Brazil In "Dire Straits" As PMI Crashes To Record Lows

Tyler Durden's picture

“The Brazilian economic downturn took a real turn for the worse in February," according to Markit's Composite PMI, which collapsed to record lows at 39.0. Despite a slightly less bad than expected GDP print this morning (stil down a record 5.89% YoY), hope was quickly extinguished as PMIs showed economic activity continuing to contract at a record pace, job losses accelerating, and manufacturing's collapse accelerating. As Market sums up, "With the global economy also showing signs of slowing, which will impact on external demand, it looks as if the downturn is set to continue to run its course in the coming months."


GDP was a disaster (but better than expected)


“Slightly better than expected, but still a sizable contraction of the economy,” Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., said by phone. “There’s no indication of a recovery in the near-term.”

But then the more recent PMIs showed the pain is accelerating...


Commenting on the Brazilian Services and Composite PMI data, Rob Dobson, Senior Economist at Markit and author of the report, said:

The Brazilian economic downturn took a real turn for the worse in February, as the financial and political difficulties in the country drove down output and led to reduced order intakes. The domestic market is especially weak and this hit service providers hard, with activity and new business in this sector falling at survey record rates. The labour market also appears to be in dire straits, as manufacturers and service providers reported further substantial reductions to headcounts.


The hands of the authorities are largely constrained in terms of providing monetary or fiscal stimulus to push the economy out of recession. Business and investor confidence remain weak and the latest PMI shows that both input costs and output prices surged higher to add to the already high degree of inflationary pressure faced by the economy. With the global economy also showing signs of slowing, which will impact on external demand, it looks as if the downturn is set to continue to run its course in the coming months.”

Still there's always the feces-infested water and Zika virus - Olympics here we come...

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Squid Viscous's picture

so, $3 US for a hummer and $2 bottled water, I can live with that - Olympics here I come!

813kml's picture

Best hope the chica don't gotta the Zika.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) 813kml Mar 3, 2016 3:14 PM

Ahhh... the Brazil girl is back.

What's the article about?

pods's picture

Yeah but instead of getting a hot, bushless, big assed one you will probably get one like Carla from Cheers. 

Or Rosie Perez.

Nutsack's picture
Nutsack (not verified) pods Mar 3, 2016 3:42 PM

And yesterday's article questioned where the BOVESPA was headed?



It's going to test the 2008 lows (and then some).

Antifaschistische's picture

South America has Gold and Silver.  Brazil and a few other countries should come together to create a single metal backed currency.  Hire Blackwater to control any counterfeiting.   Argentina will eventually join out of total desperation.  Venezuela and Chile can join in the first round.  Default on all IMF/western world bank loans and start a fresh.

0b1knob's picture

A few months ago the "Things are terrible in Brazil and can only get worse" stories started.   At that time I said that that type of extreme negaive sentiment is typical of market bottoms in developing countries.   I bought some Braskem (BAK) and Cemig (CIG) at $9 and $1.30 respectively.   They are now $13 and $1.90 respectively.

Keep those negative stories coming!

Squid Viscous's picture

ZIKA! the fear monger disease du jour, lol!

what happened to ebola? spicoli's dad fixed it?

yovatti's picture
yovatti (not verified) Mar 3, 2016 2:55 PM

Nipples or it didn't happen.



Hohum's picture

Voce e "fucked."

minitrue's picture
minitrue (not verified) Mar 3, 2016 2:56 PM

Does "better than expected" mean squat when GDP is down almost 6%?

Raynja's picture

Please refer to the stock chart for JOY to answer your question.

PS where is the hot Brazilian chika

JustObserving's picture

The fall in oil is an orchestrated attack by the US and its major banks on Russia (along with Venezuela, Brazil, Nigeria, Iran, Mexico and many other oil-producing economies).  More than $3 trillion a year has been removed from the global economy ($60 to $70 trillion a year) - nearly 5% of world GDP.  This situation will not last for long.

Saudi Arabia is playing a major role.

The USSR collapsed when the Saudis reduced the price of oil to under $10 a barrel in the mid-1980s.

Now Russia is losing $1 billion a day in revenue due to lower oil prices

Brazil is losing $350 million a day in revenue due to the fall in oil prices.  That is more than 5% of its GDP.

The Oil Coup US-Saudi Subterfuge Send Stocks and Credit Reeling


U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war.

new game's picture

all while the demand side is sliding into recession/depression, which is a self fulfilling loop for oil dependant economies as they produce moar at ever lower prices, the ultimate act of a junkie as the last fix kills the dependent user...

boink.voink's picture

You are spot on, low oil prices was a calculated attack on oil producing nations challenging US hegemony, Iran deal & shale oil was a part of it, but Iran played it smart. As a result, what it has done is that it has exposed the rot in US economy itself which was being covered up by the unusually high petrodollar price.

Now that the rot has been exposed completely, you can patch it up all you want but the bleeding won't stop. USA wanted to break the back of BRICS and instead it ended up spilling its own guts wide open.

It is game over for USA, they have lost the battle and now you will see oil price rising to the level where Brazil, Venezula, Iran and Russia find it comfortable, while USA will keep on bleeding for the next 1 year with a slow grinding halt to its rigged economy and stock markets.

Escrava Isaura's picture



JustObserving: Brazil is losing $350 million a day in revenue due to the fall in oil prices.


Not sure where you get your information because Brazil never had oil surpluses. It still needs to import about 1 million barrels a day. In 2014, Brazil imported 144.2 million barrels of petroleum products.


The main problem in Brazil is that the economy is highly financialized and Brazil has no capital controls. It generates all kind of corruption, capital flight, and in many case, the money never makes there; it’s kept overseas. Chile, on the other hand, has capital control.

Bazza McKenzie's picture

So Russia won't be able to import so much from the US and Europe.  They'll just have to make things themselves.

For the US, that's called an "own goal" in soccer.

Aunty Christ's picture

is that why EWZ is up almost 7% today?

TLT's picture

No, its because a Brazilian senator decide to tell what he knows about the car wash scandal. Bovespa +4,5%, BRLUSD +2,5%.

Al Gophilia's picture

I fell out of the Stupid Tree hitting every branch on the way down. Fortunately the roll of razor wire at the bottom conveniently cushioned my landing, making the impact better than expected. Future looks bright.

Joebloinvestor's picture

Enjoy the Olympics!

insanelysane's picture

A new county named Refugee is sending a team.  You just can't make this shit up!


Villageidiot777's picture

International Summer Island Survivors from Greece.


It is going to be explosive show that they are organizing there.

hungrydweller's picture

Cut with the clickbait Tylers, or provide some resolution.

Opportunity Hunter's picture

Can I respectfully suggest maybe investors should now be buying Brazilian stocks? When you compare the media frenzy to price, this appears to be a great risk/reward set-up. My two cents. I can always be wrong.

The Count's picture

And still the GLOBO mindfuck network continues with their usual garbage collection of novelas, scantily clad women wearing plastic smiles and audiences singing along to any entertainer they get on stage.

What gets me the most is the attitue of most of their reporter that have the most irritating, patronizing behaviour ever seen.

Mr.Kowalski's picture

Whoh Tyler--- where is the pic of the Brazilian hottie in a thong ? Severely disappointed..

nakki's picture

Is this the same Brazil that defaulted, "restructured" their debt 9 times since 1902, and 5 times since 1961.

silverer's picture

Well, I guess Brazil is ready for war.