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Surprise, surprise: Dilma Rousseff will run

After the federal district governor is jailed, successive interim governors take up his post. Lula's Chief of Staff, Dilma Rousseff, is the official presidential nominee for the Worker's Party. The leftist party tweaks its platform, and rival nominee Jose Serra still leads the polls. Hillary Clinton will visit next week. The country registers hundreds of thousands of new jobs, but the stock market is down. Two ethanol companies, ETH and Brenco, announce a merger. State petroleum company, Petrobas, will be the most profitable in the world. And as Carnaval winds down, the media counts the number of people ticketed for public urination.

Top News: For future students required to memorize the name of every governor in the history of the Distrito Federal (a.k.a. Brasilia), the task just got harder. Since the last Brazil report, the DF has had two new governors, both interim. First up, Paulo Octavio, deputy governor under the now-jailed Jose Arruda. But since Octavio was also linked to the very same scandal that forced Arruda to step away, it was suspected he wouldn’t last long, and he didn’t. His party, the center-right Democrats, had refused to provide him political cover. Next up, in what Americans might call a Nancy Pelosi scenario, is Wilson Lima, head of the DF’s Chamber of Deputies.

Meanwhile, the scandal, over a scheme that (in short) took money from businesses in Brasilia and distributed it to officials in exchange for contracts and influence, continues to broil. And Arruda, who when last we met him was being held in a Brasilia prison, has now been moved to a real cell – i.e. not the luxury office of a police official.

This all comes, embarrassingly, as the nation’s planned capital prepares for a huge celebration of its 50th anniversary in April.

Meanwhile, we can finally say officially what everyone has known for ages: Lula’s chief of staff, Dilma Rousseff, is the Workers Party’s official nominee to succeed the “most popular politician in the world” (that’s Obama talking) when his second term ends on Dec. 31. That landed Dilma on the cover of two major newsweeklies here, Veja and Epoca. (Epoca scored the exclusive, if somewhat trite, interview; Veja had to settle for a shorter, though more intellectual, interview – alas, not online.)

The party itself tweaked its platform to make itself more radical, proposing a new tax on wealth, a shorter work week and a leftist social agenda. Dilma sought a more moderate tone in public appearances. A new poll showed her prime rival, Jose Serra of the opposition PSDB, still well ahead. In a long interview with the Estado de Sao Paulo newspaper, Lula again confirmed he would not seek to return to the presidency in 2014.

Finally, Hillary Clinton is coming to Brazil next Tuesday for a formal diplomatic visit. (That’s the biggest Hillary news to break in Brazil since she lost a shoe while with Nicolas Sarkozy in January.)

Money: The continuing good news about Brazil’s economy must seem like it’s in a foreign language to Americans. (OK, it often is.) The country registered 181,419 new formal sector jobs in January, the best for that month since 1992. Industrial jobs led the pack.

Still, international investors take note: Brazil is showing signs of fatigue, according to a Financial Times interview with Neil Mellor of Bank of New York Mellon. He notes that the stock market is down this year, there were “four consecutive daily net outflows of equity,” and the Central Bank may be getting ready to raise interest rates.

Two big Brazilian ethanol companies announced a merger last Thursday. ETH and Brenco combined will become the biggest ethanol producer in the world, according to leading business magazine Exame, which said their net worth is estimated at seven billion reais, or 3.8 billion dollars.

And it looks like Petrobras, the Brazilian petroleum company, should be the most profitable in the world when the 2009 numbers are finalized, says Estado.

Elsewhere: It’s amazing anything at all happened here in the last two weeks, considering Carnaval fell right in the middle. It’s the end of summer, the time things usually grind to a halt as so Brazilians can choose between 1) wild parties and 2) isolated beaches. In Rio, the much-disputed title for best samba school went to Unidos da Tijuca, and even if you don’t care about samba, you had to be impressed by their performance, especially the magical whirlwind of outfit changing you can see in this video. Their Batman-skiing/Spiderman-climbing routine was also popular.

As Carnaval approached, a 7 year-old who was to be drum corps queen for the Viradouro samba school made international headlines because of the controversy of such a young girl taking on a traditionally sexually-charged job. In the end, she did perform, but Viradouro came in last, meaning they will be demoted to the second ranking samba league for 2011.

In Sao Paulo, Rosas de Ouro won the crown for the first time in 16 years.

Back in Rio, the Carnaval is also known for its huge, festive street parties, called blocos, and the innovation of the year was the mayor’s anti-urination crackdown. Four thousand portable toilets were installed, and the media kept daily counts of how many people, and how many women, were ticketed for not using them.