As Bloomberg details, all this pessimism reflects what's really an intense distaste for the Workers' Party, known locally as the PT, among investors and business executives.

They see the government of former President Dilma Rousseff as largely responsible for bringing about the worst recession in a century before she was impeached, and her predecessor Luiz Inacio Lula da Silva as a crook. While the PT has put Lula forth as its candidate, it's unlikely he will be allowed to run in October because of a corruption conviction. His probable replacement, former Sao Paulo Mayor Fernando Haddad, gets no more love from traders.

"Turkey and Argentina are examples of how disrupting it is for financial markets when investors lose confidence in policy direction and institutions," said Tania Escobedo, a Latin America strategist at RBC Capital Markets in New York. "Lula's PT party would represent this scenario, unless it moderates its views significantly."