Crisis of 2015 × the 2016 bottom: what separates panic from inflection

Comparison

What rhymes

August 2015 and March 2016 are two portraits of the same crisis — and both carry an axis at the extreme. In August, it was fear: the Perene Risk Index collapsed from 79.1 to 0.0 and the intermarket crossed into the most acute form of aversion (14.6). In March, it was mood at the opposite end: the sentiment index shot up from 51.8 to 95.5, extreme optimism. The two months share the house signature — one gauge nailed to the edge of the scale, outside any comfortable band.

What differs

What each extreme meant was opposite. In August 2015 the fear was structural: the dollar at R$ 3.51, debt at 62.97% of GDP and fiscal tension, three series out of band at the same time, capital retreating from the cycle. In March 2016 what screamed was only mood: the structure, underneath, barely kept up. The intermarket, in its third straight month of improvement, rose to 43.3 — but remained in moderate risk-off, far from normalization, and the Brazilian regime stayed defensive (37.9). In August the market fled the banks (Financials/IBOV at -2.04); in March the banks were rehabilitated from -1.65 to 0.18, nearly two deviations in a month. The Selic, nailed at 14.25% in both portraits, was the only constant.

What didn't happen

Neither was August's panic the bottom, nor was March's euphoria the confirmation. Anyone who bought the 2015 scream saw November get worse; anyone who read mood at 95.5 as a sign that all was resolved bought while the structure still said caution. Both extremes fooled whoever treated them as the exact turning point — the price bottom sat in January 2016, between one portrait and the other, far from both dates.

Honest verdict

Maximum aversion and maximum euphoria are good regime descriptors and poor clocks. Maximum fear and the inflection rarely live in the same month — and when mood screams louder than the structure, it is the structure that usually has it right.

Continue the story: The three alarms of August 2015 · The bottom that wasn't the bottom · What intermarket is →

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Characters: Flow (risk appetite) · Structure (intermarket) · Cyclicals × defensives · Rates (Selic)