Morgan Stanley says the market hasn't focused on a key possible outcome when considering Venezuela's political outlook. Many expect President Hugo Chavez to win re-election next month but not serve a full term because of health concerns, triggering a new election. But Morgan Stanley says Venezuela's constitution could be revised to allow Chavez to handpick a successor, keeping the political establishment unchanged. And "absent a material policy shift, we see rising risk of a financial accident," with increased "risk of default for Venezuela's $100.6B stock of external debt, especially if oil prices were to tumble."
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