Real Soars To 6-Month Highs After Former Brazilian President Lula Detained

Tyler Durden's picture

The Brazilian Real has soared over 2.5% this morning after the shocking news that former President Luiz Inacio Lula da Silva (Lula) has been detained by the federal police. The long-running inquiry, known as Operation Car Wash, stems from accusations of corruption and money-laundering at Petrobras and police, who raided Lula's home near Sao Paulo, say they now have evidence that he received illicit benefits from the kick-back scheme with Petrobras "enriching himself and the treasury of his political group."


And the real is surging to six month highs on the news... (we presume optimism that corruption is really being cracked down on, rather than paid lip service)


As Reuters reports,

Brazil's federal police detained former president Luiz Inacio Lula da Silva for questioning on Friday in an anti-corruption and money laundering operation and said that illegal gains had financed campaigns and expenses of the ruling Workers Party.


Police said they had evidence that Lula received illicit benefits from the kick-back scheme at state oil firm Petroleo Brasileiro SA (Petrobras) (PETR4.SA) in the form of payments and luxury real estate.


"Ex-president Lula, besides being party leader, was the one ultimately responsible for the decision on who would be the directors at Petrobras and was one of the main beneficiaries of these crimes," a police statement said.


"There is evidence that the crimes enriched him and financed electoral campaigns and the treasury of his political group."

BBC adds that officials said some 33 search warrants and 11 detention warrants were being carried out by 200 federal police agents in the states of Rio de Janeiro, Sao Paulo and Bahia.

Lula's house in Sao Bernardo do Campo, near Sao Paulo, was raided early on Friday. The headquarters of his institute in Sao Paulo was also targeted, as were his wife, Marisa, and sons, reports said.


Dozens of executives and politicians have been arrested or are under investigation on suspicion of overcharging contracts with Petrobras and using part of the money to pay for bribes.

Lula ran Brazil from 2003 to 2010, when prosecutors allege much of the graft took place.

Brazilian media reported on Thursday that ruling party Senator Delcidio Amaral, a major legislative ally for Rousseff before he was arrested in November, allegedly tied the president and Lula to the scandal engulfing Petrobras in 400-page plea bargain made with prosecutors.

This latest step by the police is the most significant yet as the probe gets closer to Dilma Rousseff herself:

Lula, from the Workers' Party, served two terms as president and was succeeded in office by his political protege, Dilma Rousseff.


He led Brazil during a time of rapid economic growth and is credited for lifting millions of people out of poverty.


He still is a well-liked figure but his popularity has been hit by recent allegations that he either had knowledge or involvement in the wrongdoings.


On Thursday, Lula's institute said the former president had never committed any illegal acts before, during or after his presidential term.

The corruption scandal threatens the government of Ms Rousseff, who has faced repeated impeachment calls, analysts say. She has denied having any knowledge of wrongdoings.


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_ConanTheLibertarian_'s picture

Soaring Real makes perfect sense


KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) _ConanTheLibertarian_ Mar 4, 2016 8:01 AM

Well it's a damn good thing we have honest political families like the Clintons & Bushes to keep the US from ever being a Banana Republic!

VinceFostersGhost's picture



After Former Brazilian President Lula Detained


We should consider doing that here in America.


Do you want to be President.......are you sure?


If I were king for a day......half the Senate would be gone.


Kinda like that pilot of Flight MD 370.....where's everyone else.....I don't know.

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) VinceFostersGhost Mar 4, 2016 8:15 AM

Alexis Tsipras, are you paying attention?  This is you if you defy the IMF or the World Bank.

rejected's picture

Yea,,, makes ya proud, yes?

USA, Usa, usa....

geno-econ's picture

We also have Bidens son Hunter on the Board of Ukraines largest natural gas company teaching them "transparency".   Notice how honest they have become recently? Absolutly stamped out corruption.  Good job Hunter.

TeamDepends's picture

What? Graft, corruption, skimming, and kickbacks atop the socialist utopian pyramid?!?! Say it ain't so, Joe (Stalin)!

VinceFostersGhost's picture



Supposedly that was going to be the last chapter in Saul Alinsky's Rules for Radicals.


But unfortunately.....he died before he could write it.


So they just carted out the unfinished version.

Hans-Zandvliet's picture

Do you want to imply that socialism is bad, because a socialist president turned out to be corrupt?

Then what about the biggest heist in human history, committed by the capitalist banks of Wall Street (profits for the banks and losses for the tax payer)?

If, in spite of that, you're still so happy with your capitalist system, then may I congratulate you with one quarter of America's children not being able to enjoy three meals a day and half of America's young adults still living with their parents because they're up to their necks in student debts and can't find a job, get married and make their own living?

Ever read anything about how Gringo capitalism works? For example John Perkins' "Confessions of an Economic Hitman", or Naomi Klein's "Shock Doctrine"?

Make some balanced analysis first, before posting any farts!

Ghost of PartysOver's picture

Did the US export deceitful politicians to Brazil along with the financial catastrophe.  Whodathunkit.

BandGap's picture

Wait till they hire the turd skimming brigade in preparation for the Big O-limp-ics. Talk about an economic booooost.

J Pancreas's picture

Going after Lula is extraordinary; the man in many circles is revered there similar to Reagan here. It took a lot of balls to order that and I doubt he will go down without a fight. God bless the few honest men trying to clean house in Brazil because they have a long way to go.

Grandad Grumps's picture

Maybe it is the honest men trying to clean house. Or maybe it is simply a stab in the back of a former crony. I do not know enough to decide.

BarkingCat's picture

One mafia boss moving against another???

Huh Reeeally's picture

Either way, the result is probably a good thing, and it has the added bonus of shifting attention away from the economy, zika and summer olympics.

Budnacho's picture

Wow!....If Politicians getting arrested is good for the Economy.....and I'm from America....I think we just found our way to scalable growth boys!

Ghost of PartysOver's picture

Now that would be on serious sweat soaking, quivering, muscle crunching, euphoric wet dream come true.

MalteseFalcon's picture

"Brazil's federal police detained former president Luiz Inacio Spam Lula Hula Hoop da Spam Spam Spam Silva".

And that was after he changed it.

Element's picture

Hillarys Clintons bowel turns to ice ... then imitates a concrete pump ...

Grandad Grumps's picture

My experience from Brazil is that the government people are always looking for a handout. That is why the despachantes exist. They are a legal path for "expediting".

Being a US company, the problem is that once one goes outside the despachante legalized route one is still faced with hands extended palms up. And, if you pay once, you are screwed and you are labeled as a payer. You are now not only compromised, but you are subject to US FCPA legal troubles, if someone does not like you.

So, given the above environment and the understanding that grease rises to the top, the question is: Was Lola unique in some way or is he just someone convenient to distract from the real issues? In China he might be executed secretly so that he cannot spill the beans ... but I do not know if that is really true or only what we are led to believe. Maybe all of those publicized insider Chinese crooks are happy and living a nice retirement in Vancouver.

However, you may have been noticing a trend and that is an increasing propensity to portray the rich and powerful as corrupt, corrupting and UNDESERVING OF RESPECT.

Bangin7GramRocks's picture

How is any of this different than the U.S.? We just have a special laundering device called the "campaign account". Or we have "speaking fees". Or how about my favorite and yours, "book sales".

Grandad Grumps's picture

Yes and instead of despachantes we have lobbyists. I did not say the US is different.

... and I am skeptical about this being a real clean-up program. It is most likely just a circus and Lula and Rousseff are having drinks in the bar and playing footsy together. Although Brazilian men seem to have other men for theri "side action".

SirBarksAlot's picture

Personally, I prefer the "foundation."

It's international, tax free and more lucrative.

youngman's picture

Lets face it..if you are in power in are corrupt.....its everywhere there

SirBarksAlot's picture

That's what they get for starting the BRICS!

PTR's picture

Yeah it is.  It might not be a coincidence that the tax laws are so batshit to navigate. 

RandomAnglican's picture

If we only could jail Obama.

vegas's picture

Any chance we can get the Brazilian police to pick up Cabkles Clinton? All we got is a corrupt Justice Dept. & FBI that protect and coddle financial and political elites at the expense of the people they are supposedly work for. What a fucking joke justice is in Amerika.

Monetas's picture
Monetas (not verified) Mar 4, 2016 8:07 AM

With all the mixed economies .... there is a liars' paradise .... for leftists .... not that they need the cover ?

buzzsaw99's picture

politicians accepting bribes from corporations is a crony capitalist thing that's why nobody in the usa ever goes to jail for that. he violated socialist principles. subtlety is everything. get jobs for relatives, wait until you're out of office to take the money. call it a campaign contribution. hasn't the world learned anything from our maggots?

autofixer's picture

Is that the Lulu who was beloved by the Brazilian volken?  <sarcasm>  

Pumpkin's picture

Damn, I wish the US of A would start arresting ex-presidents.  I'm pretty jealous.

RandomAnglican's picture

By the way, I hope that Left pig Rooooseffyou goes to prison, too.

smacker's picture

Well, if she does there's a guy who may stand again for the Presidency: Fernando Collor de Mello.

He was impeached and thrown out early 90s for kick-backs etc al but is not barred from holding office again.

SirBarksAlot's picture

What do all these people have in common?

Sadam Hussein

Muammar Gaddafi

Hugo Chavez

President Lula




PTR's picture

They're coming to get you Bar-bara...

Make_Mine_A_Double's picture

Only a matter of time before they come for the Bolshevik whore Dilma.

She was honary chair of the board at PetroBas for Christ sake when the shakedown for full on.

Charles Offdensen's picture

No wonder Ol' Barry wanted to make this guy head of the world bank! Working on behalf of the poor dontcha know!

Berspankme's picture

Lula should have started a foundation like the Clintons

falak pema's picture


smacker's picture

Lula is a hard-Left socialist, previously a commie.

It goes almost without saying that he is corrupt.

His so-called achievements in office amounted to little more than riding the wave of a boom in demand from China for minerals and commodities.

He spent the money on make-work schemes and welfare, for those who don't like work but have a vote, aka buying votes.