Brazil: Lula Favored in 2018 Election, Temer Tanks at 5%

Telesur, 07/27/2016

Suspended President Dilma Rousseff´s predecesor, former Brazilian President Luiz Inacio Lula da Silva,–popularly known as Lula–   is the favored candidate for the 2018 presidential election, while “interim” President Michel Temer trails far behind with just 5 percent, according to a new Datafolha poll commissioned by the Globo newspaper.

The poll, of 2,792 respondents conducted between July 14 and 15, found that the former labor leader and Workers’ Party founder Lula leads voter preferences with 22 percent, followed by the Green Party’s Marina Silva at 17 percent. Silva finished third in the 2010 preisdential election.

Lula has expressed interest in running in the 2018 election, saying that the more he and his ally Rousseff are attacked, the more likely he is to run.

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Wall Street Has Moved On From Brazil’s Political Crisis

Kenneth Rapoza – Forbes, 07/11/2016

Wall Street is looking forward to the day when Brazil’s economy turns the corner. They believe it happens in 2017. Wheels are in motion.

What is clear is that U.S. investors have moved on from the political crisis, but have not completely ruled out a return of ousted leader Dilma Rousseff. Nor are they expecting miracles from her vice president Michel Temer, who will be the official president once the impeachment is settled later next month.

The first catalyst for change was the December 2015 approval of the impeachment process against Dilma in the lower house. Once that date was settled, for mid-April, markets rallied. Regardless of the political drama behind the impeachment, investors see Dilma’s ouster as the trigger. That first shot was fired in December. The next one will be in August.

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Brazil’s Temer To Make China First Official Visit Abroad

Lise Alves – The Rio Times, 07/11/2016

SÃO PAULO, BRAZIL – If suspended president Dilma Rousseff is impeached from office in August, Brazil’s interim President, Michel Temer, plans to take his first official overseas trip as leader of the country in September to China, Industry and Foreign Trade Minister Marcos Pereira announced over the weekend. Temer’s main goal is to boost Brazilian exports to the Asian country, especially of aircrafts and beef.

Last year, during Chinese Prime Minister Li Keqiang’s visit to Brazil, the two countries signed investment agreements worth US$53.3 billion to be made by Chinese companies in Brazil in the areas of agribusiness, auto parts, equipment transport, energy, railways, highways, airports, ports, storage and services. Now Temer wants to increase the presence of Brazilian products in China.

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Brazil’s suspended president denounces indictment as a ‘political farce’

Reuters/The Guardian, 07/06/2016

Brazil’s suspended president Dilma Rousseff has told the senate commission considering whether to permanently remove her from office that the case against her is a farce, arguing that her alleged misdeeds were no more than “routine acts of budgetary management”.

In a letter to the commission read by her lawyer on Wednesday, Rousseff also promised to fight to carry out her mandate until the end of 2018.

“Everybody knows that you are judging an honest woman, a public servant dedicated to just causes,” she said. “I’ve honored those who voted for me.”

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Brazil Congress Investigates Lawmaker’s Alleged Support of Torture

Reuters/The New York Times, 06/28/2016

SAO PAULO — Brazil’s Congress on Tuesday opened an ethics investigation into Jair Bolsonaro, an outspoken lawmaker whose views on torture, rape and homosexuality are sparking concern that the country’s political crisis may foster an authoritarian political revival.

The ethics committee of Brazil’s Chamber of Deputies, the lower house of Congress, will try to determine if Bolsonaro, a former Brazilian Army paratrooper, broke parliamentary decorum when he prefaced his vote in April to impeach President Dilma Rousseff with a speech praising Army Colonel Carlos Ustra.

Courts have found Ustra, a notorious Army intelligence officer during the 1964-1985 military regime, responsible for torture. Rousseff, a former left-wing insurgent, was tortured by Ustra’s Army intelligence unit.

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Brazil’s Temer says women should retire earlier than men: paper

Caroline Stauffer – Business Insider, 06/25/2016

SAO PAULO (Reuters) – Brazil’s interim President Michel Temer told local newspapers women should retire earlier than men, explaining why he did not support making a potential minimum retirement age equal for both sexes as his government tackles pension reform.

“A little difference is reasonable,” Temer said according to an interview published in O Globo newspaper on Saturday. “The woman, in addition to outside work, does the inner work in the home, she is a mother, etc., sometimes cares for siblings.”

Former Vice President Temer took over from President Dilma Rousseff, Brazil’s first female leader, after she was placed on trial in the Senate for breaking budget rules last month. Impeachment proceedings are due to conclude in August.

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Latest Brazil Study On Impeachment Unlikely To Save Dilma

Kenneth Rapoza – Forbes, 06/27/2016

A technical report into whether or not Dilma cooked the books on fiscal accounts in 2014 turned out in her favor. Come to find out, she did not push forward accounts, but still — according to one Brazil economist I spoke with — did commit crimes of fiscal responsibility. That will still be for the Senate to decide when suspended president Dilma Rousseff goes to trial at some point in late July, early August.

What appears clear for Brazil watchers is that the back and forth of corruption allegations and now this latest study suggests that if the country was a chicken, it would be running around with its head cut off. It’s not very appealing except for the hungriest of vultures looking for a cheap meal.

Hedge funds that like regime change politics are watching the political play-by-play closely. The latest study might have moved the needle against impeachment, though 60 senators are still expected to vote for her ouster.

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Brazil Is Back to Pre-Junk Levels as Swaps Traders Bet on Temer

Julia Leite & Paula Samba – Bloomberg, 06/27/2016

Brazil is winning over derivatives traders as Acting President Michel Temer seeks to repair the nation’s finances.

The cost to hedge against losses in Brazil’s bonds with credit-default swaps has tumbled by almost a third in the past six months, the biggest drop among the world’s major economies. Prices of the swaps are also now back to levels that prevailed before S&P Global Ratings cut the country’s rating to junk in September.

The turnaround is part of a rebound in Brazil’s financial assets this year fueled by the removal of President Dilma Rousseff from office while she faces an impeachment trial. Since taking the reins last month, Temer has proposed spending caps to help shrink a near-record budget deficit and struck a deal to ease a fiscal crisis roiling Brazilian states amid the longest recession in more than a century.

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Brazil Update: One Month into a Michel Temer Government

Luisa Leme – AS/COA, 06/17/2016

It’s just over a month since Brazil’s Senate suspended Dilma Rousseff for 180 days to hold an impeachment trial. Since then, the government of interim President Michel Temer has chosen a path that focuses on cutting spending on social policies to improve the country’s fiscal situation in the hopes of recovering investors’ trust. Temer took office May 12 and introduced an economic team led by Finance Minister Henrique Meirelles, who promised to “save the country” from its crisis while preserving Brazilian institutions and anticorruption efforts.

But many of the interim government’s decisions have been met with a backlash from voters, the judiciary, and even its own team. Temer not only picked an all-male cabinet, but 15 of the 26 ministers he selected face criminal investigations, with nine of them linked to the Lava Jato corruption scandal.

On top of that, two ministers had to leave their posts afterleaked recordings revealed they planned to use the impeachment process to halt corruption investigations, while the tourism minister resigned today due to links to Lava Jato. Temer himself was also linked to Lava Jato after the former president of the state-run oil transportation company Transpetro accused him of asking for kickbacksfor a mayoral candidate of Temer’s Brazilian Democratic Movement Party (PMDB). The São Paulo electoral court declared Temer ineligible for future office, based on the country’s clean record law, as he was convicted of exceeding donation limits for political campaigns.

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The Political Future of Brazil’s ‘Frank Underwood’

Marina Koren – The Atlantic, 06/15/2016

Two months ago, Eduardo Cunha was leading the impeachment movement that would temporarily unseat Dilma Rousseff, banishing her to the presidential palace to prepare for a trial while her vice president took over her job. Now, Cunha is facing his own fight for his political future.

Brazil’s congressional ethics committee on Tuesday voted in favor of removing Cunha from his seat in the Chamber of Deputies, the lower house of Brazil’s congress. The decision arose from corruption allegations against Cunha, a member of the now-ruling Brazilian Democratic Movement Party (PMDB) who has been described as Rousseff’s “political nemesis.” In May, just one week before Rousseff’s decisive impeachment vote, the country’s Supreme Court suspended Cunha from his position as speaker of the house, at the request of the attorney general, for using his high-ranking role to obstruct ethics committee hearings and intimidate lawmakers.

Cunha said he would appeal the decision to another congressional committee. The full chamber will now vote on the ethics committee’s recommendation, which would require an absolute majority of members—257 of 513—to pass. If legislators vote to kick Cunha out, the chamber would hold elections for a new speaker; Waldir Maranhao, a member of the Progressive Party and a Cunha ally, currently holds the position on an interim basis. And Cunha, dubbed the “Frank Underwood of Brazil” by Western media for spearheading House of Cards-esque impeachment proceedings, would be barred from running for political office for eight years.

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