The news from Sao Paulo does not sound good.
I wish I had something more articulate to say about the situation, but I freely admit I don't have much news. What I do have, though, are a few links on Brazilian culture and politics I've been meaning to post here for months. None of these are remotely recent, but they're all worth looking into. They may even shed some light on what's going on right now.
Photographer Geoffrey Hiller's gorgeous, incredibly detailed 2004 online slideshow (with music) called "Canto Do Brazil"
(I've only scratched the surface of this myself so far; it's like a visual and audio encyclopedia of the entire country, region by region.)
In his intro, Hiller notes: "According to a World Bank study, Brazil has the most unequal distribution of wealth of any country. The fifth biggest nation in the world, Brazil has a population of 180 million people. Approximately 24 million Brazilians live in extreme poverty and earn less than $1 a day while the minimum salary of $65 per month hasn't changed from when I lived there 25 years ago."
A January 2006 episode of the public radio show To the Best of Our Knowledge on the subject of "Evolving Cities"
(The first segment of the show features a piece on Robert Neuwirth's book Shadow Cities: A Billlion Squatters, A New Urban World [Routledge], discussing the favelas of Rio.)
The Global Voices international news blog/site's section on Brazil
(So far I see nothing on the riots here.)
A January 2006 NPR story on American farmers partnering with Brazilian farms