Update: Confusion abounds as the government is now said to delay Lula’s appointment after Senator Delcidio Amaral’s plea bargain. According to Veja, Rousseff’s former chief of staff Aloizio Mercadante allegedly offered financial, political and legal aid in exchange for Amaral’s silence.

Just yesterday, we showed you Brazil’s stagflationary nightmare in one simple chart.

Here’s the amusing (or depressing, depending on if you’re a Brazilian) graphic:

Just last week, the BRL was riding high on news that former President Luiz Inácio Lula da Silva was detained in connection with money laundering. He was then charged with corruption by state prosecutors.

The scrutiny on Lula – who founded the Worker’s Party and handpicked his successor, current President Dilma Rousseff – triggered violent street protests in front of his home where supporters and detractors came to blows.

But the market hoped his arrest and possible prosecution would give momentum to the effort to impeach Rousseff, who has presided this year and last over a disastrous turn in the Brazilian economy where unemployment has spiked above 10%, inflation has soared into the double digits, and output has collapsed, in a veritable “worst nightmare” scenario.

The impeachment bid rests on the idea that Rousseff cooked the fiscal books in 2014, but the fact that Lula was under fire seemed to suggest that the sweeping investigation into corruption at Petrobras (PBR) could be getting closer to the President’s doorstep. Were she implicated in the Carwash probe on top of allegations she fudged the government’s books, the outlook for her presidency would darken considerably and that, market participants assumed, would be a boon for the beleaguered BRL, for Brazilian risk assets, and for the economy in general.

Well, no such luck.

In a dramatic turn of events, Rousseff invited Lula to accept a ministry post yesterday. Initially, reports indicated he would resist the idea of accepting, but that soon changed. Earlier today, Lula informed several party members that he has decided to accept according to Globo columnist Lauro Jardim. That is bad news for the BRL (which has nearly retraced the entirety of the Lula detention gains) and for Brazilian stocks:

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