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Inflation Soars To 12-Year High In Brazil As Supreme Court Jumps Into Impeachment Fight
On Tuesday, we highlighted what WSJ called an “extraordinary” turn of events in Brazil’s ongoing political crises.
An angry letter penned by VP Michel Temer was published in its entirety by virtually all local media, in what amounted to a very public display of Temer’s disaffection with embattled President Dilma Rousseff. Over the course of some 1,000 words, Temer accuses Rousseff of everything from demeaning the position of the Vice President to deliberately excluding him from a meeting with Joe Biden on the way to concluding that the Brazilian President does not and never will trust the opposition PMDB (of which Temer is a member).
Gabriel Petrus, a political analyst at business consulting firm Barral M Jorge told Bloomberg that Temer is “opening the door for a possible break with the government,” and although “he may not be actively promoting impeachment, this could well heighten the chances of her ouster."
We went on to outline the impeachment process before speculating on how the market would react to a variety of political outcomes.
Rousseff got some respite late Tuesday when the Supreme Court suspended impeachment proceedings pending a December 16 debate on their constitutional validity and an examination of a controversial house vote that nearly caused yesterday’s session to “collapsed into chaos,” as Reuters puts it.
“The Communist Party of Brazil, a small party in Rousseff's coalition, raised the constitutional issue in an injunction filed last week,” Reuters goes on to report, adding that “the injunction said a 1950 law laying out impeachable crimes by a president was not compatible with Brazil's 1985 constitution.”
The court says it’s attempting "to avoid acts that could eventually be invalidated.” Rousseff appointed Justice Luiz Edson Fachin who made the decision.
Of course as with all things Brazil, there’s no telling who this actually benefits and it is thus impossible to determine how the market “should” react. The “delay may be seen as positive to the opposition, which prefers to push proceedings further into 2016 as economic deterioration outlook may further hurt Rousseff’s support,” Bloomberg’s Davison Santana writes. In other words, the longer this takes the better, because the economy is only going to get worse in the meantime which reflects poorly on Rousseff, increasing the chances she gets the boot and thus calming markets - or something.
While we’re not sure that longer is actually better here given that Speaker Eduardo Cunha’s fate hangs in the balance, we certainly agree that the economic situation is set to deteriorate further and on Wednesday, we got a look at full-month IPCA which showed annual headline inflation jumping 10.48% Y/Y. This wasn’t exactly a surprise. Mid-month we got a 10.3% print and the country has been stuck in stagflationary nightmare for the better part of 2015. Still, the number is “disquieting” (to use on of Goldman’s favorite adjectives for abysmal data out of Brazil).
Here’s Goldman’s take on Wednesday’s data:
IPCA inflation accelerated to a higher-than-expected 1.01% in November, up from 0.80% in October and 0.85% in the mid-November IPCA-15. Annual headline IPCA inflation accelerated to 10.48% yoy, up from the October 9.93% full-month IPCA reading.
Inflation has admittedly been under pressure from the large increase in a number of administered prices, but we stress that despite the ongoing recession and labor market deterioration, inflation in the set of freely determined prices is tracking at a high 8.3% yoy (up from 6.7% in December 2014) with services inflation sticky above 7.5% for four consecutive years.
We expect annual headline inflation to end 2015 in double digits (10.6%).
In short: inflation is at 12-year highs just as GDP is collapsing and unemployment is soaring.
As we've documented extensively, Copom's hands are tied. When you've got double-digit inflation, you can't very well cut rates to boost the economy especially when the full effect of the BRL's decline hasn't yet worked its way through to prices.
In fact, today's IPCA print virtually ensures a hike in January and probably another in March. "Above-est. CPI released today reinforces expectations that BCB will need to resume rate increases to take Selic to 16.25% from current 14.25%," Daniel Weeks, chief economist at Garde Asset Management, told Bloomberg via phone.
What could be better? Collapsing GDP, double-digit inflation, rising unemployment, an intractable political crisis, and double-digit interest rates. This isn't even a "sub"merging market anymore. We're back to "frontier" status in Brazil.
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Inflation? Who would have thought?
Thank you, Tyler for realizing any article about Brazil requires at least one hot chick picture. You can lose the picture of that old bag up top, though. Don't need to see that, don't care what the president of Brazil looks like.
All I ask for these days is Ringling Bros. finest and some damned tasty bread. The moar hot chicks the better.
We shall call her cowbell.
Hey America, want to see where you are headed with socialism and multiculturalism?
I give you Brazil.
Thanks, I already got one. But I would give your eye-teeth to find out how ZH gets all these pics of my ex wives...
Today I have become Muslim. And as a Muslim I shall have a harem. And my harem will consist of smoke'n hot Brazillian babes. Life is gonna be good!
I sure hope you're not talking about the soccer babe. She's the only reason I clicked on this article.
I could arrange for you to meet her, for a modest fee of course. Please send $ to Iwannahotbrazilianchickforbreakfast@poontang.ca
And as your moniker suggests, serious gentlemen only need apply.
(For the mentally challenged among us: the link is a fake and intended for humorous porpoises only)
That link redirects to:
wegetyouseventyvirginsforever@weebeeisis.com
who doesn't like a good hot chick wing
Way better than before when they had a hot girl picture to get you to click on the article, only to be disappointed with a picture of the old bag only....moar cowbell indeed
they never saw it coming
For the Hypocrite Left Ill just leave this right here...
Hypocrite Obama ordered a 6-month pause in processing Muslim 'refugees' in 2011
http://www.americanthinker.com/blog/2015/11/hypocrite_obama_ordered_a_6m...
Gee is that a " Ban "
Again lunatics...
Can we ban all Muslims while Obama is outside of the United States of America? That would be some funny shit.
i second.
Yay, I can afford a Brazil chick now! Babe in yellow, we's going on a date....my treat!
With my luck though, all I'll get is a Greek chick in my stocking...
Remember, hairy women need Love too...
Alright...a jar of olives and a brush in that stocking too.
They love to put a woman on the throne right before the tidal wave strikes.
Or else these witches are really good at summoning disaster.
Your pick.
//s//
Angela Merkel
Cristina Kirchner
Dilma Rousseff
Hillary Clinton
Janet Yellen
That Australian Cow, whatshername
You forget the orange demon.
That's a man, baby.
https://www.youtube.com/watch?v=WgOIEGz7o_s
I'm not so sure most of them qualify as women..., just sayin.
No, you have to be human to be a woman.
or the token half-black, CIA fraudster
(does misceginatin' with 'em count? i.e. Warren Wilhelm, aka Bill DeBlasio)
They say a woman gets a top job only if no man wants it.
Uh oh....Hitlary is in the cue...
Of course I would think Odumbo would qualify as a woman on the throne...he looks way less manly than Merkel.
I pick summoning disaster since it always seems to crop up when they land in office......
Standard sequence : Inflate the fiat, people stop buying you bonds after a while, and then you have to print money at the same time the real interest rates go through the roof and your economy stops.
https://thinkpatriot.wordpress.com/2015/10/27/ignoring-the-absolutely-in...
Fortunately for the US, our Keynesian engineers are the best, so we don't need to worry about it happening here. People will go on loaning the US money even knowing there is no possibility of it ever being paid back because we are special, and defenders of the Free World.
Brazil got screwed by Obama's war on oil to hurt Putin. Obama's war costs the Brazilian economy about $100 billion a year in revenue for lower prices for their oil and ethanol.
O&G will be in abundant supply until >2026, when Neptune leaves Pisces
Not necessarily, world wars are very energy intensive.
Now picture this headline;
"China announces that all dollar-dominated debt in Brazil has been forgiven, opens new line of credit at international bank."
Boom motherfuckers...
TRADE is the only thing that matters and nobody wants all those "financial products" america is making...
Can Star Wars improve investment skills? http://www.decisiveinvesting.com/blog/general-en/3-scenes-from-the-stars-wars-which-may-improve-your-trading-skills/#more-604
In other news, young Brazillions just don't give a shit
Neither do young americans.
Breaking News:
Obama cannot find Brazil...
He's still trying to figure out how many States there are.
But his secret service detail remembers it well...
Porra! Ela é puta, feia, chata, metida, nojenta. Fodeu...bye bye Brasil
and Funny today is the UN Day of Corruption.....you go Brazil....
TL;DR.
Is it a before/after cosmetic surgery ad ?
If she gets "booted"...Who takes her place?..Do the BRICS become the RICS?
Hard to tell exactly what's really going on...China in the IMF Basket?! Something's not making sense here.
It all boils down to what China's real intentions are...Crazy world and getting crazier. Aliances are put to the test...
China/Russia do militarily and economically counter US/NATO...Without China, Russia is much much weaker...
Either way, more war, death, and destruction cming down the pike.
Only 1 pretty girl and that ugly Merkel looking president...more pretty Brazilian girls Tyler
Here Here... for every pic of the Dilma Donkey, you owe us two pics of Impanema girls :-]
Keep up bashing of Bazil. Right, it will be taken down, all countries will. However, some regions may survive - here is to Santa Catarina, Brazil - http://visa4brazil.com/
"In short: inflation is at 12-year highs just as GDP is collapsing and unemployment is soaring."
The misery index is back with a vengeance!
I wish our cost of living was exploding at 12 year highs. We should petition the government to pass some kind of law that doubles the price of prescription drugs.