It wasn't long ago that Argentina was a top tier player in the securitization market south of the border, but now that the country is scrambling to save itself from spinning further into the red, sources say debt default is almost inevitable. Perhaps even more discouraging is that the tail of the tornado just may knock the wind out of all emerging markets.

When Domingo Cavallo joined the Argentine government in the spring, market participants had high hopes. "If anyone was going to get the job done, it was going to be him," said one Latin American analyst. "He was the last bullet in the gun."

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