Brazil's presidential election does not take place until October, but investors are already voting with their feet at the prospect of victory for the leftwing opposition candidate, Luiz Inácio Lula da Silva.

The presidential contender from the Workers' Party, better known simply as Lula, holds a commanding lead over José Serra, the ruling Social Democratic party candidate. The possibility that Lula, a former metalworker, will become leader of Latin America's most important economy has got the markets - which consider him a leftwing firebrand - rattled.

Stocks have tumbled and the currency, the real, has slumped in recent weeks. Last week, credit rating agencies - which access the ability of borrowers to repay their debt - downgraded Brazilian debt.

Investors fear that if Brazil goes off the rails, the rest of Latin America will descend into chaos as the economic contagion spreads. Although Argentinians are suffering terribly from economic turmoil and a once-proud country is reverting to a barter economy, Argentina's problems have not spread to the rest of the continent so far.

Argentina's present economic situation is referred to as