The market wants Lula imprisoned no matter what: it's good for business.

247 - Article published on the portal InfoMoneyOne of the "bibles" of the so-called "market" (banks, rentiers, and speculators in general) clearly admits that it is necessary to keep Lula imprisoned so that their businesses continue to flow smoothly. There is a "new warning sign for the markets," the article reports, due to Minister Edson Fachin's decision to put an appeal requesting the former president's release up for judgment in the Second Chamber of the Supreme Federal Court. The article states that if released, Lula could rapidly alter the national political and electoral landscape—which terrifies the "market." 

The article is emblematic because it doesn't dedicate a single line to the issue of Lula's innocence or guilt, restricting itself to calculations about the fate of "market" operations in light of the Supreme Court's decision. What worries the "market" is Lula's political power, which needs to be kept contained. The text clearly states: 

"Fachin's stance, which could have been avoided with a unilateral decision, has increased the perception that there is some possibility of the former president being released, which could at least allow for a more active participation in the electoral process, even if his candidacy were prevented due to the Clean Record Law, as is expected today. Once released, Lula could have greater political leverage to transfer votes to a candidate supported by the PT in the presidential race."

This possibility worries investors, as it poses even greater risks to the victory of a center-right candidate, in favor of orthodox economic reforms, in the October elections.

In other words, the market isn't even dreaming of Lula as a candidate, which would trigger panic. The mere fact that the former president is free and can act freely in national life is already cause for extreme nervousness within the Brazilian elite. 

The text also reproduces an excerpt from an article by the analysis team at XP Investimentos (which belongs to Banco Itaú): "'Faced with difficulties in maintaining his positions on Lava Jato within the panel, Fachin is signaling that he no longer intends to bear the burden of 'holding back' cases alone in order not to lose within the panel. Something along the lines of 'each one bearing the consequences of their vote,' observed the XP Investimentos analysis team." 

Read the most relevant excerpt from the article below or click here For the full text: 

The decision by Justice Edson Fachin, rapporteur for the Lava Jato operation at the STF (Supreme Federal Court), to release for judgment in the Second Panel an appeal filed by the defense of former President Luiz Inácio Lula da Silva to suspend the effects of his conviction in the Guarujá (SP) triplex case, has triggered a new warning signal for the markets, which have begun to monitor more closely an increase in political risk in recent days.

In the ruling, the judge asked Minister Ricardo Lewandowski, president of the panel, to put the matter on the agenda for June 26. The panel is known for having a majority opposed to the understanding of serving a sentence before the final judgment, which allows imprisonment after conviction in the second instance, a situation in which Lula has found himself for just over two months, since he was imprisoned to serve a sentence of 12 years and one month for the crimes of passive corruption and money laundering.

In addition to Edson Fachin and Ricardo Lewandowski, the Second Panel of the Supreme Federal Court (STF) is composed of Justices Celso de Mello, Gilmar Mendes, and Dias Toffoli.

Fachin's stance, which could have been avoided with a unilateral decision, has increased the perception that there is some possibility of the former president being released, which could at least allow for a more active participation in the electoral process, even if his candidacy were prevented due to the Clean Record Law, as is currently expected. Once released, Lula could have greater political leverage to transfer votes to a candidate supported by the PT in the presidential race.

This possibility worries investors, as it poses even greater risks to the victory of a center-right candidate, in favor of orthodox economic reforms, in the October elections. Lula leads the presidential race in all polls that consider his candidacy. In the latest Datafolha survey, the former president had 30% of voting intentions, compared to 17% for the second-placed candidate, federal deputy Jair Bolsonaro (PSL-RJ). A similar difference was recorded by the latest XP/Ipespe poll, which shows the Workers' Party candidate at the same level and the former army captain with 19% of voting intentions.

Lula's defense team is urgently requesting the suspension of the former president's conviction, given that he is a pre-candidate for the presidency and has his political rights curtailed due to the execution of the sentence unanimously determined by the three judges who make up the 8th Panel of the TRF-4 (Regional Federal Court of the 4th Region). "In addition to having his freedom unduly restricted, he runs a serious risk of having his political rights similarly curtailed, which, in view of the ongoing electoral process, is extremely serious and irreversible," argued the lawyers in the request reported by Fachin.

"Faced with difficulties in maintaining his positions on Lava Jato within the panel, Fachin is signaling that he no longer intends to bear the burden of 'holding back' cases alone in order to avoid losing within the panel. Something along the lines of 'each one bearing the consequences of their vote'," observed the XP Investimentos analysis team. They believe there is a possibility that ministers who disagreed with the timing of Lula's imprisonment might seize the opportunity to 'correct' the decision through other means. On the other hand, they consider this possibility unorthodox.