Portugal, Which Has €20 Billion In Bond Maturity And Deficit Outflows In 2011, Has Only €4 Billion In Cash

Tyler Durden's picture

It seems there is just one market which the Fed is either unable, or unwilling to manipulate: that of Portuguese (and generally peripheral European) debt. And for good reason. As the WSJ reports, Portugal started the year with about €4 billion in cash: "Fresh borrowing and other public transactions suggest Portugal has this
year likely increased that number to around €4 billion. The official
said in an email that the figure had risen but didn't elaborate." There is one small problem: the country has a €4 billion outflow on April 15... and has to pay down €20 billion worth of debt maturities and budget deficits through the end of this year! Where the country will get this money... nobody knows. Just BTFD. But not in Portuguese bonds. As the charts below show that is still the only asset that can't find a greater idiot.

Portuguese CDS:

From the WSJ:

Portugal's leaders have said repeatedly that they don't need a bailout, and that a program of economic reform and austerity the country has embarked upon will convince financial markets to lend it what it needs. Portugal has been able to issue both long- and short-term debt this year, albeit at high interest rates.

The relatively small amount of cash Portugal has on hand stands in contrast with Ireland, which has roughly similar borrowing needs this year. But Ireland had about €13 billion in cash in its main accounts heading into 2011, plus tens of billions more in a pension-reserve account that has acted as a rainy-day fund.

Still, Ireland's huge exposure to government-guaranteed banking liabilities forced it into a bailout last year. Greece, which took a bailout last spring, did so because it couldn't attract enough borrowing at reasonable rates to meet two large bond redemptions.

The following can hardly be described as prudent Treasury actions:

So far this year, Portugal has raised €5 billion from selling short-term
Treasury bills and spent about €7 billion redeeming them.

But just like in the first week of January we expect Portugal's white knight (remember how two long months ago everyone thought Europe was about to implode...no?) will be China once again.

It wasn't immediately clear what Portugal has taken in through other vehicles, like retail savings bonds or private placements. Spokespersons for the Portuguese finance ministry didn't respond to repeated messages inquiring about the country's cash position.

And if China fails, Portugal can always come crawling with its "other vehicles" to the Fed. Ben would be more than happy to shower it with other taxpayers' money...

For those interested what Portugal's debt distribution looks like, here it is:

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FunkyMonkeyBoy's picture

4 billion i cash? The Bernanke prints that and throws it at the S&P500 in a two hour period daily.

... and still the citizen's of the U.S. do nothing to stop this rampant criminal.

.... when it comes crashing down i'll save my tears for the innocent, not the complicit docile masses.

jus_lite_reading's picture

Muthafuckers wanna run the NAS to 3000 and they'll get it, but not before there's blood split. Ohio, Wisconsin are boiling over...

plocequ1's picture

Nice chart. The only thing missing is The Glove and The Blue meanies. Oh yea, Happy BTFD to you too.

John McCloy's picture

"Happy BTFD" +1 

  That one goes directly into the ZH lexicon.

jus_lite_reading's picture

Who gives a shit? NFLX and APPL are UP and the DOW is UP 220 points! Hip Hip Horray! Nothing else matters but how much the "stock market" is up!

PS. We're just a few social unrest points away from chaos...


Oh regional Indian's picture

Countrywide asset selloffs have been happenign covertly for decades (well, centuries actually). And every such privatization or internationalization has such a long and boriing legal history that in a time of real need....easy.

China will eat up the world with money while the US flattens what's left with munitions.

Not a pretty future. You should see pictures of Chinese open pit mine managers in the Sudan.



YHC-FTSE's picture

"China will eat up the world with money while the US flattens what's left with munitions."

That actually made me say, OMG!. Black comedy at its finest.

Ahmeexnal's picture



If you want a vision of the future, imagine... a boot stamping on a human face --forever.
Oh regional Indian's picture

Ahmeee, can see it and it's not pretty. At all. More than half the world lives like that right now, only they can't see it.


John McCloy's picture

Anyone notice in the past year these dow "rallies" are beginning to appear more like a flatline on a heart monitor with a 1 degree angle? It is as if volatility has ceased to exist as long as the entire world believes that the Fed will price fix everything and backstop all debts. 

HelluvaEngineer's picture

Yep.  They set the price point pre market, then the machines take over, adding a subtle lift to everything.

newworldorder's picture

sarcasm on:

This is but a small ripple in the great ocean of global finance. Someone always comes to the rescue of the small and the indigent. Why - most Europeans could not possibley live without one of their PIGS.

Irwin Fletcher's picture

Only 5x leveraged? That's weak. 

Sudden Debt's picture



Damn. We're at near +3% in just 6 weeks and it's getting momentum.


IQ 145's picture


knukles's picture

Couldn't they just do a 5 for 1 cash split?
Send me off to Goldman, partnership material!

Sudden Debt's picture

1. Create a company

2. Sell all the land to the company

3. Allow the company with the land to call itself a country (for example Portugal II)

4. Default on portugal (which would be about 1 square feet big)




falak pema's picture

They should make you king of portugal, the defaulted one not the other. You could then have one square foot of kingdom. You would be the most sought after person in the world according to the inimitable formula of Coco Chanel : all zat is rare is priceless. King of the priceless! 

IQ 145's picture

 A description of Germany in 1923, with the Rentenmark. But of course, this is not what will transpire. So keep all that silver in the trunk of your car.  And  buy more, at two to one margin; at small private Austrian Banks readily available to you. Do it now. There is no other time. Cheers.

Johnk's picture

Just listening to Satyajit Das' FCIC interview, about 18 minutes in:

“Generally when there is a disaster in the world, there are four people that you always find at the zone of the disaster, looking crippled and deeply injured, and they start with the German landesbanks, the Japanese banks, and usually you find Citigroup and Merrill Lynch somewhere nearby.”







John Wilmot's picture

Europe will continue to need bailouts, the ECB and ultimately the Fed will provide them. Done deal. The only variable is political - if any of the EU members reject the bailouts (i.e. more debt), then things could get interesting. Or, if Germany refuses to support them. Not likely at all IMO, but something to keep in mind.

Dick Darlington's picture

Slovakia does and there's growing resistance in Germany and Finland. Slovakia refused to be a part of the Greek bailout and called it a ponzi scheme like it is. Here's Bloomberg's take on the situation:


cougar_w's picture

The Portuguese Navy once ruled the waves, and Portugal had colonies all over the world. Now down to their last $4B and stoically denying they are insolvent. For all the world like a formerly rich lady standing at the door to a pawn shop looking at her hand and taking off her last gold ring.

How the great have fallen. I'm looking at you, America.

FeralSerf's picture

40 years ago Portugal was a poor third world country.  Then the EU came along and made them an "equal" to the Germans.   If someone would make me an equal to the Rockefellers today, my first stop would be the Ferrari dealer.  I could use a new car.

All good things must come to an end.

America is a special case.  Never before in recorded history has a nation been given the right and the wherewithal to print the world's money.  When America finally turns tits-up, it won't be a Portugese disaster.  Everyone, including most of America's enemies, is not looking forward to this event.

YHC-FTSE's picture

A rare treat! That is a fantastic analogy, and an absolute gem of truth in the last paragraph.


Well done. +1

Translational Lift's picture

The US pawned that last gold ring a long time ago................

Saxxon's picture

I was in a pawn shop ('We Buy Gold!') in Pleasant Hill, Ca a few months back and actually saw a woman do that.

Ayn Rand's picture

No one in the EU or US cares about debt until the day they all care and then watch the shit hit the fan.

Misean's picture

Pffff...Portugal...It's not like they're Kredit-Anstalt or anything.

Sutton's picture

Carry me caravan,

Take me away,

Take me to Portugal

Take me to Spain

NotApplicable's picture

Doesn't Trichet have a magic checkbook, like The Bernank's?

Misean's picture

Yeah, but he has to borrow a pen from the German's.

IQ 145's picture

 Ya, Ya. Est humor. But really. how many ounces of silver are t here to go around in t he world population? Do you have yours and a hundred other peoples locked up ? Why not ? It would be a shame to be so knowledgeable; and not succeed brilliantly.

dearth vader's picture

And Changela sewed up his breast pocket as well.

pazmaker's picture

...and the EUR soars!!!

FeralSerf's picture

It's soaring in USDs, not ounces of gold.  It's all relative.

sulfur's picture

china wishes to buy in eu - us wants to buy into it - what i am wondering about is

are they playing together in means of chinese oligarchs and us oligarchs wanting the same

thing or are they really fighting each other

topcallingtroll's picture

The greater idiot is the ECB. They will buy most of the bonds.

And a hypocrit too for criticising the Fed.

Alcoholic Native American's picture

need more anonymous billionaires buying bonds

Blue Water's picture

Portugal also owns about $17 Billion worth of gold.

Weimar Ben Bernanke's picture

Is not Portugal a suburb in  Spain? Well the EU was,and is a failed experiment. I hope the EU fails so any idiots in the US,Canada,or Mexico want to have an American Union they will see it will fail badly. I guess we could have a two hit combo on the "global recovery," the EU collapsing and China having hyperinflation and their real estate nuclear bubble. Also the only reason China wants to save the EU is to have the EU arms embargo on them lifted. With this they can get their hands on advanced military technology like the US to gains supremacy in Asia.

sulfur's picture

well no portugal is a country west from spain :) true the eu has failed and they broke all of their own contracts but i tell you which rule they will not break the right to shoot people after martial law you will find it in the addendum to the eu constitution.

would be so nice if we the people could actually redefine the whole world (and germany which actually still runs under the constitution of the weimarer republic)  but i think they will bring the american union and desperately will try to keep the european one maybe under chinese lead.

after all a one world government is there over all target isnt it?

Non Passaran's picture

That's the first priority, then trade and political conessions/support.

Cashboy's picture

China is well advanced on its weapons but keeps it all low key.

China needs nothing from the West.

China's next move will be to buy Western companies with brands to add its own manufactured items to. China is relaising that Western Bonds will be worth nothing.

trav7777's picture

ECB or Fed or China comes to rescue.

If you think American imperialism is bad, wait till you see what type of regards the chinks have for environment and humans

metastar's picture


Someone with a cape, mask, gun, or helicopter will come to the rescue (this time).