This week, Standard & Poor's affirmed Argentina's credit rating, citing the strength of its aggressive economic reforms. But earlier this month, Moody's Investors Service put Argentina on watch for possible downgrade, saying a global economic contraction had squeezed off the country's access to credit. "There are really these two well populated camps saying opposite things," said Lacey Gallagher, S&P's director of Latin sovereign ratings.

"One camp says, in a reasonable downslide scenario, countries like Argentina are going to be fine. The other is saying all Latin American countries are at risk."

Analysts believe Brazil holds the answer to which approach will prevail.If the country were to devalue its currency, the real, the ensuing damage throughout South America would bear out Moody'sdecision on September 3 to cut the long-term foreign currency debt ratings of Brazil and Venezuela. That same day, Moody's also placed Argentina and Mexico on watch for possible downgrade.

But if international lenders step in to avert a Brazilian debt crisis and the government enacts responsible fiscal reforms after October elections, S&P's approach may prove correct, analysts said.

Moody's actions suggest a negative view of emerging markets in general, while S&P's appear more "nuanced," said Thomas Trebat, head of emerging markets research at Citicorp Securities. "Moody's has been more up-front than S&P in moving to downgrade countries, which casts doubt on the ability of this market to recover and upon the need to carefully distinguish between different gradations of risk. S&P has moved more slowly," Trebat said, adding that he preferred S&P's approach.

Vincent Truglia, managing director of sovereign ratings at Moody's, said his agency believes that, whether specific countries have good policies orbad, Latin America has virtually lost its ability to raise new money.

The economic crisis that began more than a year ago with the devaluation of the Thai baht, and intensified amid economic chaos in Russia, has touched off a global flight from financial risk of all kinds.

Truglia said Moody's cut Brazil's ratings because the country carries a great deal of debt with a short maturity structure. He said Mexico and Argentina also carry heavy debt loads, which could become a problem if capital flows stay low.

"Despite the fact that Mexico and Argentina have made some major changes in their underlying economic structures, and that they're in far better shape than they have been historically, it does not mean they automatically have improved access to credit," Truglia said. "We are only measuring the potential risk of a default," he added. "If market access is closed and a country has a lot of debt to be rolled over, then there is a heightened risk of default." Unlike the Mexican peso crisis of 1995, whichwas resolved relatively quickly, Truglia said Russia's default and the prolonged languishing of East Asia have exacerbated the current situation.