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Deplorable Portugal 12 Month Auction Validates Belgium Decision To Pull Sovereign Issuance Due To "Market Conditions"

Tyler Durden's picture





 

Earlier today Portugal had a deplorable bond auction of €1 billion in 12 month Bills, which saw the interest rate paid jump to nearly 4.5% even as general demand indicated by Bid to Cover plunge from 3.1 to 2.2. And even so, the bulk of the purchasing was from Asia, read China, as the last thing Japan needs now is to rescue a insolvent Portugal, according to a finance minister disclosure. From Reuters: "The 12-month T-bill yield rose to 4.331 percent from 4.057
percent in an auction on March 2, in line with analyst
expectations of around 4.3 percent and with the secondary
market. It also stayed below record levels seen in December." Alas, while Portugal purchased a few days of funding, it merely confirmed that it is now effectively bankrupt as paying 4.3% for 12 months worth of debt indicates the Rubicon has long been passed. Look for Portugal to be bailed out any minute. And in attempting to avoid the same fate, Belgium decided to "postpone" its own bond issuance of 6 year benchmark notes on concern investors will puke all over the paper. "
Belgium delayed the sale of a
new six-year benchmark bond on Tuesday due to market volatility
caused by the Japan earthquake and explosions at a nuclear power
station there. Plans to issue the new bond, maturing in June 2017, were
announced on Monday, with Deutsche Bank, KBC Bank and Morgan
Stanley mandated as joint bookrunners. The markets are so volatile at the moment and attention is
concentrating on what is happening in Japan," debt agency chief
Anne Leclerq told Reuters." Luckily unlike Portugal which has no choice but to raise debt at every opportunity, Belgium has the choice to await greener pastures. For now.

More from Reuters:

A new 10-year benchmark issued in January by Belgium also suffered from market volatility as books were being built. Its total size of 3 billion euros ($4.2 billion) was below the normal benchmark volume of 4-5 billion euros of previous years.

The debt agency said that an auction of three- and 12-month treasury certificates would still go ahead on Tuesday.

Debt levels of almost 100 percent of gross domestic product and the failure to form a new government over almost a year have put Belgium in the firing line of investors looking for the next candidates for bailouts in Europe's debt crisis.

Alas, the recent emergency of the black swan clusterflock means that March, already Europe's cruelest month before the whole MENA fiasco and Japan catastrophe, simply means very soon Europe will metamorphosize into merely the latest outlier black bird.

 


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Wed, 03/16/2011 - 08:23 | Link to Comment cossack55
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China will make great use of the Atlantic ports once they own Portugal.  Of course redundant, since they probably already own Spain.

Wed, 03/16/2011 - 09:39 | Link to Comment Zero Govt
Zero Govt's picture

Let's be crystal: China does not conduct international trade, private Chinese companies do. International Govts have fuk all to do with international trade, they're just windbags blowing in the wind of where the private sector leads.

Second the Chinese Govt is buying debt in Euro and US Govt debt. That is 'pegged' entirely on those Govts being able to tax private Co's and citizens. If these economies contract the likelihood of these Govts being able to repay the Chinese Govt drops dramatically (it will).

So this is a sovereign debt crisis approaching. Stupid Govts loaning their nations wealth to other stupid Govts squandering the wealth they borrowed. A sovereign to sovereign collapse.

The Chinese Govt (politicians) are making the same mistake as the German Govt (politicians) extending credit/wealth to insolvent Governments. The Chinese Govt are simply going to get burned, not gain control of ports or any foreign resources... just as the Chinese Govts own internal investments in China are wasting money on nonsense (empty new towns, public transport projects etc)

Wed, 03/16/2011 - 08:26 | Link to Comment Quintus
Quintus's picture

I think the headline should read 'Deplorable Portuguese 12 Month Auction.....'

Wed, 03/16/2011 - 08:34 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who wants to be paid in fiat?  King Dollar!

Wed, 03/16/2011 - 08:29 | Link to Comment Hammer Time
Hammer Time's picture

Manneke Pistches....

Wed, 03/16/2011 - 08:31 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Blythe is going to try and raid gold/silver right now.  Eat shit Blythe Masters.

Wed, 03/16/2011 - 08:32 | Link to Comment youngman
youngman's picture

I am suprised anyone is buying anything right now...I would be buying Gold and Silver if I was a sovergn wealth fund...4-5-25%...it does not matter when they can just print that interest rate away....

Wed, 03/16/2011 - 08:34 | Link to Comment Turtlelord
Turtlelord's picture

Belgium delayed the sale of a new six-year benchmark bond on Tuesday due to market volatility caused by the Japan earthquake and explosions at a nuclear power station there.

So, Japan is the new "winter" even if not (yet) a nuclear one.

Wed, 03/16/2011 - 08:35 | Link to Comment TexDenim
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Belgium has an economy smaller than than of a major American city. Who cares about Belgium?

Wed, 03/16/2011 - 08:51 | Link to Comment wandstrasse
wandstrasse's picture

Belgium hosts the sinister EU-administration - they DO care!

Wed, 03/16/2011 - 09:09 | Link to Comment Zina
Zina's picture

GDP of Belgium = 461 billion dollars

 

GDP of Virginia = 427 billion dollars

GDP of Georgia = 404 billion dollars

GDP of Massachusetts = 377 billion dollars

GDP of Michigan = 372 billion dollars

Wed, 03/16/2011 - 10:14 | Link to Comment TexDenim
TexDenim's picture

I stand corrected!

Wed, 03/16/2011 - 08:34 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

It's a great time to scuttle all radioactive markets.

Shoot a hole in your hull Slewie, and let her sink.

Wed, 03/16/2011 - 08:35 | Link to Comment fijisailor
Wed, 03/16/2011 - 09:06 | Link to Comment Larry Darrell
Larry Darrell's picture

No one with half a functioning brain believes this.

However, there was an article on CNBC yesterday saying 70% of those polled believe Benocide will stop the QE.

At least now we know statistically that once everything falls apart we are down to 3 of us for every 7 zombies.  I think we will have enough ammo.

Wed, 03/16/2011 - 08:36 | Link to Comment Yen Cross
Yen Cross's picture

The european pill poppers! Bund spreads.

Wed, 03/16/2011 - 08:40 | Link to Comment Mercury
Mercury's picture

I had no idea Belgium was in such relative dire straits.  They  seem to be a reasonably industrious people even if one of their main exports is red tape.  Also, the one time I visited there I became convinced that there were no children in the entire country. 

Wed, 03/16/2011 - 08:51 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

Jeremy?  Jeremy, is that you?

 


Jeremy Clarkson Meets the Neighbours - Belgium & Holland Pt 1 - http://www.youtube.com/watch?v=3Pke1mQmjwg

Wed, 03/16/2011 - 08:37 | Link to Comment pendragon
pendragon's picture

and yet the euro is only down 35cents....

Wed, 03/16/2011 - 08:41 | Link to Comment papaswamp
papaswamp's picture

Woo PPI blew past expectations. 1.6% rise. Housing starts and permits both dropped substantially. US trade gap higher than anticipated. Release the bad news now while everyone is looking at Japan.

Wed, 03/16/2011 - 08:43 | Link to Comment youngman
youngman's picture

Yeah makes me want to go out and buy Treasuries....

Wed, 03/16/2011 - 08:42 | Link to Comment PY-129-20
PY-129-20's picture

I don't want to bailout Portugal. I don't want to bailout Ireland. I don't want to bailout Greece. I don't want to bailout Belgium. I don't want to bailout Spain. I don't want to bailout Italy. I don't want to bailout Malta. I don't want to bailout Cyprus. I don't want to bailout German banks that spent our money on useless investment projects.

I want my Deutsche Mark back. *sigh*

 

Wed, 03/16/2011 - 08:44 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

PY, as least you are not in the US who has to bail everyone else out. Go Helicopter Ben! May you print your way to hades.

Wed, 03/16/2011 - 08:57 | Link to Comment wandstrasse
wandstrasse's picture

Servus PY! There was a nice commentary in FTD about the EU Rettungsschirm (=printing Euros in advance)... it went like: Why not expand the Rettungsschirm from 750 billion Euros to 5 PIMPILLION Euros? Or better: 39 TRIPSTRILLION Euros? Then one has not to expand it time and again...

Wed, 03/16/2011 - 09:48 | Link to Comment PY-129-20
PY-129-20's picture

Servus! Wie wäre es mit Fantastilliarden? Ob Onkel Dagobert seinen Geldspeicher räumt, um die Eurokrise abzuwenden? Man darf ja noch träumen. :)

Wed, 03/16/2011 - 08:42 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Sorry Tyler, Europe is not a black swan. You guys at ZH have been pointing out how hosed Euroland is for well over a year now. Kudos!

Wed, 03/16/2011 - 09:02 | Link to Comment Quintus
Quintus's picture

Sometimes, being early making a call looks exactly like being wrong.  It isn't though.

Wed, 03/16/2011 - 08:44 | Link to Comment oogs66
oogs66's picture

Any details yet on the new EFSF program?  Wasn't it designed to ensure smooth auctions? 

Wed, 03/16/2011 - 09:04 | Link to Comment kroegman
kroegman's picture

Belgium's economy is about the size of Ohio, so still bigger than a regular major US city. Not negligeable indeed.

Wed, 03/16/2011 - 09:42 | Link to Comment Zero Govt
Zero Govt's picture

Belgium is small but a European domino nontheless ...when they topple the fear it spreads is real enough!

Wed, 03/16/2011 - 09:44 | Link to Comment ivars
ivars's picture

More reasons to validate the actual results of DJIA and oil prices vs. these February 6th predictions- the drop in stocks will continue as Oil will eat away all QE effect and flight for safety will keep USD high-there is a slight hiccup in June perhaps by QE3. But it won't last long because of rising oil prices.

 

The DJIA graph actually accurately predicts todays DJIA value, 1,5 months ahead, so the slope of decay from market top is accurate as well:

http://www.saposjoint.net/Forum/download/file.php?id=2608

http://www.saposjoint.net/Forum/download/file.php?id=2609

 

 

 

 

 

 

 

 

 

Wed, 03/16/2011 - 10:01 | Link to Comment AldoHux_IV
AldoHux_IV's picture

It's so funny listening to these douchebags sound so confident about their worthless paper. 

Wed, 03/16/2011 - 10:25 | Link to Comment tiger7905
tiger7905's picture

And Portugal has added in some good old fashion protests to boot...

http://goldandsilverlinings.com/?p=252

Thu, 03/17/2011 - 01:08 | Link to Comment entirecarhire
entirecarhire's picture

Its reaaly nice post.I have latest news about Portugal,Portugal Car Hire is the place to book your holiday car hire and make the most of your visit to Portugal.

http://www.entirecarhire.co.uk/portugal_car_hire.htm

Dave Wilson

 

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