Brazil Stock Market Halted After Plunging 10%: What Happens Next

Tyler Durden's picture

With Brazilian Bovespa futures already halted for trading earlier after crashing 10% at the open...

... the circuit breakers has moved to the cash market, where moments ago the Bovespa was similarly halted after crashing 10% at the open.

For those asking, here are the Brazilian circuit breaker mechanics:

Cash:

  • Rule 1: IBOV down 10% (60,786) triggers 30 minutes pause
  • Rule 2: IBOV down 15% (57,409) triggers 1 hour pause
  • Rule 3: IBOV down 20% (54,032) will be subject to Stock Exchange evaluation, likely it shuts down for the day

And this is how Brazil just erased all of the year's gains in an instant (and per the EWZ which is down -15%, more pain is coming once the circuit breaker unlocks).

Just before the circuit breaker was triggered, state controlled companies Cemig, Banco do Brasil and Petrobras fell 42%, 25% and 19%, respectively according to BBG. Banks Itau and Bradesco fell 18% and 19%, respectively, and JBS fell 15% as the Brazilian Bdloobath continued..

And even more dramatic chart is the 3x Levered Brazil ETF, BRZU, which was down 50% moments ago:

At the same time Brazil's default risk is soaring, as shown by the country's CDS>

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
hedgeless_horseman's picture

 

What Happens Next?

Next is destruction, but not just for Brazil.

There is the moral of all human tales;

'Tis but the same rehearsal of the past.
First freedom and then Glory – when that fails,
Wealth, vice, corruption – barbarism at last.
And History, with all her volumes vast,
Hath but one page...

https://en.wikipedia.org/wiki/The_Course_of_Empire_(paintings)


Max Damage's picture

Algo heaven for the fuckers, coming to a market near you

Haus-Targaryen's picture

If only we could see something as beautiful in American equities, or if I really want to turn myself on -- imagining that chart titled "10 year UST" 

Oh what a day it will be ... 

meta-trader's picture

she was a waitress in a cocktail bar now she owns a jet... http://bit.ly/2jdTzrM

Jason T's picture

Thomas Cole was very enlightened.

Buck Johnson's picture

I'll post a link to all 5 paintings, thank you for pointing me to this.  I've known about the cycle of empire but never knew that someone did a whole painting (consisting of 5) that shows it from morning to dusk.  They say it had to do with Coles pessimissm on Andrew Jackson and the Democratic party.  He may be right but it's not their vision.  You see I think no matter what govt. you have this cycle will happen regardless.  Right now I think we are at the Cosumation of Empire, the third painting.  Our "democracy"/republic was never truly one.  It was something they gave this knew land because they had to give them something.  And yet we or they did the same thing that they left the old world they hated. 

You see human beings keep doing the same thing because they believe it's different this time and it's not.  All empires from the beginning or later come to an end because it ages, gets fat, corrupt and think they are the exception.  You know your empire or society is going down when the public keeps talking about past but not learn from it for the future.

 

https://en.wikipedia.org/wiki/The_Course_of_Empire_(paintings)

 

http://www.ourrepubliconline.com/Author/21

LawsofPhysics's picture

"Full FAITH and Credit"

People of earth, get long sharecropping and guillotines!!!!

NugginFuts's picture

It's called a "Brazilian" for a reason. 

DownWithYogaPants's picture

Getting waxed or was that wacked.

Any way many beautiful girls in Brazil.  I could do worse.

shizzledizzle's picture

Coming soon to an index near you!

Thought Processor's picture

 

 

Spillover effects?  Leading indicator?  Deathnell for the Brazillian hairstyle?

 

I shall watch this one closely.

Kayman's picture

Remain calm and keep walking toward the barbed wire and machine guns.

lemontree2's picture

No problem. This is somehow bullish in my view. Off the lows.

Winston Churchill's picture

The BRICS became the RC, I'm sure its coincidental.

_ConanTheLibertarian_'s picture

The BRICS will soon be a pile of bricks.

peddling-fiction's picture

Remove the BIS, pun intended. Russia and China stay.

The CIA has succeeded with Brazil, India and South Africa.

I think Brazil will flip to the left though. And probably be back. We will see.

India is butthurt because of the China - Pakistan deal.

In South Africa they will be hunting whitey and going full Zimbabwe soon.

However China has invested massively in the rest of Africa.

 

Philo Beddoe's picture

Average Brazilian does not give a shit....yet. 

silverer's picture

What's interesting is if you "shut down" the market the way they did, it really screams the statement in a huge way the markets are controlled and manipulated. They do everything they can to stop the markets from correcting (because they know what they have now is NOT correct!) The average Brazilian, well... I don't know how well informed they are, but they should get out of the casino, now.

Pop3y3too's picture

Funny how that works. You can put in all you want but we won't let you take it out. No, no....that causes circuit breakers to trip.  You can check out any time you like but you can never leave?

 

Calm down. Just...take a deep breath while we craft an excuse to keep you around (Everything's FINE!! Go back to sleep.) and allow our buddies to get the hell out. 

 

We'll turn the breakers back on once we've properly exited.  Thanks ever so much for your patience, you've been a real dear!  Hope to see you in the next game.

 

Tah tah.

 

 

lemontree2's picture

Buy the dip. Buy oil. Sell gold, sell Silver . No problem . This is bullhishit.

To Hell In A Handbasket's picture

Fuck that whore and agent of Washington's agenda in Brazil, the corrupt Michael Temer. The Brazilian elite is corrupt to the core and not a nigger, or indigenous Indian anywhere near the top.

Brazil is run by a cabal of mega land owning oligarchs and a financial-media elite who have sucked on every teat Brazil has to offer for the last 3 hundred years at the very minimum. The World Cup and Olympic contracts were a fucking disgrace and despite his own involvement, Temer was at the forefront of the impeachment of Dilma Vana Rousseff, on the behest of Washington for corruption.

small axe's picture

time for the corrupt oligarchs to meet their fate, globally.

"It's a big club, and you ain't in it"...thank god

Kayman's picture

Fortunately it is a small club and the members are highly visible. Praetorian guards are protecting them.

silverer's picture

And history shows that eventually, the Praetorian guards fight amongst themselves. The "power" corrupts all.

Bank_sters's picture

Subprime is contained- the bernank.

rejected's picture

BTFD fools!

The bank is doing Gods work.

rejected's picture

They're busy re-programming the 'traders' as we type.

RawPawg's picture

Awesome to see they take this Trump Drama for what it really is

Hedge Accordingly

whatamaroon's picture

What about Brazillian wax?

Seasmoke's picture

Could never happen here. Can't think of a better reason to sell all Gold and Silver.

Seasmoke's picture

Winter is coming !!!

Sky flyer's picture

Glad this brought the US markets up. Now we need to launch a military strike on someone to hit ATHs.

Catherine2007's picture

Already. "US Coalition Jets Strike Assad Convoy In Southern Syria" (ZH MAY 18, 2017 12:59 PM)

Fake Trump's picture

Very contagious like WannaCry. Wall Street is next. Yellen has said that...don't expect the FED to bail them this time.

underthevolcano's picture

Who's saying sell silver and gold. Are you fucking nuts or what?

poland spring's picture

Normally I am a bearish type of guy but couldn't help myself.  I had to scoop up some BRZU at $23.65 (small amount just couple hundred shares).  Brazil is not going to go caput.  I love this type of emotional sell-off.  Not often you can buy a 'country' @ 50% off...

silverer's picture

You need to add Janet's Yellen to your financial team. Loud and clear?

franzpick's picture

"Steady  As She Sinks", under the weight of worthless financial cargo loaded into the hulls of CB ships of state worldwide.