Head Of Brazilian Central Bank Ready To Quit Amid Political Insanity

Tyler Durden's picture

It seems as though Brazil can’t get through a single day without some piece of political news or economic data creating confusion and turmoil.

Last weekend, millions of Brazilians took to the streets to call for the ouster of President Dilma Rousseff whose political career and legacy hang in the balance.

An impeachment bid tied to allegations she cooked the fiscal books in 2014 looms large and when the ever-expanding car wash probe ensnared former President (and Rousseff mentor) Luiz Inácio Lula da Silva, some assumed it was just a matter of time before Dilma buckled under the pressure.

But Rousseff had other plans.

Just as a Sao Paulo state judge said a decision on Lula’s arrest should fall to federal judge Sergio Moro, Dilma offered Lula a ministry position. In his new position, he plans to revive the flagging economy with what the market assumes will be a series of leftist policies. That explains why the BRL retraced all of the gains it posted when Lula was first detained.

Of course Lula himself denies that he would pursue policies that may harm the country's fiscal position. According to Valor, Lula’s plans wouldn’t include a shift to the left. Nor would they include expanding credit. Or rate cuts. Or tapping Brazil’s FX reserves. Or social security reform. In short, it isn’t exactly clear what they would include but whatever the case, “investors see risk of government resorting to an economic policy shift in a last-ditch attempt to save President Rousseff’s mandate,” Luciano Rostagno, chief strategist at Banco Mizuho do Brasil told Bloomberg in a phone interview.

And it’s not just investors that are unnerved.

BCB President Alexandre Tombini is reportedly “giving signs” that he may resign. “The possible nomination of Lula points to deep economic policy changes, with repercussions in monetary policy and FX policy,” Valor reported on Wednesday, explaining Tombini’s reservations about Lula’s new post. The BCB chief worries Lula may tap FX reserves and put pressure on Tombini to cut rates, Valor continues, without citing sources.

Apparently, Lula has already moved to replace him. According to Veja,"Lula has invited Henrique Meirelles to assume the central bank chief post.

Needless to say, this is all weighing heavily on the BRL:

Meanwhile, Senator Delcídio do Amaral - whose arrest in November unnerved markets and suggested sitting lawmakers are not in fact immune from investigation -  copped a plea-bargain and gave testimony which indicates that Rousseff knew of and tried to cover up bribery at Petrobras.

"According to the plea documents released Tuesday, Ms. Rousseff was aware of all the details of the 2006 purchase of an oil refinery in Pasadena, Texas. Prosecutors suspect Petrobras used the refinery deal to generate funds it allegedly used to pay for millions of dollars of bribes and personally benefit some Petrobras executives, according to the documents," WSJ recounts, adding that "Mr. do Amaral also alleged Ms. Rousseff pressured Justice Minister José Eduardo Cardozo to free jailed suspects caught up in the graft probe, according to the documents. Mr. Cardozo left his post in late February, saying he was weary of 'political and personal pressure,' without being more specific."

Amaral also says Rousseff's former chief of staff and current Education Minister, Aloizio Mercadante tried to pay for his silence, allegations which Brazilian weekly Veja says it can prove via tape recordings. Lula is also implicated in the testimony.

According to the latest, Lula is set to become Rousseff's Chief of Staff.

As you can see, this is a veritable circus. Throw in the fact that Lower House Speaker Eduardo Cuhna, the ringleader of the bid to impeach Rousseff, is himself facing impeachment for hiding Swiss bank accounts, and you have a political dynamic that is just about as poisonous as one could possibly imagine. 

We wish Brazil's beleaguered populace the best of luck in tossing the whole lot of them, because unless and until someone cleans house, the economic malaise is going to continue and the BRL will never have any lasting respite.

But not everyone is worried...

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Insurrexion's picture



Fucking Latins.

Too much sun on the brain.

DownWithYogaPants's picture

Let me defend the south of Brazil.  It is full of Germans and Italians and many in the past have thought they should have their own country.

( believe me I'd love that ! ) 

highly debtful's picture

Germans and Italians together? In one country? Really?
Next thing you guys are going to tell me is the Germans would be tending to the needs of the women, while the Italians would take charge of law enforcement.

No offence, Haus

tc06rtw's picture

 …  Amaral  isn’t taking any chances there might be lip-readers in the audience.

PrezTrump's picture

By that logic, the blacks and latinos should have their own country in america...

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Insurrexion Mar 16, 2016 10:40 AM

Bozo The Clown Red Number Six hair dye doesn't work for her.

skeelos's picture

Is it too late to change my plans for the Olympics?

Ghost of Porky's picture

With the dollar soaring your Zika virus treatments will be extremely affordable.

Ghost of Porky's picture

Women ruin everything.

HardlyZero's picture

Brazil and Venezuela and Argentina should just merge (since they are all on the same road) and then siesta for 10 years to get over the hangover.


Venezuela to Shut Down for a Week to Cope With Electricity Crisis


what's that smell's picture

zerohedge hates brazil because BRICS?....brazil, russia, india, and china.

leave brazil alone you lesser bitches of bloomberg!

for the challenged....lesser bitches = zerohedge.

org chart....1) karl marx 2) george soros 3) goldman sachs 4) bloomberg 5) zerohedge

get to hating!

Truth Eater's picture

The international disaster that will be the Rio Olympics will be epic.  First arrivers will call home (if they can get an outside line) and tell them not to come.

HardlyZero's picture

Will there be a quarantine established when they all try to Go Home ?

This is getting crazy with mosquitos and WHO Zika, Dengue, etc...in parallel with Olympics.

Like Japan's 2020 Tokyo and Fukushima.


venturen's picture

Hillary isn't looking so good in that first picture

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) venturen Mar 16, 2016 10:48 AM

That's "her" mistress.

yebach's picture

I'd posted this link yesterday in response to the same issue. I am again disappointed that Zero is not taking in to account the role of the Empire. For those interested please have a look. Thanks



PrezTrump's picture

maybe because you are buying into a flaming bag of bullshit

CookiePrince's picture

Here we go again...  Puppet master and professional regime changer George Soros is once again deeply involved here amongst others with his favourite tool Transparency.org whose propaganda news are eagerly adopted by the brainwashing national and international mainstream media without any criticism or verification.

Transparency.org is coincidentally also funded by the big US oil companies that are very hungry to get their hands on Brazil. A total disaster for Brazil will be when a new corrupt government (right wing PMDB, PSDB) will sell the country into TPP. 

And who got appointed as ambassador in Brazil by the Obama administration? Yes, Liliana Ayalde about whom wikileaks revealed her memos and significant role in the "golpe" of Paraguay 2012, also by a so-called impeachmente procedure. In other words the USSA ambassador is a "golpe"-impeachment specialist. 

Brazil is completely corrupt on all sides but the so-called "neutral" investigation wants to neglect the huge part of Lula's opponents PMDB & PSDB in the same corruption scandals. What Brazil needs is a complete political regeneration. But the issue here is a war on Brazil's resources and the independence of Brazil.

Another nice read but only in Portuguese for the real brazilians: http://thomasdetoledo.blogspot.com.br/2014/10/o-golpe-de-george-soros-co...


WTFUD's picture

Like Greece and the rest of the bankrupt EU vassals Goldman taught them everything they know.

Seasmoke's picture

The USD is crushing people. Time for it to be taken down.

Spungo's picture

Why do some countries have a culture of corruption like this? The US is nowhere near this level of fucked up, and the US is considered the most corrupt of the English speaking countries.

WTFUD's picture

Spungo, me Mungo.

Are you taking into account all of those frequent flyer coupons Timmy & Bernanke built up jetting all over the world to visit every Central Bank in order to shoo up the losses?

CookiePrince's picture

Dude, wake up. The USSA is probably the most corrupt country in the world with tentacles that reach to every corner of the planet. 

PerkyPooper's picture

Sad. I expected a Brazilian Wax photo

youngman's picture

No more bank Head...that will piss them off...go to a motel now I guess

Dazman's picture

I'm here because I saw "head" and "Brazilian" in the title along with a photo of a hot chick. Tease.

Pumpkin's picture

Oh.  I thought the redhead was the head of the central bank.  I was hoping for a trade.

SquadronVBF94's picture

First they ellect a corrupt socialist and the economy goes into the toilet. So then in order to fix that mess they elect a communist! Then the corruption clogged toilet backs up and there is shit every where.  And they still can't figure out what the problem is. Brazil; a nation of  Ernie Sanders voters. God spare us. 

CookiePrince's picture

First of all the so-called socialist made the Brazilian economy boom for over 8 years like no corrupt right wing president had ever managed to do before. Second of all the so-called communist is from the same party. At best you can call her a socialist. But in reality PT is just as left wing as the Tony Blair's Labour party... Not left at all.

The real problem in Brazil is corruption and a power struggle between nationalists like Lula and his opponents who want to sell Brazil to the USSA. 

Bazza McKenzie's picture

You are confusing Fed easy money and massive demand from China for resources with actual economic management in Brazil.

smacker's picture

It wasn't Lula who "made" the Brazil economy boom for 8 years. He simply rode on the back of a huge demand from China for minerals and soy etc. He should have used the income to improve Brazil's infrastructure but wasted much of it on buying votes among the lower classes with endless social programs. Same thing all socialists do. He did nothing to end the destructive corporatist culture that exists in Brazil whereby the big name corps gets import controls to stifle competition in return for political donations.

Brazilians suffer by paying thru the nose for anything and everything.

gdpetti's picture

Take a look at 'An Economic Hitman'... this scenario is a common one to destablize an opponent in our Western controlled marketplace.... S.O.P.