Visualizing Brazil's Economic Decline In One "Straight-Line" Chart

Tyler Durden's picture

As we kick off the new year, there is perhaps no more tragic economic story than that of Brazil.

Once an EM darling, Latin America’s largest economy fell off the deep end in 2015 as a perfect storm of falling commodity prices, depressed demand from China, a soaring dollar, a devalued yuan, and an intractable political crisis plunged the country into what even the sellside has begun to acknowledge is an outright depression.

Inflation is running in the double digits and the country is facing an unemployment crisis which is bad news for an economy in which consumers have levered up in recent years to finance a middle class lifestyle.

Meanwhile, President Dilma Rousseff is battling for her political life as House Speaker Eduardo Cunha presses ahead with an impeachment bid even as he faces his own set of problems tied to the Car Wash investigation. Finance Minister Joaquim Levy was shown the door after political gridlock left him unable to implement much needed austerity measures. The market is concerned that his replacement, Nelson Barbosa, is less inclined to fiscal responsibility despite his best efforts to convince investors and ratings agencies otherwise.

In short, everything that could go wrong in 2015 did go wrong - and then some.

Things aren’t looking too good for 2016 either, a year in which Rio is set to host the summer Olympics. Brazil’s economy will contract more than previously forecast and is heading for the deepest recession since at least 1901 as economic activity and confidence sink amid a political crisis, a survey of analysts showed,” Bloomberg writes, adding that “Latin America’s largest economy will shrink 2.95 percent this year, according to the weekly central bank poll of about 100 economists, versus a prior estimate of a 2.81 percent contraction.”

The analysts, Bloomberg continues, “lowered their 2016 growth forecast for 13 straight weeks and estimate the economy contracted 3.71 percent last year.”

Have a look at the following chart which depicts the median market expectation for 2016 GDP. As you can see, analysts were continually forced to reassess the situation as conditions continued to deteriorate throughout the year. Needless to say, this is one scenario where the "trend" is most assuredly not anyone's "friend."

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Bonus: the full Brazil GDP chart treatment courtesy of Credit Suisse



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Cognitive Dissonance's picture

So does this means the Olympics are cancelled?

<I'm dancing swimming in the rain feces, I'm......>

Haole's picture

Who cares, I wouldn't mind scoring an apartment on Ipanema, Copacabana or Barra at pennies...

 

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Eeyores Enigma Jan 4, 2016 4:34 PM

The Olympics will change EVERYTHING for the better! Just like GREECE!

sprintjump's picture

I'm buying Brazilian Real now, and gonna clean house when I get to Rio, in August.

Yes, prices will be jacked up, but I bought, and will keep buying as the BRL heads lower.

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) sprintjump Jan 4, 2016 5:08 PM

On my first trip to Brazil (in fall '87), I had some 'Cruzado's, (which were worth about $40 USD) when I was leaving the country. I had already scheduled a return for March '88 (only 6 months later), so I said, 'Meh, why bother'?

 

The 40 bucks in Cruzados were worth about one US nickel when I got back.

 

True Story.

SethDealer's picture

olympics are for nation building. haha

BiPolarFrenchman's picture

I'm swimmin' in the shit,

Swimmin' in the shit,

What a glorious stinking,

thanks to fed gov-mit...

 

I'm here all week

Kirk2NCC1701's picture

Are they still another BRIC in the wall?

T/h to one of my 3 all-time fave bands. Along with The Eagles.  Used to love U2 also, but their two-faced Hypocrisy-For-Cash got to me.

ebworthen's picture

PPT working furiously in the last half-hour.

Don't get blisters boys!  No wait...

Soul Glow's picture

Offering to China -

Asking for them not to dump tonight.

NEOSERF's picture

The real question seems to be, how many countries need to go into Depression before the Fed, GS, and JPM allow the marionette doll we call the stock market to actually reflect reality.  By all accounts 1M refugees into Europe which was barely above water to begin with along with Brazil, South Africa, Angola, Russian, Middleast burning, Shale gas states who provided all the growth in the US the last 5 years in reverse, China, Australia, Canada, Korea...total worldwide disaster yet the US stock market continues along blithely ignoring reality...really is a marvel to behold.  Hungary, Sweden, Belgium, Portugal, Spain, Italy are a mess that can't be fixed and yet here in the US, apparently nothing affects our economic output...happy times, think I'll put a pool in the backyard this year.

upWising's picture

Here, let me help you with a new Acronym.  It will make everything clear.

The PIIGS ::  Portugal Italy Ireland Greece Spain   [all with governments allegedly courting fiscal collapse]

The PRICKs :: Puerto Rico, Illinois, Connecticut, Kentucky  [all with governments allegedly courting fiscal collapse]

Escrava Isaura's picture

 

 

NEOSERF: The real question seems to be…. 

 

US political and private power runs the world. Only 6 people know, and can articulate this fact. Noam Chomsky is one of them. The other is George Carlin: It's a big club and you ain't in it.”

https://www.youtube.com/watch?v=cKUaqFzZLxU

 

 

 

nmewn's picture

"Doze mean ole eeebil muricans made me do it!" - Dilma Rousseff...lmao!

Miffed Microbiologist's picture

Dearest, we are white and therefore inherently evil and responsible for the problems of the world.

Someday I hope the microaggression from our very existence will reach a resonant frequency and their heads will explode in unison. Maybe we can coerce them to crawl into an airtight Faraday cage as an only escape for this phenomenon.

Miffed;-)

Kprime's picture

just don't try to buy water for it

youngman's picture

GDP down...now just wait for all those apartment loans and car loans to come due.....and the credit cards are maxed out....

Squid Viscous's picture

hot mamacitas pics next time , please

roadhazard's picture

If I had free tickets I would stay home.

commishbob's picture

This post is worthless without the clickbait.

JohninMK's picture

A rarely missed opportunity.

Make_Mine_A_Double's picture

It's so bad even BRZ beaver shots are difficult to come by.  

Nick Jihad's picture

When times are good, they nurture a bigger welfare state. When times go bad, that welfare state will devour them.