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Discusses the incoming flow of money in Brazil since big state companies were authorized to seek money abroad. How billions have been raised through commercial paper and Eurocurrency issues by companies like state telephone company Telebras, oil company Petrobras and mining company Companhia Vale do Rio Doce; Details on the opening of stock markets in Rio and Sao Paulo to foreigners for individual shares.

This article reports on the risks in investing in emerging-market bonds. Just like Victorian vicars preaching temperance, it is always easy for those who warn of the intoxicating perils of investing in emerging markets to find sad victims, shadows of their former selves, who have fallen prey to the temptation of high-yielding paper. The greatest victims today are holders of bonds issued by the Republic of Argentina. But who listens to such admonitions? Anyone lucky enough to have piled into Brazil's dollar debt in October 2002, the month that Luiz Inácio Lula da Silva was elected president, at a spread of 23 percentage points over American Treasury bonds, would last month have been able to sell it at a spread of about four points. Brazil had its own story to tell. Brazil's bonds are exceptional only by degree, for those of almost every other emerging market have been blessed of late. A wealth of positive news has driven down spreads: higher commodity prices for developing-country exporters, a buoyant world economy pulled along by a recovering America, and less-profligate governments--all against the benign backdrop of low worldwide interest rates. Developing countries are understandably keen to take advantage of this enthusiasm. So the current bond market has been a playground for emerging-market issuers, but what on earth is now in it for investors? What could pop the bubble?