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Not Even 'Scissorhands' Can Cut Brazil Out of Its Fiscal Trap

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Joaquim Levy was supposed to be the man who would save Brazil’s finances. A University of Chicago-trained technocrat who earned the nickname “Scissorhands” for his tough budget-cutting policies, he strode into the Finance Ministry in January with a mandate to preserve the country’s precarious investment-grade rating.

Now, eight months later, with Congress refusing to back key parts of his austerity plan and dissent growing within President Dilma Rousseff’s own cabinet, speculation is rampant that Levy will resign. When word got out Thursday afternoon that he would skip the upcoming meeting of G-20 finance ministers in Turkey -- a decision he’d reverse later in the day -- those concerns reached a fevered pitch. Traders pushed down the currency 0.6 percent in three minutes. Hours earlier, the Treasury canceled its weekly debt auction for the first time in over a year.