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Summarizing The Reactions To The Portuguese Bailout

Tyler Durden's picture




 

Following weeks and months of lies that Portugal does not need a bailout, that is is not Ireland, Greece, Algeria, Tunisia, Egypt, Middle Earth, Uranus, etc, the country finally realized it is bankrupt, unless it comes, hat in hand, bagging for a bailout from Jean Claude Trichet (who now is scratching his head how to spin this latest sovereign default as bullish ahead of tomorrow's rate hike). Which it just did. Reuters has compiled the reactions by those who felt like sharing their views on this foregone conclusion.

KEY POINTS: * Portugal's situation worsened last month after the government resigned, sending bond yields soaring, sparking a series of rating downgrades and a warning by local banks that they may no longer be able to buy government debt. * "In this difficult situation, which could have been avoided, I understand that it is necessary to resort to the financing mechanisms available within the European framework," said Finance Minister Fernando Teixeira dos Santos.

VASSILI SEREBRIAKOV, SENIOR CURRENCY STRATEGIST, WELLS FARGO, NEW YORK:

"It's somewhat puzzling this lack of euro reaction to Portugal admitting it needs aid. I guess the market is viewing this news as a foregone conclusion. This is a big financial step for Portugal and it's obvious that Portugal cannot finance itself. As to why the euro doesn't care, there are other themes playing out in the market. Investors are obviously focused on the ECB rate hike on Thursday. And in an environment where yield is the market's main focus, investors are bidding up the euro because of the prospect of more interest rate increases."

DAVID LEDUC, CHIEF INVESTMENT OFFICER, STANDISH, A DIVISION OF BNY MELLON ASSET MANAGEMENT, BOSTON:

"In general, we've been concerned about Portugal's fiscal challenges and not only think they need short-term financial help but also a high probability that Portugal has to restructure their debt.

"We remain concerned about it and the political difficulties add a challenge to what they have to do.

"The political stress and economic difficulties highlight the severe challenge Portugal and other countries have in pursuing austerity packages. When you can only control fiscal policy, not monetary policy, then you don't have all the levers available. When you only can cut and can't do other things to make yourself more competitive, such as devaluing your currency, that's a challenge."

DAVID DIETZE, CHIEF INVESTMENT STRATEGIST, POINT VIEW FINANCIAL SERVICES, SUMMIT, NEW JERSEY:

"In some ways it is a positive -- I think Portugal was in denial. On this side of the pond no one understood exactly how Portugal was going to be able to dig out of its problems without getting aid. We have seen Greece and Ireland ultimately have to go hat in hand, and traders every day have been looking at the widening spreads between the German sovereign debt and the Portuguese sovereign debt and wondering how it all ends."

ERIC GREEN, CHIEF ECONOMIST AND HEAD OF RATES STRATEGY, TD SECURITIES, NEW YORK:

 

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Wed, 04/06/2011 - 15:32 | 1142338 centerline
centerline's picture

"In some ways it is a positive"  - LOLOLOLOLOLOL

Wed, 04/06/2011 - 15:37 | 1142360 SheepDog-One
SheepDog-One's picture

'In some ways it is a positive'...hmm guess he must be looking at a gold chart.

Wed, 04/06/2011 - 16:18 | 1142570 Highrev
Highrev's picture

The "positive" is that it's small potatoes compared to the problems the U.S., Japan and China have.

VASSILI SEREBRIAKOV, SENIOR CURRENCY STRATEGIST, WELLS FARGO, NEW YORK:

"It's somewhat puzzling this lack of euro reaction to Portugal admitting it needs aid.

Put that next to the U.S. Federal Gov., the States and Locals, the trash that the Bernank has on his balance sheet (and the major U.S. banks) and I think it's a lot less "puzzling".

 

 

Wed, 04/06/2011 - 17:27 | 1142811 Cleanclog
Cleanclog's picture

Worries about Portugal are interesting and expected.  But look at Oakland, California.  With a $45 million deficit, city council considers an $11 million dollar parcel tax measure to put before voters, and Mayor suggests Oakland could loan itself the $11 million and make it up if tax passes to collect the tax the next year. http://bit.ly/fOVhWp

How can they lend themselves $11 million they don't have.  Yet another creative way to increase debt.  Stop stop stop already!

Wed, 04/06/2011 - 21:45 | 1143735 Ahmeexnal
Ahmeexnal's picture

Portugal's denial was identical to a wino stating time and time again "I don't have a drinking problem". Now that Portugal has come out of the closet, it's "GIMME MY BOOZE!".

Major war is about to break out between EU members.

It's already priced in. BTFD!!

Wed, 04/06/2011 - 22:51 | 1143913 FeralSerf
FeralSerf's picture

It's only a problem when one runs out of his beverage of choice.  The wino, his muscatel; Portugal, her euros.

Thu, 04/07/2011 - 01:25 | 1144328 dark pools of soros
dark pools of soros's picture

no worry..  Bernake will put them all on the NIghtTrain..

Wed, 04/06/2011 - 16:37 | 1142631 willien1derland
willien1derland's picture

+1 - of COURSE it is POSITIVE - the ability to reckon & gauge reality is of vital importance to survival - See Charles Darwin Origin of Species...survival of the fittest...or perhaps the most positive - tragic irony...poetic justice - your call folks...Time to visit the Mr. Xanax....Goooz Frabah.... 

Thu, 04/07/2011 - 01:20 | 1144324 Urban Redneck
Urban Redneck's picture

Darwin wrote about evolution in the natural world.

All the BS about teaching Darwin is indicative of the failure of our education system, as the history of humanity is an ongoing attempt to nullify the applicability of the theory of evolution to the human race.

In the natural world there is no mechanical or biomedical engineering to lengthen the lifespan or increase the reproduction of inferior species.

In the human world there is the printing press, which enables the inferior bernankus stupidus  to not only survive longer than it otherwise would (in a natural world), but to reproduce in any location with a central banking facility. 

Thu, 04/07/2011 - 05:15 | 1144483 chistletoe
chistletoe's picture

Actually, that was a fascinating comment.

Herbert Spencer and others popularized an economic theory called

"Social Darwinism" in the late 1800's

(also called "laissez-faire capitalism") which became the basis,

or rationalization,

for the rise of the extreme wealth of the 1900's robber barons.

It was only the intervention of the US government under Teddy and others,

bringing the rise of government regulation,

which rescued our country from class warfare.

 

How times do change!

Wed, 04/06/2011 - 17:22 | 1142800 gorillaonyourback
gorillaonyourback's picture

exactly, if you're a masochist and like austerity shoved up you ass, its a big positive. lololol

you ever wonder when the piigs are go to say to the ecb "take this austerity and shove it, it aint workin here no more" i mean really default and start printing its own money

Wed, 04/06/2011 - 15:33 | 1142340 Ancona
Ancona's picture

No reaction? They had better react, because the dominoes are starting to fall. The conclusion to this will not be pretty.

Wed, 04/06/2011 - 15:57 | 1142461 Cdad
Cdad's picture

Well, the criminal syndicate known as Wall Street just staged an S&P breakout...and no one showed up.  So I guess failing to react to things is the new thing.

You know, the complete lack of participation in this market is just sad.  This once great nation...

Wed, 04/06/2011 - 16:06 | 1142489 SheepDog-One
SheepDog-One's picture

Dang, they staged a market rally, and no one showed up? And there was Timmah and Bernanke dressed in their best belle of the ball evening gowns waiting to greet everyone, so sad. The markets once the pinnacle of world economy now lay in ruins, only participants a small group on each others speed dials, with no hope of anyone trusting them in the least bit ever again. Print that, Bernanke!

Wed, 04/06/2011 - 16:27 | 1142591 Highrev
Highrev's picture

Post March 2009 highs on the Dow and the Composite.

Breakouts higher in the financials.

Wed, 04/06/2011 - 16:35 | 1142622 Cdad
Cdad's picture

with no hope of anyone trusting them in the least bit ever again.

Dog,

And despite the truth of your statement, the layoffs still have not come, and the prosecutions are nominal...basically, three insider trading cases involving a nominal number of individuals.  This is how we know we are still in crisis, Dog.  

Unless and until the criminal syndicate known as Wall Street is right sized and cleaned out of its criminal elements, including the thousands of individuals involved in mortgage/MBS fraud, there is no reason for capital to form and move into equities.  And so the Bernank can "print that," but his printing only leads to a greater and greater measure of distrust. Thus, he can never exit the Ponzi scheme...and his counterfeit dollars represent the investment of the last greater fool in.

There is no replacing "trust" in any financial entity.  


Wed, 04/06/2011 - 16:35 | 1142623 Caviar Emptor
Caviar Emptor's picture

The people and governments of the earth had long since annihilated each other using nuclear waste and biological agents. But the HFT bots still dutifully fired up each morning and traded with one another. By the end of each week the market ticker was always green, a color that no longer existed in the world. 

Wed, 04/06/2011 - 16:11 | 1142541 cosmictrainwreck
cosmictrainwreck's picture

I just love it, Cdad, how you always say: "the criminal syndicate....." :)

Wed, 04/06/2011 - 16:40 | 1142659 Cdad
Cdad's picture

Right now, criminal syndicate bankers have essentially formed a new party, having gotten together with crony capitalist corporations and soft headed DC politicians.  I call that new powerhouse the new American Marxist/Banker party

These things need fixing.  Until they are fixed, I shall continue to call them what they are.

Wed, 04/06/2011 - 15:37 | 1142352 SheepDog-One
SheepDog-One's picture

Its all good man, here suck up a bunch more Hopium smoke.

Wed, 04/06/2011 - 15:37 | 1142359 ZeroPower
ZeroPower's picture

Hey look, EURUSD >1.43s!

If its not a full 100bp higher tomorrow from the ECB, might be the end of the squeeze..

Wed, 04/06/2011 - 15:42 | 1142395 slaughterer
slaughterer's picture

EURUSD >1.43 blew through the pivot that GS gave us in last weekend's "kick start."  Gee, thanks for that good advice, squid.

Wed, 04/06/2011 - 16:38 | 1142627 Highrev
Highrev's picture

Currently in a daily profit taking zone and just below very long term horizontal support/resistance.

This is a big level for the EURUSD.

Bullish above, bearish below big.

 

Add: It's been said that the USD is trading an equally important level. ;-)

 

Wed, 04/06/2011 - 15:39 | 1142376 oogs66
oogs66's picture

Maybe we can turn the good bank/bad bank into good euro/bad euro. For every current euro you get some good euros backed by germany and holland and France. And some less good euros backed by the rest. They can have separate interest rates etc and politicians can be happy because they didn't have to abandon the euro.

Wed, 04/06/2011 - 15:40 | 1142379 camoes
camoes's picture

I said it already and say it again it's the BUY ANYTHING THAT HAPPENS F'CKING DIP SCHEME! Tell your friends and family!

Wed, 04/06/2011 - 15:43 | 1142386 Mae Kadoodie
Mae Kadoodie's picture

"traders every day have been looking at the widening spreads between the German sovereign debt and the Portuguese sovereign debt and wondering how it all ends."

well.. wonder no more.

Wed, 04/06/2011 - 15:46 | 1142391 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Why the need for aid? Sell all that gold you have portugal.

After all, what's the point in having all that gold, if not for times in need like these? Well?

26 Jan 2011:

Value of Reserves: $18.21 billion 


Holdings Total: 421.6 tons 

Wed, 04/06/2011 - 15:47 | 1142417 DoChenRollingBearing
DoChenRollingBearing's picture

No, MUCH better for Portugal to get a bailout and keep their gold!

Hahaha, Germany!

Wed, 04/06/2011 - 15:49 | 1142428 SheepDog-One
SheepDog-One's picture

Seems countries gold reserves are simply for when the people riot and the leader takes off with the gold in the cargo hold.

Wed, 04/06/2011 - 15:57 | 1142460 youngman
youngman's picture

There is a lot more gold buyers in Portugal tonight as they just found out their government was lying to them....LOL

Wed, 04/06/2011 - 15:46 | 1142412 sabra1
sabra1's picture

do the germans know about this?

Wed, 04/06/2011 - 16:22 | 1142590 Josh Randall
Wed, 04/06/2011 - 17:15 | 1142776 PY-129-20
PY-129-20's picture

Yes, we know about this. And all those German media whores (think of CNBC alikes) are finally admitting that there is a problem with the bailout parade. Even the financial media is printing more Euro-critical articles lately.

Thu, 04/07/2011 - 01:29 | 1144335 dark pools of soros
dark pools of soros's picture

who's the German Becky Quickie???

Wed, 04/06/2011 - 15:50 | 1142423 Misean
Misean's picture

In denial!?!?! OMFG! Thank you Dr. Phil! Now we have whole countries that create a positive by admiting a negative! ROFLMAO!

Wed, 04/06/2011 - 15:50 | 1142434 SheepDog-One
SheepDog-One's picture

'Encounter group therapy' world economic model!

Wed, 04/06/2011 - 15:51 | 1142437 TaxEstate
TaxEstate's picture

I can summarize the stock market's reaction in one word: Yawn.

Wed, 04/06/2011 - 15:52 | 1142446 SheepDog-One
SheepDog-One's picture

Nukes could be raining down from the west to east coast, and the DOW would be up +40.

Wed, 04/06/2011 - 16:05 | 1142507 TaxEstate
TaxEstate's picture

Yes, great for GDP as the rebuilding process begins. Perhaps all Amercians just need to burn down their homes, and drive their cars off a cliff- that will bring back prosperity to America.

Wed, 04/06/2011 - 16:09 | 1142521 SheepDog-One
SheepDog-One's picture

Nah, now WW3 begins, its kicking off in the mid east big time. ALL this BS from 2008 on was for the global elites to suck up all the wealth, now its time for world war and mass population reduction. Everything else is smoke and mirrors hiding from the real truth.

Wed, 04/06/2011 - 17:20 | 1142797 PY-129-20
PY-129-20's picture

You could create a great campaign - support your nation today and drive your car off a cliff!

Wed, 04/06/2011 - 15:53 | 1142444 M.B. Drapier
M.B. Drapier's picture

What's up with the tightening in IIGS sov. debt at the moment? ECB buying again?

Wed, 04/06/2011 - 15:53 | 1142449 falak pema
falak pema's picture

portugal is peanuts like greece...now Spain...where the rain falls mainly on ...is another financial plane

Wed, 04/06/2011 - 15:57 | 1142474 Herman Strandsc...
Herman Strandschnecke's picture

'The Rain In Spain Fall(out)s Mainly on The Plain'

Wed, 04/06/2011 - 15:57 | 1142472 claycalhoun
claycalhoun's picture

Spain next??

 

....... and then ? Italy maybe?

 

........and then ? 

 

The whole debacle is a fraud of gigantic proportions!!

Wed, 04/06/2011 - 16:22 | 1142583 claycalhoun
claycalhoun's picture

Who is going to default and give up the Euro, nobody until the Germans decide to go back to the deutschmark

Wed, 04/06/2011 - 16:46 | 1142691 willien1derland
willien1derland's picture

Not to mention that the Greek banks are the PRIMARY lenders to Eastern Europe - and the French Banks hold the majority of Greek Sovereign Debt

Wed, 04/06/2011 - 18:03 | 1142954 claycalhoun
claycalhoun's picture

Looks like it's inevitable that this is going to end in 'defaults'

Wed, 04/06/2011 - 16:04 | 1142495 monkeyfaction
monkeyfaction's picture

It's only a matter of time before they have to ramp up the Euro printing presses to Bernanke speed.

I'm betting there will be no rate rise tomorrow either.

Wed, 04/06/2011 - 16:12 | 1142538 CheapKUNGFU
CheapKUNGFU's picture

All your bailouts are belong to us, make your time...

on gold, they claim to have 18.2 billion, but are we sure its atually inside the country in BULLION?

next up, Spain, then Italy...

 

Wed, 04/06/2011 - 16:14 | 1142553 youngman
youngman's picture

Has Spain denied three times yet or only two...its three and your bailedOUT...

Wed, 04/06/2011 - 16:16 | 1142561 What_Me_Worry
What_Me_Worry's picture

"I always laugh when I hear of another Euro country that must ask for a bailout.  Do they not realize they can just make pretend money whenever they want and drop it from helicopters over the bankers' estates?  Surely this must be better than going to ask Triscut for a loan above 1%.  Just tell your people that printing money does not cause inflation.  Hyper-inflation cannot happen as long as I don't physically print all these trillions, so we're cool."

THE BERNANK, CHIEF CHAIRSATAN, FEDERAL RESERVE BANK

Wed, 04/06/2011 - 16:25 | 1142593 Ferg .
Ferg .'s picture

EUR/USD . I believe " lol " is the only appropriate response .

Wed, 04/06/2011 - 16:26 | 1142597 gigeze787
gigeze787's picture

Maria B. suggested on CNBC that Qatar might bail out Portugal...

The Q. sheiks will need a nice quiet country with plenty of willing serfs when THEIR revolution happens...

Wed, 04/06/2011 - 16:45 | 1142671 Caviar Emptor
Caviar Emptor's picture

and meantime they can cherry pick some prime property, vineyards and arable land. 

Wed, 04/06/2011 - 23:05 | 1143966 Ahmeexnal
Ahmeexnal's picture

Emphasis on ARABle land.

Wed, 04/06/2011 - 16:34 | 1142607 maxcody
maxcody's picture

The E.U. will split into North & South after the Pigs default and refuse to pay their debt.

Germany is on a short lease until their people dump Merkel.

Wed, 04/06/2011 - 16:37 | 1142640 irishlink
irishlink's picture

We in Ireland always knew that this is why Barrosa almost bit the head off MEP Joe Higgins from Ireland when he wondered why Irish taxpaters ,present and future should fund a bail out of irrisponsible investors, bankers and speculators.

Wed, 04/06/2011 - 16:40 | 1142648 Caviar Emptor
Caviar Emptor's picture

A bigger picture: the bailouts have solved none of the underlying problems and imbalances. There has been no cleansing. So we'll go from round to round of sovereign and bank bailouts across the planet. But each time the productive economy of each country and of the world will shrink a bit more since capitalism is being short circuited. Until eventually all that will be needed is food, shelter and cable. So the central bankers will have finally found their perpetual motion machine: bailouts and food stamps with money printing to pay for it all.

Wed, 04/06/2011 - 16:43 | 1142664 magpie
magpie's picture

Had a silly idea of all EMU countries defaulting, and austerity exactly within the original norms of the Currency Pact. The haircut of all haircuts.

Just a dream (sigh).

Wed, 04/06/2011 - 16:49 | 1142696 frenchie
frenchie's picture

ironic

serebriakov... srebro (in polish) means silver

Wed, 04/06/2011 - 16:51 | 1142713 Highrev
Highrev's picture

Remember Nouriel Roubini talking back in 2008 about the possibility of the international financial system breaking up into sub-systems that will do their best to survive until a new equilibrium is reached?

I think this is what's happening. I've been thinking this way since early 2010. There's lots of "evidence" of a financial war between readily identifiable geopolitical regions.

Wed, 04/06/2011 - 16:59 | 1142741 chinaguy
chinaguy's picture

Portuguese bailout = ECB printing money = more liquidity pumped into the market = good times roll = bullish......

 

 

Wed, 04/06/2011 - 17:27 | 1142810 Gordon Freeman
Gordon Freeman's picture

Ain't nothin' but mo' GOOD NEWS!!  Man, it's ALL good--all around the whole, wide world!  GOOD, GOOD, GGGOOOOOOOOOOOOOOOODDDDDDDDDDDDDDD!

Wed, 04/06/2011 - 17:28 | 1142821 All is chosen
All is chosen's picture

What's all the fuss? - Sweet little country. Harmless. Beautiful scenery. Great beaches, esp. the west coast. It should be on permanent assistance for these reasons alone; like for instance, the Berlin Phil. Expecting it to be a stand-alone economic power house is ridiculous!

Wed, 04/06/2011 - 18:13 | 1142997 Reese Bobby
Reese Bobby's picture

Exactly.  We aren't talking big numbers to bail out these beer swilling lay-abouts.  Being an ugly people doesn't make a people unworthy of free money.  Total non-story.  It's not like Spain or Italy are in the same situation...

Thu, 04/07/2011 - 00:05 | 1144146 StychoKiller
StychoKiller's picture

So, you don't have anything good to say about the beaches on the East Coast? </sarc>

Wed, 04/06/2011 - 17:44 | 1142873 PulauHantu29
PulauHantu29's picture

No worries, the American Taxpayer will foot the bill via The Fed.

Wed, 04/06/2011 - 18:20 | 1143041 All is chosen
All is chosen's picture

Thxs, most kind. You wont be offended if I have an emergency back up country, just in case you default? ;)

Wed, 04/06/2011 - 18:51 | 1143186 thebark
Wed, 04/06/2011 - 19:31 | 1143291 Buck Johnson
Buck Johnson's picture

Everyone is delaying the inevitable.  And that is the Western banking system is done and it's time for another shift.

Wed, 04/06/2011 - 22:01 | 1143773 Element
Element's picture

In other words (as I wrote in the other thread);

</smile like nice polite pseudo-'western' duel-national banker=on>

"we've sunk the ship of state, yada-yada-yada, and are getting the fuck out now while the getting is still good. Sorry the country is bankrupt and the bond market will not go near suckers like you, yada-yada-yada. However, we have signed you up to commitments you can not possibly afford, in order to drain every last drop of economic blood out of you, yada-yada-yada, before you starve and riot, and tell the bankers to fuck themselves. At which time the Banker's 'B-team' will be sent in, and the IMF, while protected by the police-state we built for them, will ensure you never recover, yada-yada-yada. And so that you don't dare default or they will starve you into submission-ary-position, and rape your arses until they bleed, yada-yada-yada.

And if that does not subdue you into neo-slavery, we send in the C-Team of agents-provocateur, to start a civil conflict that will completely consume and destroy your shitty little excuse for a society that we have thoroughly corrupted to divide and overturn, yada-yada-yada, and then we win again, and form a new Govt that corrals you into a new and better 'peace', with a massive security regime to deal with the rabble-rouser terrorists among you ...thanks for playing ... you donkey-goyim schmucks ... have a nice day!"

</smile like nice polite pseudo-'western' duel-national banker=off>

Did I leave anything out?

They can keep talking up 'the marketz' and bailoutz and 'the recovery', all they want, but the neo-liberal zionist-owner-operated FIRE sector crime-wave that the MSM quaintly calls the 'global economy', is collapsing all over the world, and we know who it was that weilded the tools of that destruction and corruption.

Fri, 04/08/2011 - 23:31 | 1152679 tomster0126
tomster0126's picture

Here's my reaction: suck it, Europe, we don't need you!  Iberians = lazy, do Americans take time off during the day for a siesta?  Do we party until 5 in the morning and sleep until noon?  I refuse to pay for Portuguese aid as a taxpayer.

 

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