STOCK MARKET WATCH -- Monday, 23 December 2013

[Demeter]

7. Insight: How U.S. spying cost Boeing multibillion-dollar jet contract

http://www.reuters.com/article/2013/12/20/us-boeing-brazil-insight-idUSBRE9BJ10P20131220

...Brazil had been struggling for years to decide which company to choose for a $4 billion-plus fighter jet contract, one of the world's most sought-after defense deals and one that would help define the country's strategic alliances for decades to come. But Rousseff, the leftist president known for being sometimes gruff and even standoffish with foreign leaders, was thrilled after a 90-minute meeting in Brasilia on May 31 with U.S. Vice President Joe Biden. After Biden's reassurances that the United States would not block crucial transfers of technological know-how to Brazil if it bought the jets, she was closer than ever to selecting Chicago-based Boeing to supply its fighter, the F/A-18 Super Hornet.

"She's ready to sign on the dotted line," one of her senior aides told Reuters at the time. "This is going to happen soon."

And then along came Edward Snowden.

Documents leaked by the former National Security Agency contractor, released in the weeks after Biden's visit, ended up enraging Rousseff and completely changing her plans, several Brazilian officials told Reuters. On Wednesday, she surprised the defense and diplomatic worlds by tapping Sweden's Saab to supply the jets, a move aides said was made in part as a deliberate snub to the United States. The decision was one of the biggest and most expensive consequences yet of the NSA revelations, which have strained Washington's relations with countries around the world. Anger over espionage was not the only reason for Rousseff's decision. Saab's Gripen jet offered the best combination of price, transfers of technology to Brazilian companies and low maintenance costs compared with the other two finalists, Boeing and France's Dassault Aviation, Defense Minister Celso Amorim told reporters on Wednesday.

Still, the NSA revelations were clearly the determining factor for Rousseff, the Brazilian officials told Reuters, for reasons that were both political and deeply personal. A former guerrilla who had fought a U.S.-backed military dictatorship in the 1960s, Rousseff had spent the first two years of her presidency edging closer to Washington, fending off pressure from leftist elements of her Workers' Party and scheduling a rare state visit to the White House for last October. Snowden's documents, many of which were published by Brazil-based U.S. journalist Glenn Greenwald, revealed that Washington had spied on Rousseff's personal communications, those of state-run oil company Petrobras - which Rousseff once chaired - and countless Brazilian citizens.

Rousseff could not understand why Washington would spy on an ally with no history of international terrorism, aides said...The day after that report, a person who had been pushing for Boeing angrily questioned whether the intelligence obtained from Rousseff's communications justified possibly losing the deal. "Was that worth $4 billion?" the person asked rhetorically, speaking on condition of anonymity. Facing renewed pressure from her party's anti-Washington flank, Rousseff requested an apology from Obama, still hoping to salvage the trip. Instead, Obama said only that he would order a review of U.S. intelligence-gathering techniques.

AH, YES, OUR UNAPOLOGETIC PRESIDENT STANDS TALL, IN THE "W" TRADITION. $4 BILLION AND A LOST ALLY LATER....THE BIGGEST POSSIBLE ALLY IN SOUTH AMERICA, NOW FIRMLY IN THE CHAVEZ CAMP, NO DOUBT!

WAY TO GO, MR. PRESIDENT!