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Portugal Reminds World That It, Too, Is On The Bailout Wagon
It is as if Europe is trying to kill the Euro (just as we predicted): the FT reports that according to Fernando Teixeira dos Santos, Portugal's finance minister, the risk that Portugal will have to turn to the international community for emergency financial assistance is high because of the growing dangers of contagion through financial markets that fear the eurozone debt crisis will spread. "The risk is high because we are not facing only a national or country problem. It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country." And just to make it appear sightly less palatable that Portugal is now pointing a loaded gun at its head, dos Santos threw a little of the blame all around: "This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely. It is not because markets consider we have similar situations. They are only similar in what concerns markets, but as I said they are very different. Markets look at these economies together because we are all in this together in the eurozone, but probably they could look different if we were not in the eurozone. Suppose we were not in the eurozone, the risk of the contagion could be lower." And while we are on the daydreaming page, suppose the Euro did not exist: things may have been just a little different, roughly in line with what the euroskeptics have been saying for almost two decades now. Suppose the Fed did not exist either...
Some more amusing clips from dos Santos via the FT:
Mr Teixeira Dos Santos also said that the average cost of borrowing for Portugal was 3.6 per cent. If rates stayed the same for the next three years, then the average cost of borrowing would increase to 4.9 per cent, he added – lower than the expected cost of borrowing of 5 per cent for a country that uses the EFSF.
Portugal does not need to tap the markets again for medium- or long-term bonds until the start of next year, although it has two large debt redemptions in April and June. This means that ideally it should start borrowing again from the markets in January to make sure it has the money to refinance these loans.
And what would a Portuguese statement be without the wanton soccer reference:
The finance minister also stressed that European policymakers needed to improve their communication to markets and investors to prevent undermining sentiment and sparking sharp sell-offs.
“Our budget proposals were positively received by the markets, then things were reversed because of the uncertainty around the permanent mechanism for dealing with bail-outs,” he said, referring to the European summit on October 29, when plans for a rescue mechanism to succeed the existing European Financial Stability Facility were outlined in a Franco-German initiative.
“We were like the soccer player running to the goal and ready to kick for the goal, and then someone fouls us . . . but this time there was no penalty.”
Don't worry, with Ben Bernanke as the head referee, there will be no penalty ever again.
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No Problem...POMO will fix everything, everywhere.
The currency wars have already commenced, albeit unannounced. The Fed announces another $600B, the EU counters with "bad news" just as I and many others like ZH predicted. Japan is next to attack... mark this post.
Whole world like a bunch of drunken bums arm in arm staggering down an alley.
That is prolly one of the best analogies Ive heard!
"Portugal, it was nice while it lasted, but we hardly knew ya."
-Yours truly,
Eurozone
I am awaiting for the Spanish contagion to hit soon, and it will kill (albeit financially) like it did in 1918. When Spain hits, watch out for the financial mushroom clouds to pop up all over Eastern/Western Europe.
Portugal, exit stage left. Ireland, exit stage right. Spain, Implode where you are.
Italy? How come italy get's so much love? Economy in tatters, Silvio Hooking away.... was this a script?
Greece first, then Ireland, then Portugal, then Spain, then Italy?
I think it's the Vatican Mafia effect. They cannot have fires in their back yard.
Seriously, Italy is clearly the biggest problem. Portugal is already on the China Bandwagon. The other piglets will follow into China's bosom. The anti-QE move. Deviant Dollar Deployment. Why buy the water rights when you can buy the whole damn country?
What will Spain and Italy, so near the heart of the EUxperiment, do?
ORI
http://aadivaahan.wordpress.com
Italy has only been able to hide it better than the others, probably due to their soap opera of a political system. Italy will be an instant implosion the minute Spain pops out from under the ECB covers, and is naked as the day they were born.
firstdivision, I agree.
I also think having the Vatican in their midst gives them a certain, shall we say, "clout", beyond their bumbling image.
ORI
http://aadivaahan.wordpress.com
http://www.youtube.com/watch?v=L2mHPjUuksE
Cant wait to buy cheap port wine, better than the Greek olives
what else do they make in portugal? cork?
mhh, ahhh, scratching my head, dont know!
cork + wine = self-sufficient economy
Germany is not so independent.
Not so anymore. The Germans can just use synthetic stoppers produced locally.
Bad drivers count?
Hey,
I resemble that remark ;-)
Like Spain, they seem to be manufacturing-heavy.
I can just picture a battle royale on the soccer field with all the european heads of state, stapping each other, depatitating each other and pissing off as much debt into the corpses of their fallen comrades who either did not spend enough, spent too much or committed some other foul; with the occasional suicide to get super extreme; and then the Bernanke prancing around and dropping dollar bills on them and absorbing all the self mutilating euro bleeding.
I agree with 'Oh regional Indian' and believe a whole handful of EU countries will drag the Euro down against the US Dollar providing a nice pull back at over the next few months perhaps before seeing the likes of the EUR/USD eventually continue long? We will know more once the EUR/USD hits 1.3200-1.3300 level.
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Alex
what a world comedy: Ben We need QE2, Europe look at how bad our members debts are..,japan we will stimulate,
China, raise rates..
whats out of place??
Allied Irish Bank now up 40% from the lows....
Penny stock!
What's 40% of nothing? :)
Don't ever, but ever trust what this fraudulent socialist clown says.
It doesn't matter if Portugal have a budget.
It will not be respected.
Teixeira dos Santos is one of worse finance Ministers ever, the 2009 budget failed totally instead of defict of 2-3% it got 9% and he lied up until after Government elections of Autumn 2009. At elections time he said that deficit was around 5%, one month later after elections he said the deficit after all wasn't 5% but 9%.
The 2010 deficit is the same story.Budget reduced 9% deficit to 7% deficit on paper. Not respected.
It's like a guy going into a pawnshop and sells some jewelry. It's not enough money so he comes back a week later with costume jewelry.
The pawnbroker looks at it and says he won't buy that garbage.
The guy pulls out a gun and holds it to his own head and asks "Going to buy it now?"
Pawnbroker: You're pointing the gun at yourself! Why would that make me buy this garbage?
Guy: Because buying it will only cost you a few bucks. But if I blow my brains out, it's going to cost you a whole lot more than that to clean up.
At which point, if I were the Pawnshop owner, I'd say: "Hang on, lemme pop up some popcorn for the show, first!"
This is getting ramped up, especially after QE2 was initiated. I've been wondering what Bernanke saw that no one else is seeing that required him to hurry up and push this out. I think it has to do with his deflationary spiral, but what is happening is that (as one thread poster put last week) we are having value deflation, which is hidden inflation. Where we have smaller bottles or less value from the product for the same or higher price. We've had inflation, they just have hidden it. Now he's cranked up the presses and it's causing the inflation but alot more than he thought.
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