The Betrayal of Brazil

Michael Smith, Sabrina Valle, Blake Schmidt – BloombergBusiness, 05/08/2015

In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit cash. But Youssef had been spared serious jail time by testifying repeatedly against other doleiros, Brazilian slang for specialists in laundering unreported cash.

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The Betrayal of Brazil

Brazil real seesaws in volatile session

Reuters, 3/10/2015

The Brazilian real moved 1 percent up and down in less than two hours of trading on Tuesday as a combination of global headwinds and domestic problems made the currency vulnerable to wild swings.

The real opened more than 1 percent lower and hit 3.1722 per dollar, its weakest in more than 10 years, before erasing losses to rise more than 1 percent to 3.097.

It last traded at 3.1244, 0.2 percent stronger than Monday’s close.

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Brazil real seesaws in volatile session

Brazil’s Real Falls Most in Emerging Markets on Economic Concern

Paula Sambo – Bloomberg Businessweek, 11/04/2014

Brazil’s real led emerging-market declines as an unexpected drop in industrial production in September added to concern that President Dilma Rousseff will struggle to revive Latin America’s largest economy.

The currency weakened 0.9 percent to 2.5189 per dollar at 2:02 p.m. in Sao Paulo in the biggest drop among 24 developing nations. Swap rates, a gauge of expectations for changes in borrowing costs, increased 10 basis points, or 0.10 percentage point, to 12.49 percent on the contract due in January 2017.

The real also fell on wagers that Rousseff will appoint a finance minister who will maintain policies that helped lead to Brazil’s first recession since 2009. One-month implied volatility on options for the real, reflecting projected shifts in the exchange rate, was the highest among 16 major currencies.

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Brazil’s Real Falls Most in Emerging Markets on Economic Concern

Brazilian Stocks, Currency Plummet as Presidential Election Looms

Jeffrey T. Lewis and James Ramage – The Wall Street Journal, 09/29/2014

Brazil’s stock market and currency were sent reeling Monday by signs President Dilma Rousseff is pulling ahead of her main challenger in the country’s presidential election next month.

The Brazilian real weakened to its lowest level against the dollar in nearly six years Monday, declining 2.4% to 2.4777 reais, before paring losses to 2.4543 reais later in the day. The country’s benchmark Ibovespa stock index fell as much as 5% in early trading and was down 2.2% early in the afternoon.

Brazil’s losses were among the worst in a broad selloff that hit financial markets across the developing world. Developing economies have been caught up in fears the Federal Reserve is moving closer to raising interest rates, a move that would make higher-yielding currencies, such as those in emerging markets, less attractive to investors. Concerns about protests in Hong Kong have also sent investors into less-risky assets.

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Brazilian Stocks, Currency Plummet as Presidential Election Looms

Brazil financial markets sell off on election anxiety

Reuters, 9/12/2014

Brazilian financial markets added to losses on Friday after an opinion poll showed President Dilma Rousseff and competing presidential candidate Marina Silva statistically tied in an expected second-round vote in October.

Brazilian stocks and currency have been posting losses over the past few days on fears that Silva, regarded by investors as the strongest option to avoid four more years of a government they strongly dislike, would lose her lead in opinion polls.

On Friday, the Brazilian real weakened to as much as 2.323 per dollar, more than 1 percent weaker on the day, as the Ibope pollster said Silva had 43 percent of voter support in a second-round vote, only one percentage point ahead of Rousseff.

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Brazil financial markets sell off on election anxiety

Brazil’s Real Tumbles on Concern Rousseff Is Picking Up Support

Paula Sambo – Bloomberg, 09/08/2014

Brazil’s real declined the most in emerging markets on speculation voter polls will show increased support for President Dilma Rousseff as she seeks re-election amid a recession and above-target inflation

The real fell 1.1 percent to 2.2675 per U.S. dollar at the close of trade in Sao Paulo, the biggest drop among 24 developing-nation currencies tracked by Bloomberg. Swap rates increased 21 basis points, or 0.21 percentage point, to 11.23 percent on the contract due in January 2020.

The same tracking polls that correctly predicted growing support for opposition candidate Marina Silva are now showing a slight decline in her support, according to a report today by newspaper Folha de Sao Paulo. A new poll by CNT/MDA may be released tomorrow and three others could be released this week. Speculation that Rousseff will lose her bid for re-election amid a faltering economy has helped to push the real up 4.2 percent in 2014, the most inemerging markets.

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Brazil’s Real Tumbles on Concern Rousseff Is Picking Up Support

Brazil Real Climbs as Polls Seen Showing More Support for Silva

Filipe Pacheco – Bloomberg, 09/02/2014

Brazil’s real rose amid speculation polls that may be released tomorrow will show more support for former Environment Minister Marina Silva in a runoff election against President Dilma Rousseff.

The real climbed 0.1 percent to 2.2436 per U.S. dollar. Swap rates on contracts maturing in January 2015 increased two basis points, or 0.02 percentage point, to 10.80 percent.

Speculation that Rousseff will lose her bid for re-election amid a faltering economy has helped to push the real up 5.3 percent in 2014, the most among 31 major currencies tracked by Bloomberg. A Datafolha poll published Aug. 29 showed Silva would have 50 percent of voter support in an October second-round vote against Rousseff, who would have 40 percent backing. The survey polled 2,874 people and had a margin of error of plus or minus two percentage points.

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Brazil Real Climbs as Polls Seen Showing More Support for Silva