This article examines the workings and effects of the penalization of poverty in urban Brazil at century’s turn to uncover the deep logic of punitive containment as state strategy for the management of dispossessed and dishonored populations in the polarizing city in the age of triumphant neoliberalism. It shows how ramifying criminal violence (fed by extreme inequality and mass poverty), class and color discrimination in judicial processing, unchecked police brutality, and the catastrophic condition and chaotic operation of the carceral system combine to make the aggressive deployment of the penal apparatus in Brazil a surefire recipe for further disorder and disrespect for the law at the bottom of the urban hierarchy and steers the country into an institutional impasse.