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Rousseff Coup Could Sink Brazil, Emerging Markets
Submitted by Shock Exchange
Rousseff Coup Could Sink Brazil, Emerging Markets
Brazil's President Dilma Rousseff's approval rating has plummeted to 8% amid the country's worst recession in two decades. Her job is at risk too. Earlier this week opponents filed a petition to impeach Rousseff due to allegations of corruption by former president Luiz Inacio Lula da Silva at oil giant Petrobras of nearly $2 billion:
This week opponents of Ms Rousseff, incensed by allegations that "pixulecos" mostly involving ruling coalition politicians have cost Petrobras at least R$6bn (US$1.5bn), took their campaign to congress by filing a petition for impeachment with the speaker of the lower house Eduardo Cunha ... The petition from Mr [Helio] Bicudo, which was backed by the opposition in congress, marks the start of what could be a long process to try to topple the former Marxist guerrilla only nine months into her second four-year term.
Rousseff - hand-picked by Lula da Silva to succeed him - appears to be caught up in da Silva's backdraft. Opposition parties also claim she violated Brazil's fiscal responsibility law when she doctored government accounts to allow more public spending prior to the October election last year. Rousseff in turn described the attempt to use Brazil's economic crisis as an opportunity to seize power a modern day coup.
Inopportune Time For A Coup
Petrobras In Dire Straits
Political turmoil could not have come at a worst time. The Petrobras debacle has been a point of contention for the populace. While the elite profited from bribes and kickbacks at the state-owned oil giant, Petrobras is laying off workers and cutting supplier contracts in order to stem cash burn.
And those efforts may still not be enough to stave off bankruptcy. With $134 billion in debt - $90 billion of it dollar-denominated - Petrobras is the world's most-indebted oil company. With oil prices 60% below their Q2 2014 peak, Petrobras will likely crumble under its debt load.
Budget Requires All Hands On Deck
Brazil's fiscal picture is not much better. The economy contracted nearly 2% in Q2 and the Brazilian real has depreciated against the U.S. dollar by nearly 40% over the past year. That said, the country will find it difficult to grow revenues amid declining commodities prices. Including interest payments, the country's budget deficit was projected to grow to 8%-9% of GDP, prompting S&P to downgrade the Brazil to junk status:
Source: The Economist
Brazil finance minister, Joaquin Levy, immediately did an about face; Levy put forth an austerity plan that suggested a R$65 billion mix of cuts and tax increases could generate a 0.7 percent surplus in 2016. The revival of the CPMF tax on financial transactions is expected to raise about R$32 billion, while healthcare, agriculture subsidies, low-income housing programs and infrastructure are expected to bear the brunt of the cost cuts.
The market reacted positively to the austerity plan - the Brazilian real rallied briefly after it was announced. However, Rousseff will need political capital to get the austerity plan approved by congress and supported by the populace. Any delays could prompt Fitch and Moody's to also downgrade Brazil to junk status. An impeachment of Rousseff would probably cause all three rating agencies to move; such act would surely cause more capital flight and pressure the currency further.
Why Brazil Matters
Brazil is a country of interest due to its bellwether status for emerging markets and its $300 billion in dollar-denominated debt.
If Brazil goes, other emerging markets could also get hit. A free fall in the Brazilian real could trigger defaults if dollar-denominated debt becomes too burdensome for Petrobras and others. Such defaults could leak into global bond funds, trigger margin calls or derivatives defaults for counterparties. According to hedge fund giant Bridgewater Associates, the impact is considered unknowable, which could cause a selloff in global markets until the risk is contained. Investors should avoid Brazil and the U.S. stock market due to the risk of a coup or protracted impeachment process.
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>>>the horrifying reality of interest rates explained in this leaked Fed Reserve manifesto
A 4th grade teacher could sink a whole classroom of kids, what's the point here?
Paul Krugman needs to pay them a visit and straighten them out.
Mary Kay LeTourneau tried that and it landed her in jail.
HERS PARTY RECEVEID MILLIONS FROM MONEY LAUNDRY TO BE ELECT EM 2014. SHE BROKEN SEVERAL LAWS ! CONGRESS WILL IMPEACH HER ACCORDANLLY CONSTITUTION LAWS, WHAT FUCKING COUP ARE YOU TALKING ABOUT ?
Isn't it amazing how easy it is to cover up graft and corruption when the markets are good.
Let things pull back and start to unwind and all the dross seems to come to the top and get exposed.
DaddyO
That's the way it always is DaddyO.
It's never identified as a "Ponzi" scheme until people start losing money.
Until then, everyone's happy to play along.
"I'm shocked, shocked, to discover that illegal gambling is going on here."
Socialism and its big brother Marxism, is not a political theory, but a disease. Every country that takes it up winds up either dead or crippled. We're well on our way to the same point, and while America will survive the United State is approaching a terminal state and things will get nasty.....
People realize that The US will be fighting Russia till the last Ukranian
People realize that The US will be fighting Russia till the last European
People realize that the US will be fighting Russia till the last Middle Easterner
People realize that the US will be fighting Russia till the last Latin American
http://thesaker.is/ukraine-sitrep-september-17th-2015-by-scott/
For those who want to play Brazil on the short side:
BZQ
And get crushed like all the other short sellers? Fucking markets are fixed.
kchrisc sleeps with the fishes.........killed by zion no doubt
Why do you say that? When you get deleted, all your comments go too, I think, and his are still here.
http://www.zerohedge.com/search/user_comments?username=kchrisc
the comments dont get deleted..........here is one from trav7777 from many moons ago.........
Wed, 02/10/2010 - 17:05 | 225537 trav7777'Look...I told the douchebags on TF this and I'll say it here: if YOU won't borrow, the gov't will do it for you. CREDIT MUST GROW'
Nah, his mom made him go get a haircut. He'll be back in a week or so.
Tabarel...
:-/
Brazil is an unintended victim of Obama's multispectrum war against Russia which involves driving energy prices down as far as possible in conjunction with Saudi Arabia.
Saudi Arabia driving down oil prices to $10 a barrel in the mid-1980s at the behest of the US is widely credited for the breakup of the USSR.
Think about how the Obama administration sees the state of the world. It wants Tehran to come to heel over its nuclear programme. It wants Vladimir Putin to back off in eastern Ukraine. But after recent experiences in Iraq and Afghanistan, the White House has no desire to put American boots on the ground. Instead, with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.
John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.
http://www.theguardian.com/business/economics-blog/2014/nov/09/us-iran-r...
The sons of bitches want to overthrow the Brazil but it is not easy.
A population that speaks the same language of north to south, east to west in more than 4.500Km.
No problem with climate, food and water left in most of the territory.
Corruption is minimal compared to WallStreet.
What was diverted Petrobras is equivalent to 60 minutes on company revenues.
If you give some shit, the Chinese will do with Brazil what they did with Argentina and Venezuela.
Lend letters from the US Treasury in exchange for commodities (smart solution for unloading worthless paper)
hehe.
This press invented by the political crisis does not affect the population that is aware of the shenanigans that comes from the US.
Make no mistake, the Brazilians have a sense of home that is very similar to the Russians (maybe even worse, given the hegemony of language - Portuguese).
Karaio:
Interesting taking, since you’re there.
But I will leave you with this quote. Wonder your take on these:
“The BRIC’S Bank is anti Petrodollar, not anti Money Power” -- Anthony Migchels
Slave Isaura:
There are several points here.
Interest rates in Brazil are exorbitant because the common Brazilian, when lending, paid if you can.
You have no shame in not pay the banks.
After 4.5 years, the debt is extinguished, it is the law.
It is common to hear: "I do not deny, paid when you can ..."
Kkkkkkkkkkkkkkkkkkkk!
Yes, the Bank of BRICS like money and even more so if it is backed by gold (which should take place once the US and Europe / Japan break).
Honestly, the big question is whether there will be a IIIWW before or after the break.
There will be a IIIWW is right and known.
that bank is to fund both infrastructure and capital needs
As in Central America, the expat (criminal) rich Chinese are leaving China to go to environs that are similar in climate and where the people look like them, restarting their businesses and importing their core labor, all with T-bills.. The Chinese know what they are doing. Obama does too and isn't going to stop it. The Fed needs to wake up as the labor force in America is getting to the point where is can't pay the repatriated T-bills and US bonds that are popping up in the States.
JustObserving,
You’re unequivocally and completely Observing these facts right.
America's exorbitant privilege (Charles de Gaulle) as it resulted in an asymmetric financial system where foreigners (Bretton Woods and Petrodollar) see themselves supporting American living standards and subsidizing American multinationals.
And below is another link that addresses this same issue:
https://www.youtube.com/watch?v=02F-3l1EKsA
Jeeebus, Brazilian oligarchs (think Petrobas) enrich themselves through crony-socialist government while real live socialists in government buy off "the masses" with outrageous social programs for their vote...and somehow it's my fault?
You fucking people are literally insane.
nmewn,
Most here just CAN NOT accept that we have an exponential population growth that the private sector can not generate enough jobs to.
So, if building Pyramids is what will take to keep job creation going, the governments will build Pyramids otherwise their population will replace them.
Food for Thought:
Usurious
'Look...I told the douchebags on TF this and I'll say it here: if YOU won't borrow, the gov't will do it for you. CREDIT MUST GROW'
“America’s elites know that capitalism is totally unworkable. We try to impose it in the 3rd world so we can destroy them” — Noam Chomsky
"So, if building Pyramids is what will take to keep job creation going, the governments will build Pyramids otherwise their population will replace them."
You have no economic issues with GOVERNMENTS "creating" jobs? It's impossible for PEOPLE to create jobs?
And Noam Chomsky is another socialist idiot, I don't know what he brings to the table as far as discussion besides being just another socialist idiot.
Please provide a graph of the exponential population growth of the Developed World. You can throw China in for laughs, as well.
You only talking about Third World growth?
Okay, please provide graph of growth of public works projects in these countries that generate employment.
The Brazilian government looted the natural resources entrusted to Petrobras. It would still be looting them if the downturn in oil price hadn't shown whose hand was deep in the cookie jar.
If Barack Obama is the man who put an end to this disgraceful, evil plundering, then he has earned himself one brownie point (for a change).
Your opinion appears to be that it is okay to rob the people so long as you create a few menial jobs picking up trash from the parking lot of the new corporate headquarters building.
Away with all the fascist cronies.
It's actually a war against BRICS, and the attempts to cripple BRICS and the rest of the world, as the way to preserve USd Hegemony. But the USd can't fight off and sink the whole world, I mean 207 countries are eligned with the BRICS, so it's kind of a stupid last gasp attempt to stay in power / money.
All the corruption and graft happens in the global banking cabal, it's not at the countries often chided for being "SOCIALIST". Rousseff is under assault same as Chavez... so the assholes who rob and pillage the globe, can get their mother fucking Goldman Sachs MAIDAN douche bags in control of the government.
I for one can't wait for the repurcussions, but I believe a treaty was signed, the US would abide by global financial terms, aka, Bretton Woods III, stop overthrowing foreign governments, and be more respectful, or else, the world would do the same to the USd.
The world told the US, stop the terrorism, and the sanctions, or expect the same, Karma is a bitch. Which is why, Cuba is now free, and Iran will soon be. You think there was a change of heart? What fucking heart? No, it was self-preservation... the world was about to Sanction the US and if they don't complete the process of stopping all the illegal global activities, the world will Sanction the US. That is why Kerry said, if we don't remove sanctions from Iran, the dollar will be worthless... he was talking about SANCTIONS against the US.
So don't believe all the crap you read, it's almost entirely propaganda, or self-delusion. The world is not as broke as most people here believe, the world is being robbed and maligned, the US and central banks and cabal are behind the lies. The world will be fine, and soon. Watch and learn.
The oil price is being driven down to cripple the cabal, the Rothschilds and their ilk. That's why the world is working in concert to lower oil prices... one way to collapse the derivatives too. Plus, it's a way to disassociate the world from the PETRO Dollar. Anyway, this is not OBAMA is bad guy, this is a global plan to free humanity, and it's intended to restore legitimate money, globally, which means, the Dollar has to have a realistic value against all the other global currencies.
Stop reading articles, and start connecting your own dots. All of you.
Must not be borrowing enough. Call GS for advice
austerity for the people, $1.7B for maggot Silva. i'll bet petrobras ceo is just fine too. the squid of course unloaded their highly touted brics garbage onto the pension funds long ago. same as it ever was...
Yeah, but they're good for soccer stadiums for a few decades.
"Rousseff - hand-picked by Lula da Silva to succeed him - appears to be caught up in da Silva's backdraft. Opposition parties also claim she violated Brazil's fiscal responsibility law when she doctored government accounts to allow more public spending prior to the October election last year."
Unpossible!!!
Part of her resume' claims she's also a socialist-economist! ;-)
Go for Gold in 2016! ... ... or brown.
http://www.globalpost.com/dispatch/news/regions/americas/brazil/140513/r...
http://www.slate.com/blogs/the_slatest/2015/07/30/rio_olympics_sewage_wa...
Yeah, the Toxic Butterfly event should be great!...lol.
A bit more recent.
http://heavy.com/news/2015/07/rio-de-janeiro-olympics-2016-raw-sewage-ap...
Rule #1. Don't shit where you eat.
Just lovely ain't it?
And here I thought Brazilians were Gaaarrreeen! ;-)
No, they're definitely brown.
And climate change is so much more important.
If Brazil is at junk status they should default and arrest their bankers before they get away.
The problems of Brazil are the problems of Socialist/Progressive/Marxist/Communist regimes everywhere; they are all the same. The problems are related to the individuals who identify and embody the above equivocal labels: they are carriers of defective genes that allow or engender the mental illness of Leftism. First, it never works. It defies gravity and human nature. The elite enrich themselves and power becomes the raison d'etre. Doctrine, usually academic, replaces observations and inductive reasoning-drawing conclusion by how the world works, like examing a clock and catalogueing the obvious.
Free Cheese-even at someone else's expense and through confiscation-is always appealing to the majority crowd. Except in Singapore.
"Doctrine, usually academic, replaces observations and inductive reasoning"
This is what happens when you think you can "create your own reality."
Everyone creates their own reality. We all reside in our own little universe. Usually, our reality synchs up with other people's to create consensus reality.
Thanks for the psychology tip.
I was referring to empires creating their own reality.
Corruption in Brazil you say?.... I'm SHOCKED, shocked I tells ya.
why do we have so many arseholes in charge of our countries?
She broke the constitution of Brazil by signing off The Belo Monte Dam project in Para, Brazil. I went to look at it - not one person on this earth, bar her, would have taken the journey down The Xingu River that I did, and agree to trash it. An amazing place, another planet, and she has fucked it up. It was a perfect example on a huge scale of what is wrong with this world. Trashing something immensely incredible that generations could enjoy, for a short term return of fiat shit currency.
I'd gladly chuck her in and watch The Black Piranhas eat her.... Take a while mind, or a lot of Piranhas.
MauritiosGold:
Do not talk shit you do not know.
Much cheaper to deploy a lake to plant in the Amazon today (just kick some Indians and settlers) that in twenty years old when farms are established.
The lake to generate electricity is a very expensive thing when you have to expropriate flooded areas.
You understand or need to draw for you?
SHE BROKEN SEVERAL LAWS ! CONGRESS WILL IMPEACH HER ACCORDANLLY CONSTITUTION LAWS, WHAT FUCKING COUP ARE YOU TALKING ABOUT ?
Dilma Rousseff is German...Google it...These migrants always destroy the country they go to...