Galípolo in BC and the fixed idea group; Justice and BRL 100 billion more in cash – 05/09/2023

Ah, the obsessions… It’s always worth remembering Machado de Assis from “Posthumous Memories of Brás Cubas”. There it reads: “God forbid you, reader, from a fixed idea; rather a mote, rather a beam in the eye.” It’s in Chapter IV, rightly called “Fixed Idea”. What follows this quote mixes erudition and fine irony in equal doses. He was, after all, the “Witch”. Better a speck or a beam in the eye than obsession, which makes us see even less.

Why this prose? We will see. The Minister of Finance, Fernando Haddad, disclosed the respective names of the two nominees for the vacant directorates of the Central Bank. One of them is Gabriel Galípolo, current Treasury Executive Secretary. If approved by the Senate, he assumes the Monetary Policy directorate. For Inspection, the chosen one is Ailton de Aquino Santos. A career BC employee, he now heads the Accounting and Financial Execution Department, an area linked to the Administration board. He should be the first black person in the organ’s dome. The dollar will neither rise nor fall because of this. Democracy, however, thanks you.

The nomination of Galípolo — a former banker, it’s worth remembering — comes as no surprise to anyone. If “Uzmercáduz” like the fulfillment of expectations, that’s it. The dollar already showed an upward trend yesterday since the opening, and this had nothing to do with the appointment of the current number two of the Treasury for the bank’s most important director. And yet, there appeared the opinions gestated in the Land of the Impossible.

And what did these people say? “Ah, Galípolo, as a man close to Haddad, will certainly be a voice in favor of lowering interest rates” Well, I suppose, by elementary logic, one should expect the same thing from Santos. The most enlightened of speculators — called “analysts” by the press — decided to issue a warning: the government certainly appointed people more in line with its point of view…

My God! Not even ChatGPT would write something similar. It is definitely not an AI analysis. There is a case of the most absolute natural stupidity. So would this piece of “duzmercáduz” only be satisfied if Haddad nominated two declared opponents of the government, unconditional defenders of the current monetary policy? This is overwhelmingly stupid. Future interest rates rose slightly. I read in Valor: “The DI rate for January 2024 fluctuated from 13.195% to 13.22%; the DI rate for January 2025 fell from 11.705% to 11.69%; the DI rate for January 2026 rose by 11 .37% to 11.43% and the DI for January 2027 jumped from 11.47% to 11.575%.At the longer end of the curve, the DI for January 2033 climbed from 12.19% to 12.37% .”

Know. How many wise people and what a remarkable ability to predict the future, isn’t it!?

Note: even with the two nominations, the group that shares the narghile of witchcraft with Campos Neto still has a large majority. Let’s go to the closing date of the respective terms of office of the other directors:
– Fernanda Guardado, Director of International Affairs and Corporate Risk Management: December 31, 2023;
– Maurício Costa de Moura, Director of Institutional Relations, Citizenship and Conduct Supervision: December 31, 2023;
– Carolina de Assis Barros, Director of Administration: December 31, 2024;
– Otávio Damaso, Director of Regulation: December 31, 2024;
– Roberto Campos Neto, president: December 31, 2024;
– Renato Gomes, Financial System Organization and Resolution director: December 31, 2025;
– Diogo Guillen, Director of Economic Policy: December 31, 2025

As can be seen, the Lula government will have appointed, by the end of 2024, seven of the nine directors — three of them at once. In the last year of office, the current management will have made up the entire BC board. Even if some direct relationship could be found between future interest rates and the bank’s staff — and there isn’t — why would Galípolo be responsible for these movements? Until December of this year, the score will still be 5-4 in favor of the current state of affairs. What does the still executive secretary of the Treasury have with the rise in the dollar and future interest rates, besides nothing? Even if it did, we would be faced with the most abject speculation. “Ah, markets are like that; they have no morals”. I spoke of abjection, not of something surprising.

Of course, the press is partly responsible for this climate. Firstly, because it gives a voice to fools and gives them the status of “analysts”. Second, but not least, because it makes BC a sort of Oracle of Delphi and Roberto Campos Neto, the Pythian priestess — none other than the voice of Apollo.

Now, if the BC carries the revealed truth, and its critics, starting with President Lula, are people with despicable ideas, then some speculators feel free to criticize even the nomination of a market man like Galípolo because he would come to represent an interference in the bank, as if the president’s prerogative to make the nomination were not, in effect, evidence of the subordination of that entity to democracy, which is also revealed by the sieve through which the name must pass: the Senate.

I have started a countdown so that someone will come up and question whether it makes sense for the president to nominate the directors of the Central Bank. After all, they will support these enlightened ones, it is a technical body, which must be averse to political issues. As if it weren’t too political to say you are against… politics.

Galípolo’s name was praised even by opposition senators, informs Folha. Senator Ciro Nogueira (PP-PI), for example, stated that the nominee “is the best name in the economy” and anticipated approval “without major difficulties”. So as not to confuse him with a government supporter, he decided to include a certain amount of criticism in the praise: “A great nomination, but it will leave a very large vacuum in the economy.” He is part of the CAE (Economic Affairs Commission), which conducts the sabbath.

In just two judgments in higher courts, the government increased the expected collection by an estimated R$ 95.8 billion.

On the 26th of April, by 9 to zero, the 1st Section of the STJ put an end to a trick with ICMS to large companies that provoked an evasion of IRPJ (Income Tax on Legal Entity) and CSLL (Social Contribution on Net Profit) of the order of 90 billion a year.

Yesterday, the STF formed a majority in favor of the Lula government’s decree that ended a decision taken by Hamilton Mourão on December 30 of last year — yes, the day before the government came to an end —, which reduced from 0.65 % to 0.33% and from 4% to 2%, respectively, the rates of PIS/Pasep and Cofins levied on financial revenues of companies that use taxable income taxation.

The rapporteur for the case was Ricardo Lewandowski. Ministers Edson Fachin, Dias Toffoli, Cármen Lúcia, Alexandre de Moraes and Gilmar Mendes accompanied his vote for the validation of Lula’s decree. André Mendonça, until now, was the only one to disagree. With the end of Mourão’s party, the government will no longer lose R$ 5.8 billion.

Two important government victories. The trifle adds up to almost R$ 100 billion. Part “Duzmercáduz”, of course!, prefers to pretend that nothing happened. He made a fuss when it was reported that the fiscal framework would have to pursue an increase in revenue of R$ 150 billion. Two-thirds of this amount has already been guaranteed by Justice. It was enough to correct the anger of tax evaders and their thieves who disguised themselves as rulers.

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