During the recent rough patch for global stocks, Guild’s benchmark fund has held up better than others. In the 12 months through January, it lost 5.2 percent. The MSCI global equity index, the benchmark for funds like Guild’s, slumped 8.6 percent during that span.

The 73-year-old set up his firm, Guild Investment Management Inc., in 1971 above a Junior League thrift store in West Los Angeles, about a mile from its current location in Santa Monica. Two years later, the U.S. sank into a recession, posting back-to-back annual economic contractions on the eve of Nixon’s resignation. Brazil’s economy today is mired in an even worse slump, having shrunk 3.8 percent last year and forecast to contract another 3.6 percent in 2016.

"Everyone tolerates a certain level of corruption as long as there’s a trickle down to the public at large," Guild said. "But when national growth ceases and becomes GDP shrinkage, they become irritated and more willing to toss the politicians out."

Walter "Bucky" Hellwig, senior vice president at BB&T Wealth Management, sees the attraction of the Watergate comparison but warns against over-analyzing it. What happens to prices for Brazilian commodity exports will play a key role in determining whether the recent stock rally is sustainable.

"I see an intermediate up trend in Brazil," said Hellwig, who helps manage $17 billion from his Birmingham, Alabama, office.

Rousseff, who denies allegations she doctored budget results and that her re-election campaign in 2014 received money from the Carwash scheme, appointed Lula in a bid to rebuild support in Congress. Lula was the most popular president in the country’s history when he left office.

But the move has instead emboldened her critics and further damaged her in the eyes of the public. Both Rousseff and Lula, who are members of the Workers Party (PT), have denied the Cabinet appointment was designed to obstruct the investigation into bribery at the state oil company.

On Tuesday, Brazil’s biggest political party left the governing coalition, a major blow to Rousseff just weeks before she faces an impeachment vote. The lower house is expected to vote on her removal by mid-April. If approved there, the process moves to the Senate, which could decide by May whether to end her tenure. Rousseff has said she won’t resign and that the push to impeach her amounted to a coup against democracy.

“Either the PT is ousted or Lula and his party become more reasonable and honest and stop stealing," Guild said. "In either case, Brazil is better off."

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