There is no shortage in Brazil these days of people convinced the ruling Workers’ Party is out to turn the country into a bad hybrid of Hugo Chavez and Christina Kirchner anti-Yankee, state capitalism. The likelihood of Brazil ever becoming the next Argentina or Venezuela are slim. In the eyes of the market, this chart speaks volumes.
This is the five year credit default swaps of Brazil, Argentina (spotty data) and Venezuela. It shows what the market thinks the risk is for a sovereign default on debt. Brazil’s getting worse. But it is no where near these two characters.
On Sept. 10, a Fitch rating analyst said that the credit watchdog would have to take the political crisis into consideration when considering future rating action.