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Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pimp

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Speaker 1: Box on Bloomberg Radiomsef second president to be impeached in

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Speaker 1: Brazil's thirty one year old democracy. Will this lead to

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Speaker 1: a shift in policy? Brazilian stocks down today, led by

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Speaker 1: a drop in commodities companies. Investors are turning their attention.

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Speaker 1: They want to see concrete signs that the economy is

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Speaker 1: going to be improving. After Miss Russef leaves office and

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Speaker 1: Michael Tamar, her former vice president, takes over, Mario Marcarini

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Speaker 1: joins us. Now he's managing director for to New Intelligence

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Speaker 1: in Latin America. In fact, he's in Sampaolo, Brazil. Mario,

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Speaker 1: welcome to the show. Thank you so Mario. First of all,

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Speaker 1: what is the mood? What is their action among people

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Speaker 1: you talked to? Well, I think the first reaction is

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Speaker 1: is relief, you know, because people are kind of set

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Speaker 1: up with the whole process. I mean, this has been

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Speaker 1: nine months of a process since I got started, of course,

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Speaker 1: since it was authorized the Speaker of the House back

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Speaker 1: in December last year, so this is a long time

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Speaker 1: for this. They went through the House, went through the Senate.

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Speaker 1: He finally got to the end of it. So that's

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Speaker 1: the first thing, is his relief and the hope that

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Speaker 1: you can just begin to govern, you know, because since

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Speaker 1: the second Mandate, which started in two thousand and fifteen,

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Speaker 1: we have not had much of a government. So it's

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Speaker 1: just showed to me. It's so ironic because Brazil was

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Speaker 1: flying high, you know, andso left, and then Da Silva

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Speaker 1: took over, and the scene with with with certainly Carlos,

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Speaker 1: so that the foundation was there for growth and low

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Speaker 1: inflation and investment, the leta Silva carry things on. And

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Speaker 1: what happened with rece was it her fault? Was it

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Speaker 1: her lack of good policy or things just turn enough

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Speaker 1: that she was the one who got caught with the

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Speaker 1: wrong chair or no chair when the music stopped. Yeah,

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Speaker 1: I think I think unfortunately, I think it was utter incompetence.

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Speaker 1: I mean, I think Lula, when he chose the successor,

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Speaker 1: he could never have imagined that she could make such

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Speaker 1: a mess out of the economy, and that she could

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Speaker 1: be such a disaster politically as well, because you didn't

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Speaker 1: speak to anybody, she didn't talk to Congress. You made

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Speaker 1: enemies all over the place, including her own government, and

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Speaker 1: so it was. It was really difficult, and frankly, I

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Speaker 1: think the order of things is that I think Lula

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Speaker 1: did pretty well in the first mandate. The second half

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Speaker 1: of him his mandate, you have the global financial crisis,

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Speaker 1: and then they began, you know, with Kanjian policies, you know,

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Speaker 1: growth policies to make sure that Brazil would would stay

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Speaker 1: on course, and that worked. The economists even picked it up.

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Speaker 1: But the fact is that when she came in in

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Speaker 1: two thousand and ten, she basically thought that was that

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Speaker 1: was forever. You're just supposed to be spending money without

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Speaker 1: any limits, and that was completely wrong. Obviously, you know,

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Speaker 1: you cannot even do social policy just by dishing out

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Speaker 1: of money without having it, and so this is really

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Speaker 1: the main mistake. It was just just and that's the

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Speaker 1: beginning of it. Not to mention all the charges that

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Speaker 1: were real, that were constitutional. You know the constitution that

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Speaker 1: does talk about the responsibility for all the fiscal accounts

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Speaker 1: on the part of the president, and it was all

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Speaker 1: very clear, very institutional, very legal. But but that was

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Speaker 1: the beginning of it. I think, Yeah, I think it

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Speaker 1: was a shame and for a lot of people, I

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Speaker 1: think it would have been natural for you to have

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Speaker 1: the institutions, the the you know, the privatization or whatever

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Speaker 1: you had with Cardoza, then you had Lulo with the

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Speaker 1: social inclusion, but understanding what macro economics was about. So

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Speaker 1: what it was really a shame is how how the

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Speaker 1: whole thing derailed was all of a sudden she forgot

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Speaker 1: what macro economics was or didn't understand any of it

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Speaker 1: and through the country under the bus. Basically that's what happened. Well, okay,

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Speaker 1: so there were some would say these allegations of breaking

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Speaker 1: budget laws. Other elected officials have kind of you know,

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Speaker 1: they've fudged, they've cheated a bit, but they weren't brought

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Speaker 1: to impeachment by it. But as you say, people didn't

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Speaker 1: like her and she was mismanaging the can of me.

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Speaker 1: It's understandable how this could be used against her now.

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Speaker 1: Michael Tamer, the vice president who's now president are Bloomberg

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Speaker 1: story written from from some follow from Brazilia, says a

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Speaker 1: lot of people view him as part of the same

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Speaker 1: political establishment they have come to distrust. Is he the

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Speaker 1: right guy or is it going to take yet another

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Speaker 1: president to get Brazil back on track? No, I think

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Speaker 1: I think to get back on track he's been. I

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Speaker 1: must say, I find that he is, uh, you know,

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Speaker 1: the best you could get for for the current situation,

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Speaker 1: considering all the ramifications and who happened to be at

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Speaker 1: the vice presidency. The fact is he was never you know,

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Speaker 1: a major part of Delmon's government. She didn't consult him,

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Speaker 1: He was not really involved in any policy making. And

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Speaker 1: the fact is, since he has come in when she

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Speaker 1: was suspended, you know, once uh, he got to that

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Speaker 1: point in the impeachment process, he already came in with

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Speaker 1: a total different view. Basically, you know, he wants to privatize,

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Speaker 1: he wants to to to deal with the fiscal disarrangement

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Speaker 1: that we have. He has been doing so. He has

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Speaker 1: the right finance minister, he has the right Central Bank president.

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Speaker 1: And I think markets are still very optimistic, and I

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Speaker 1: think they should be that at least we have the

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Speaker 1: instruments with which to do what is necessary. I think

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Speaker 1: the risk and the signpost you have to watch, of course,

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Speaker 1: is going to be Congress, because a lot of the

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Speaker 1: stuff you need to do, starting with a spending cap,

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Speaker 1: which is something that he's been announcing since the beginning.

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Speaker 1: There's a lot of support for it for those who

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Speaker 1: understand economics and who can see what is needed for

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Speaker 1: the country. Uh, that has to go through Congress. So

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Speaker 1: that's what we need to watch between now in October,

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Speaker 1: we're going to have the campaign and then the municipal elections,

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Speaker 1: so it's kind of difficult to to vote, but I think,

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Speaker 1: you know, until the end of the year, I think

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Speaker 1: he will be able to vote on a spending cap,

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Speaker 1: which is which is going to be unbelievable actually as

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Speaker 1: a signal of commitment with fiscal response, fability Marco Marcot Needi,

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Speaker 1: thank you so very much. Fiscal responsibility what Brazil needs

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Speaker 1: now joining us from latam uh in a tornado intelligence

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Speaker 1: This is Bloomberg