Brazil’s president is accused of obstruction of justice, and stocks plunge—sound familiar?

“Temer out.”
“Temer out.”
Image: Reuters/Nacho Doce
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A president is accused of obstructing justice. Secret recordings may exist that incriminate the leader. Protesters take to the streets to demand impeachment. The president’s approval ratings plunge. The stock market crashes.

This isn’t about Donald Trump in Washington, DC. This is thousands of miles away, in Brazil.

Brazilian president Michel Temer is facing calls for impeachment after reports of secret recordings emerged overnight that allegedly implicate him in bribing a former associate. The tapes are said to contain a conversation with Temer discussing payments to a Eduardo Cunha, the former speaker of the House, in return for his silence in corruption probes. Cunha is currently jailed as part of the sprawling Petrobras scandal that brought down former president Dilma Rousseff last year.

The presidential palace has denied all claims of impropriety. Traders aren’t convinced. Brazil’s stock market fell by 10% in early trading this morning, wiping out nearly all of the year’s gains in a matter of minutes.

The scandal could jeopardize the economic and political reforms that Temer has pledged, and Brazil needs. The South American country was just starting to recover from three years of recession and political turmoil.

By comparison, concerns that Trump tried to influence an FBI investigation into his inner circle’s connections with the Kremlin—which also feature supposed records of potential wrongdoing, and growing calls for impeachment from opponents—sent the Dow and S&P 500 stock indexes down by just under 2% yesterday, the US markets’ worst day in eight months but nothing compared to the carnage in Brazil.