Brazil is in a political and economic crisis. Since Dilma’s re-election in October 2014, asset prices have plummeted, the currency has devalued, and rising debt has driven bond yields higher. The administration is now embroiled in scandal, resulting in political stalemate. As conditions worsen, the probability of an early exit by Dilma rises, a first step to resolving Brazil’s imbalances. But any marginal improvement in the political dynamics could short-circuit today’s negative, reflexive feedback loop, catalyzing asset prices.