Thursday, 17 March 2016

3.6 Million People Take To The Streets in Brazil

Compared to the political/economic rollercoaster in Brazil, House of Cards is kindergarten play."
---Pepe Escobar

Unrest in Brazil: Fight against corruption or colour revolution?

Demonstrators attend a protest against Brazil's President Dilma Rousseff, part of nationwide protests calling for her impeachment, in Sao Paulo, Brazil, March 13, 2016. © Nacho Doce

This video is from Luke Rudkowsky. Are we talking about a popular revolution against a corrupt regime or is this a color revolution organised from the Empire?

Brazilian, Pepe Escobar is a voice that I would trust.

3.6 Million People Take To The Streets, Demand Revolution In Brazil

Prime Minister’ Lula: The Brazilian game-changer
Pepe Escobar

Former president Luiz Inacio Lula da Silva and Brazilian President Dilma Rousseff. © Reuters

16 March, 2016

Compared to the political/economic rollercoaster in Brazil, House of Cards is kindergarten play.

Only three days after massive street demonstrations calling for the impeachment of President Dilma Rousseff, and less than two weeks after his legally dubious four-hour detention for questioning, former Brazilian President Lula is about to spectacularly re-enter the Brazilian government as a Minister, actually a Super-Minister.

This is Rousseff’s one and only chess move left amidst an unprecedented political/economic crisis. Predictably, she will be accused on all fronts – from comprador elites to Wall Street - of having abdicated in favor of Lula, while Lula will be accused of hiding from the two-year-old Car Wash corruption investigation.

Lula and his protégé Dilma had two make-or-break, face-to-face meetings in Brasilia, Tuesday evening and Wednesday morning, discussing the detailed terms of his re-entry. At first, Lula would only accept a post in government if he becomes Government Secretary – in charge of political articulation; he would then be part of the hardcore hub that really decides Brazilian policy.

But then, according to a government minister, who requested anonymity, surged the suggestion of Lula as Chief of Staff – the most important ministry post in Brazil.

What’s certain is that Lula is bound to become a sort of ‘Prime Minister’ – implying carte blanche to drastically change Dilma’s wobbly economic policy and forcefully reconnect with the Workers’ Party’s large social base, which is mired in deep distress under massive cuts in social spending. If Lula pulls it off – and that’s a major “if” - he will also be perfectly positioned as a presidential candidate for the 2018 Brazilian elections, to the despair of the right-wing media-old elite-economic complex.

Lula’s next role, institutionally, will combine coordinating measures to re-start Brazil’s growth while at the same time realigning the government’s base in Brazil’s notoriously corrupt Congress. He will be immune from the Car Wash investigation – but he can still be investigated by the Brazilian Supreme Court.

The comeback kid?

Lula’s task is nothing short of Sisyphean. How much political capital the former most admired politician in the world retains (Obama: “That’s the guy”) is open to serious questioning. Even a whiff of the prime ministerial possibility being floated early in the week was enough to plunge the Sao Paulo stock market and drive the US dollar up again. His fight with the Goddess of the Market will be classic High Noon.

Lula always privileged balanced budgets and the government’s credibility. For instance, as he ascended to power way back in 2003, he placed former BankBoston ace Henrique Meirelles at the Central Bank and immediately went for a fiscal adjustment, sanitizing expenses and taming inflation.  

Lula is not against a fiscal adjustment per se – which Brazil badly needs; the problem is Dilma’s own, bumbled adjustment went really hardcore on the Brazilian working classes and lower middle classes, including a raid on unemployment insurance. Lula is essentially against the working classes being excessively punished – which will only depress the economy even further. The proof that what he did in 2003 was the right thing – and was part of a calculated long game – is that Brazil was growing at 7.5 percent a year in 2010.

A media beast as effective as Bill Clinton in his glory days, Lula will also switch to non-stop PR offensive – something that the Dilma administration simply does not master. When in power, he always explained his policies in layman’s terms, for instance exhorting people to go shopping and to use the credit his administration was providing. But these were the good old times; now it’s a toxic environment of no consumption, no investment, and no credit.

Still, Lula is bound to bring Meirelles – a Wall Street favorite - back to the Central Bank. Meirelles has already advanced deeply unpopular reforms are essential if Brazil wants to regain its competitiveness.

All eyes on the Supreme Court

The Lula game-changer is not about to turn the whole complex chessboard upside down; it will instead make it even more unpredictable. The hegemonic judicial-politico-media-old elite-economic complex was screaming for Rousseff’s impeachment as late as last weekend. Yet now nobody knows what post-impeachment Brazil would look like.

Under the current juncture, a Rousseff impeachment - who has not been formally accused on any wrongdoing - translates as a white coup. One of the first acts of ‘Prime Minister’ Lula, a master negotiator, as he seizes the chessboard, will be to offer a – what else - negotiated solution to the crisis, which will imply this administration stays on, including Vice President Temer, whose political party is the PMDB, currently allied with the Workers’ Party.

In parallel, the Brazilian Attorney General has already collected information on the notorious coke snorting loser of the last presidential elections, right-wing opposition leader Aecio Neves, who among other feats maintains an illegal bank account in Liechtenstein under his mother’s name. He’s bound to be fully investigated.

investigate a cast of thousands, from Lula and Dilma’s current Vice President Temer to Neves and the current Education Minister.

At the same time the heavily politicized, Hollywood-worthy Car Wash investigation will keep firing on all cylinders even as the chief targets – Rousseff impeached and Lula in chains – become more elusive. Their key strategy is clear; to intimidate virtually everybody. The federal prosecutors behind Car Wash want to blow up any possibility of a political agreement in Brasilia – even at the price of plunging Brazil into civil war mixed with further economic depression.

It’s also clear that without the Brazilian Supreme Court effectively policing the myriad excesses of the Car Wash investigation, there is zero possibility of Brazil emerging from its dire politico-economic crisis.

And all this while impeachment enters ‘Walking Dead mode’. Institutionally, an impeachment fast track could last only 45 days. That’s all the time Lula would have to sew up a grand bargain by proving to the PMDB party that the Rousseff administration has become economically viable.

Before the Lula game-changer, referring to the offensive against Lula, Dilma and the Workers’ Party, crack historian Paulo Alves de Lima told me, “We’re on the verge of a new stage of a rolling counter-revolution, of an even more restricted democracy, unbearably pregnant with arrogance and institutional violence. We’re closer to Pinochet, to the ideal state enshrined by Friedmanesque neoliberalism. 

We’re on the verge of mass fascism, which is a big novelty in Brazil.”

The Pinochet specter, of right-wingers seizing power just like in Brazil in 1964 and Chile in 1973, may be partially exorcized – for now. But make no mistake: the next few days are bound to be epic. Judge Moro, Car Wash’s Elliot Ness, allied with the Globo media empire, will go no holds barred to prevent any possibility of a political agreement in Brasilia brokered by Lula. Because this would mean Lula not only as Prime Minister, but as President – again – in 2018. Total war starts now.

From Zero Hedge

Head Of Brazilian Central Bank Ready To Quit Amid Political Insanity

16 March, 2016

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..

The latest from the Imperial press

Fresh protests likely as Lula joins Brazil cabinet as chief of staff

President Dilma Rousseff appoints predecessor, Luiz Inácio Lula da Silva, in attempt to lift approval ratings

Former Brazilian president Luiz Inácio Lula da Silva has been named chief of staff in the government of Dilma Rousseff, as the embattled leader reshuffles her cabinet in a desperate attempt to stay in office.

The decision means that the former president, currently under criminal investigation for corruption and money-laundering, will not have to face any eventual trial in an ordinary criminal court. As a government minister, he will be entitled to the so-called “privileged forum” of a hearing in Brazil’s supreme court.

While the decision will help to shore up support for Rousseff’s flailing government among the trade union movement and others loyal to the former president, it will enrage yet further the anti-government movement that took to the streets on Sunday in the country’s largest ever protests.

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