I should’ve known better.

Better than to count Lula out, I mean. Hell, his last comeback started from a jail cell, so what’s a couple of points down headed into a runoff when you’re already president?

Still, I’ll be forgiven for writing, on October 5, that “There’s about to be a Bolsonaro living in The Palácio da Alvorada again.”

After all, Flávio Bolsonaro handily outperformed expectations in the first round of Brazil’s presidential election, carrying 47% of the vote to Lula’s 45%. That was no small feat: Any result that found Bolsonaro trailing by less than, say, 3ppt headed into the runoff was generally considered a good one for the son of Brazil’s strongman, Jair, who’s serving out a 27-year prison sentence under house arrest. That Flávio came away from the first round ahead by 2ppt wasn’t just a good outcome, it was something of a coup. (There’s a Bolsonaro joke there. Don’t miss it.)

Importantly, Bolsonaro was expected to win most of the so-called “third-way vote” in the runoff. Between his two-point cushion and assumptions about his capacity to capture around three quarters of the votes cast for candidates other than himself and Lula in the first round, the runoff was “Flávio’s to lose,” as more than one observer put it earlier this month.

Well, he lost it. And my goodness, were betting markets caught wrong-footed. The figure below shows Polymarket odds for a Bolsonaro victory. They were 90% earlier this month and despite local polling that plainly suggested Lula had closed the gap, remained near 80% on the eve of the vote.

I’m reminded of the November 2025 Monthly Letter, likely the most under-appreciated of the entire series. It’s about modern betting markets and their creators who, emboldened by legacy polling’s failure to predict a series of epochal political outcomes from Brexit to Trump, have convinced themselves that the balance of monetary wagers is “never wrong.”

Naturally, Flávio claimed the election was stolen. During the campaign, he didn’t lean as hard into the rigged vote narrative as his father, but the apple doesn’t fall too far from the tree. Now that he’s lost, he’s pushing the conspiracy stories just like his dad, blaming “dirty tricks” for the outcome.

Although his campaign was in favor of extending voting hours due to snarled traffic and inclement weather, Flávio turned around and blamed the extensions for the outcome once he found out he lost. “This needs clearing up,” he said, at a press conference. The country can’t “simply accept [the] foul play that took place in these elections.”

What really happened is straightforward: Lula got the vote out. Participation rose by around three million versus the first round. Lula’s margin of victory was 4.4 million.

In the weeks following the first round, Lula apparently succeeded in convincing otherwise apathetic Brazilians that to surrender the election to Flávio was tantamount not only to ceding democracy to the son of a would-be military dictator, but to acquiescing to a client state relationship vis-à-vis the Trump administration. As Lula put it late Sunday, “this country refuses to be anyone’s backyard.”

As bitter as this result is for the cult of Jair, it’s in equal measure humiliating for Donald Trump, JD Vance and Elon Musk, all of whom were keen to see the inauguration of a Bolsonaro family dynasty. Had Brazil fallen again to a right-wing authoritarian, Latin America’s rightward shift would’ve been cemented.

The maps above, from BofA, show you the shift. They were featured in a Michael Hartnett note dated October 8. Note from the header text on the right that Hartnett, like Polymarket, had penciled in a Bolsonaro victory. Guess what Mike? “Ha-Ha!” (I’ve been waiting three weeks to deliver that punchline.)

To be clear — and I was adamant about this in my coverage of the first round vote — it’s far from obvious that “more Lula” is what Brazil needs. And the close call testifies to the notion that it isn’t really what Brazil wants either. To his detractors, Lula’s synonymous with the country’s reputation for graft, and you could argue that his Methuselah run at, or near, the top of Brazilian politics is indicative of an addiction to power.

But I’m very confident in asserting that “more Lula” is preferable to the establishment of a multi-generational Bolsonaro dynasty. That latter outcome would bode very poorly, particularly given the family’s apologist attitude towards Brazil’s military dictatorship, which ran the country for more than two decades until democracy was restored in 1985.

The election result will naturally trigger a deep, knee-jerk selloff in local equities, and probably the currency too. (“Womp, womp,” I know.)

As The Wall Street Journal pointed out, Lula has now matched the Iron Chancellor (Angela, not Otto) for democratic longevity. Sunday’s win “puts him on course to complete 16 nonconsecutive years in office, matching Merkel’s tenure and placing him among a small group of modern democracy’s longest-serving elected leaders,” the Journal‘s coverage remarked.

The only question now is whether Flávio will take a page out of his father’s book and try to overturn the results.