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I just finished perusing today's Bloomberg lead articles for the Latin America Region and it does not look good. I thought I would share the gist for those interested in, or exposed to risk from, Latin American politics.

Brazil's favorite flaming Leftist, Lula da Silva, keeps adding on poll points and may win the next election in the first round.

US Banks have a debt at risk in Brazil of more than US$330B. CitiBank (ex-treasury secretary Rubin's team) is the lead dog in this race to the end of the dock.

Currencies and markets in Argentina, Mexico, Colombia, and Venezuela are starting to wilt in anticipation of a coming debacle and consequent regional currency disaster resulting from the Brazilian tendency to self destruct. They remember the guilt by neighborhood association that occurred when the Mexican peso wrecked.

Telefonica is already predicting a major loss due to expected events in Brazil.

Argentina is, of course, already totally screwed and riding a wheelbarrow to economic hell that they launched by themselves.

The World Bank and IMF don't know whether to faint or wind their watches. With the Japanese moribund, EU unemployed, US economy looking shaky, and quite a bit of good money already tossed away in Latin America by the aforementioned agencies, this pending political and economic collapse in Brazil may be the trigger that everyone fears. The repercussions really have a potential to be grave and even catastrophic on a global scale.

In case you didn't already have enough to worry about.

David
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