy. One man alleges having been kidnapped and held hostage.
Earlier this month a fire from a flying lantern torched the roof of the Rio velodrome, badly damaging its Siberian Pine track. After the Games, the city solicited bids for private companies to run the park, but no one bid, leaving Brazil's Ministry of Sport with the task -- and expense. The maintenance alone will cost the government approximately $14 million this year. Rio's new mayor, Marcelo Crivella, has scrapped plans to turn the handball arena into four public schools. And the 31 towers that made up the athletes village, which were set to be transformed into luxury condos, now sit largely vacant. ... Even some of the medals awarded to the athletes have tarnished or cracked, with more than 10 percent of them sent back to Brazil for repair. Rio officials blame poor handling by the athletes. ... Almost a year since the Games closed, the Rio 2016 Organizing Committee still owes $40 million to creditors. Bloomberg reported in April that the Olympic organizers were attempting to pay creditors with air conditioners, portable energy units and electrical cables. In July, the organizing committee asked the International Olympic Committee for help with its debt; the IOC said no.