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September 2015: the risk index caught its breath, the banks did not

Episode

The extreme

"Convalescence" was the word the panel seemed to whisper — and it was the wrong one. The Perene Risk Index, which had ended August fainted at the absolute floor of the scale, rose into neutral territory, and the cyclicals, beaten down for months, sketched their first relative recovery in a long while. It looked like the body reacting. But there is one instrument in the house that measures the health of domestic credit — the banks — and it went the opposite way, sinking to one of the worst deviations in its own history. When the face flushes and the pulse weakens, it is the pulse you trust.

In numbers: the Perene Risk from 0.0 to 52.2; the Financials/IBOV ratio from −2.039 to −2.650, the sharpest deterioration of the month; the intermarket barely off the bottom (14.64 to 15.36, still pronounced aversion); the dollar at R$ 3.9065 and debt at 63.65% of GDP.

What happened next

Aversion did not recede — it deepened. Three months later, in December, the intermarket had passed through November's bottom (12.19) before making an improbable leap to 65.25, moderate risk-on. But the banks still would not sign off: Financials/IBOV still at −1.82. Only in March 2016, six months on, did they come back to life — from −1.65 to 0.18, nearly two deviations in a single month, while mood was shouting to buy. And a year later, in September 2016, the story came full circle: the Perene Risk collapsed back to zero, convictions retreating in silence.

What did not happen

September's breath was not the cure. The banks were right to distrust — but anyone who used them as a trigger to flee would have missed December's leap. The floor of the internal scale was not the floor either: November was worse. The Selic gave no relief at any point (14.25% the whole year), and when the financials finally rehabilitated themselves, it was not the economy that validated them — the Brazilian regime remained defensive (37.9), with debt climbing to 66.3% of GDP.

The honest verdict

The internal index read improvement; the banks read the truth of the month. Both were half right. The extreme of a single indicator — even the most perceptive one — marks the beginning of a process, not the hour of a turn. September warned that the relief was fragile; it did not say when it would end.

Continue reading: The bottom that was not the bottom · Who bought while mood was shouting · The silent retreat of convictions →

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Characters: Structure (intermarket) · Flow (risk appetite) · Mood · Dollar