An initial effort by the loser in Brazil’s Sunday run-off election for president, Flávio Bolsonaro, to claim election irregularities and get other nations, principally the U.S., to back his demand to annul the elections, has fallen apart almost before it began. He claimed that the decision by members of the Supreme Court to extend voting by two hours to allow voters facing torrential rains to get to the polls, invalidated the results. Yet it turned out that only 34,000 votes were cast in that extended time period, 29,000 of them in the first 5 minutes by people already in line to vote—when the difference in votes between himself and victor Lula da Silva was over 4.3 million votes! By Monday afternoon, he had withdrawn his challenge, though he left the door open for a later court case alleging Lula mis-used federal funds to court votes. But any protest momentum is largely sapped.

However, the London and Wall Street financial oligarchy has immediately launched financial warfare to make Brazil ungovernable.

The Brazilian stock market dropped precipitously on Monday, Oct. 26, the day after Lula’s electoral victory. After a “circuit breaker” halt to trading in the morning, to calm the initial plunge, the principal market index finished the day 14% down. The Brazilian currency, the real, lost 8.5% of its value relative to the U.S. dollar.

Some of this reflected an immediate declaration of financial war by oligarchic interests inside and outside Brazil, but a considerable part of it was simply unwinding failed direct bets, and derivative contracts, which had been placed in expectation that Lula’s defeat was assured. Given the intensity of popular fervor to defend Brazil’s sovereignty and democracy which carried Lula to his successful re-election, an immediate full-blown savaging of the Brazilian markets and currency could backfire, and give Lula an opening to go after a financial cancer which has hamstrung efforts for major infrastructure and re-industrialization initiatives, and piled on crushing personal and government debt with 14% interest rates.

London is making clear that it intends to systematically escalate financial blackmail over the next weeks as Brazil heads into deadlines for its 2027 budget by the end of the year. Headlines from the City of London’s major press today demand that Lula make major budget cuts, throwing cold water on his energized base even before his fourth term begins in January, or face crushing runs on the currency and complete disruption of Brazil’s financial markets, which are joined at the hip to London and Wall Street. The Financial Times put it this way: “…once the glow of a stunning come-from-behind victory starts to fade, the harsh realities of Lula’s fourth term will quickly set in… If Lula does not take measures to significantly rein in public spending, he risks a serious credibility crisis in financial markets.” The London Economist headline trumpeted, “Markets are dismayed by Lula’s surprise win—and for good reason.”