BRAZIL-More scenario inputs

Some blasts from the past

When I attended school in New Jersey the (small) private school hired a local Sicilian grandfather, Mr. Fiore, to work as a  “traffic cop” during the school’s rush hours: early morning when mothers and buses arrived to drop off their students and in the afternoon when mothers and buses arrived to take students home.

Mr. Fiore knew as much about directing traffic as I know about neurosurgery. As the traffic increased and horns started blowing he would eventually become frustrated and just yell, “Everybody ‘comea’ through!” It was then up to the drivers of cars and buses to coordinate their own arrivals and departures while Mr. Fiore waved his arms in every direction and cursed in Sicilian dialect. He was enormously popular with us kids, told us great stories about his youth in Sicily (e.g. He had been a student athlete and told us often that he received “a golda diploma for runna likea hell”)

Watching the administration frantically chasing down votes to stymie Dilma’s impeachment reminded me of Mr. Fiore’s management of arrivals and departures from my grammar school. If a political party refuses for one reason or another to vote against Dilma’s impeachment the government reportedly quickly suggests a smaller amount of money if the party’s legislator will simply refuse to show up for the vote (thus denying a quorum without which a 2/3 Lower Chamber majority cannot be obtained). Dilma appears to be waving her arms like Mr. Fiore, cursing in Portuguese, and thoroughly lost.

Her situation reminded me of another blast from the past involving what was reported as Dilma’s own, and singular, experience as an entrepreneur when she was reported to have set up one of those $1.99 discount stores. According to reports, the venture failed. When you can’t even sell at a discount in an inflationary economy, you are almost certainly in the wrong business!

Meanwhile, practically everything except Lava Jato has ground to a halt until the impeachment issue is resolved. 

Most of the “talking heads” that now have become “scratching talking heads” have suggested that she will not get the 171 votes in the Lower Chamber to stymie the impeachment motion. Whether she can continuously deny a quorum is also a matter of conjecture.

As I write this post, the Special Commission is noisily evaluating Dilma’s defense of the charges outlined in the motion and for eventual submission to the Chamber in a plenary session. It is then that we will know if Dilma has marshaled sufficient votes to kill the motion. If not, she will have to resort to denying a quorum for as long as possible. That is a weak strategy.

You might want to consider the following scenario:

• If the impeachment motion is forwarded to the Senate and Vice-President Michel Temer assumes the presidency, he might be able to impose at least a couple of adjustment measures that will perhaps generate a brief “lightning flash” of optimism in the private sector;
• I have often suggested that the economic paralysis could end more quickly than the political paralysis. Even if voters are not terribly enamored of the PMDB as the replacement of the PT, as long as any proposed measures do not serve to worsen the situation some members of the private sector might consider viewing things a little more positively;
• However, a short-term improvement of the economic environment will depend on whether the PT takes to the streets. Violent protests will serve to simply maintain the current pessimism until the protests are dealt with by the authorities;
• I have discussed this issue in the past with regard to actions such as strikes, sabotage of industrial production lines, violent street confrontations, etc. You should at least have a contingency plan for such events.

In summary, batten down the hatches, get your security team on board, be prepared to deal with threats against employees or against the company, possible urban terrorism, and other such temporary chaos. Gather intelligence as possible from colleagues and other firms and make sure your personnel are advised if and when threats appear imminent. As I have quoted in past posts, “What can’t go on forever, won’t!”