You seriously think Brazils performance dropped? Of course it did, but they are still the best team in the world. In 2002 they probably had the team of the decade with Ronaldo, Cafu, Ronaldinho Roberto Carlos and Rivaldo in their prime. Spain is an overrated team. Yes they won the European championships but the confed cup was a perfect example of their typical choking. Greece won Euro 2004 what did they do in the last 4 years or France after 2000? Can Spain send out a B or C team and beat teams like France or Russia? Brazil would smash france or Portugal. Remember when Brazil gave Portugal a 6-2 ass whipping last year? That waswhen they were playing "bad".
Also Italy being a strong contender is a joke. The squad tehy have is largely unchanged from 2006 and they players they brought in are average. They failed badly at Euro 2008 and Confed Cup. They need some fresh new blood. The strongest contenders are England, Germany, Brazil, Spain, and Holland.