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Has The ECB Given Up On Portugal?
Despite disappointing auction results in France, the downgrade hangovers (sell the rumor, buy the news?), and increasingly likely Greek PSI talk epic-fail, most European sovereigns are rallying modestly on the day. Given the expected shift in the AAA benchmark used for margining (dropping higher yielding France 'AAA's as they are downgraded will lower AAA benchmark significantly and implicitly widen the yield differential for other sovereigns), it is perhaps no surprise that TPTB are active in BTPs (Italian bonds) but it appears that Portugal (admittedly illiquid) has been left to its own devices. Portuguese 10Y bond spreads to bunds just broke 1250bps, +180bps on the day and at record wides. Given the subordination concerns as ESM is accelerated, it is perhaps no surprise that the ECB's SMP has seemingly decided that Portugal has crossed the Rubicon into Greece territory.
Chart: Bloomberg
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How much Au does Portugal have? Now, what about the UK?
Great question.
Greek central bank gold is worth $5.8 billion.
Portugal, also holds a significant amount of precious metal dating back to the days of António de Oliveira Salazar's regime. Instead of aid, Lisbon could have converted its $19 billion worth of gold into cash.
Exactly what the ECB wants them to do.
Astute question, but here's a (perhaps) better one...
Why are the following numbers of gold holdings and percents of forex reserves significant? Anyone notice something? Is Germany jealous of other countries' percentages? Does size (or relative size) matter?
2 Federal Republic of Germany 3,396.3 73.7% 4 Italian Republic 2,451.8 73.4% 5 French Republic 2,435.4 71.8% 14 Portugal 382.5 89.2% 32 Hellenic Republic 111.7 81.3%My only question- when does Germany start to try to eat France also?
Check here for "official numbers" from the world gold council:
http://www.goldseiten.de/bilder/upload/gs4f13ec63bc41d.png
thanks.
what does "percentage of reserves" refer to?
% of currency reserves
The UK is silent because they are the worst in the whole EU. And I mean in the Trillions.
Anyone know what Spanish exposure to Portugal is ?
More than they can afford to lose, I suspect.
http://graphics.thomsonreuters.com/11/06/EZ_BNKEXP0611_SB.html
http://graphics.thomsonreuters.com/F/09/EUROZONE_REPORT2.html
(Data from June 2011)
emsoly you're a star.
According to that graphic about $90 billion in total.
And how is this not a problem for the Spanish banks?
Damn, over 400 billion exposure to Italy by the French. They're gonna taste just like chicken.
Wish I could give you more than just a +1. Those are two great fucking charts.
All brought to you by Reuters... Courtesy of "your friends" the Rothschilds...
Sorry, France - I love you - but, HA! HA!
emsoly,
Excellent charts, thanks. Moved the rest of my post to below.
Yes Gojan
Look these table.
http://www.rankia.com/respuestas/1058710/fotos/59842
Thanks hugovanderbubble.
Spain has (relatively) very large exposure to Portugal (and not to Greece). This was the worry from the start and was the reason the EZ made a deal for Portugal. Spain has been off the radar compared to Italy lately. If Portugal continues like this, is actually 'abandoned' like Greece, then Spain has big new bank problems. (I'll go look up the exposure number now.)
Portugal owes spain approx. 65.9 billion euros....which is about the amount they owe the UK, Germany, and France combined. The portugese downgrade begins a big ramp up in the problems of Spain. Spanish banks jumped in with both feet, it was "their" market.
One place to see the picture: http://www.bbc.co.uk/news/business-15748696
The data is from BIS, summarized on 18 Nov 2011
Foda se!
From Bank of International Settlement (BIS) data:
Portugal: Spain's Worry
GDP $0.2 Trillion
Its debtors owe Spanish banks a total $88.5 Billion, equivalent to 39% of Potugese GDP.
Dated 20 October 2011
How do you say, "bye bye bitchez" in Portugese? Or maybe German is the better language here...
Auf wiedersehen Schlämpe
Auf Wiedersehen, Schlampen.
I think you included the Swedish. Whatever.
Hej då tikar!
Até logo putas! Tá foda!...
I thought France yields came down? I see Europe in the green. I can't reconcile this. Thankfully I live in America and all this crazines will never reach my shores.....right?
Re-posting this here...
OT:
F'k'n Bloomberg CHEER LEADING:
As opposed to ACTUAL JOURNALISM(RanSquawk):
Or maybe it's just me...
For a minute there I thought someone finally got a clear shot of the loch-Ness monster....
Nope. Thats the elephant in the room.
If Germany did not get downgraded, would all the nine that were downgraded have similar charts? Or is Portugal just the closest lemming to the cliff? Hopefully more of this will lead to more downgrades that will lead to more of this and the world can get on with this process.
Portugal has a debt to GDP similar to Ireland and has minimally addressed the austerity needs. They did decriminalize drugs so if I were Portugees I would pull out a blunt, sit back, and enjoy the show. My next government issued paycheck may be delayed.
Portugal was so small and the EZ was so big, so Portugal didn't matter. But things have changed. The original EU assessments of Portugal were done before Italy became the key focus, and before ECB EZ resources started to shrink before our eyes. Spain was looking better compared to Italy IF you just ignored portugal and the spanish autonomous region debt. Imagine sitting as a German voter in, say, Munich, and watching the potential leg-irons growing. Ireland comes back. Greece is drowning. Italy talks but doesn't grow. Now Spain's just seen it's fears realized in Portugal. Must be tough to be an EZ-loving German this month. Hope they do not fall into paralysis, but rather play out the Merkel game with art and backbone.
Wonder if in about a month the Italian chart looks the same as this one?
First they came for the Greeks.............................
pods
"Given the subordination concerns as ESM is accelerated, it is perhaps no surprise that the ECB's SMP has seemingly decided that Portugal has crossed the Rubicon into Greece territory."
Gee, I thought Julius Caesar crossed the Rubicon in Italy! How did Greece and Portugal wind up there?
Oops, looking at GDP / deficits / debt, they ARE neighbors! My bad.
In few months: has the ECB given up on Italy?
See what happens when the giant printing press machnine quits its semi-secretive EU QE? Where's Binky Ben at? It looks like a giant shit storm is going park itself over Portugal very soon indeed.
The Portugal trader at the ECB is ill, gonna be back tomorrow.
mby cause Portugal is small potatoes amongst their euro bitchez?
Worse yet, what if the ECB were actively taking up Portugal debt and they couldn't stop that pop over night, effectively killing any and all remaining ECB credibility! (if credibility is what you call what everyone thinks of the ECB)
ECB hit the rocks like the costa draghi.
Still waiting for the great paper reset. Boring world indeed.
The ECB is the dutch boy, European countries are the leaking dike. Sooner or later he runs out of fingers.
Print more fingers!
There's still toes and other body parts... (total: 22) :>D
French auction results weren't disappointing really - yields were down compared to Jan 9th. They've more important auctions coming up on Thurs though which will be a better decider of how things stand. ECB weren't in for Portuguese bonds today though it seems - only Italian and Spanish. Portugal hasn't exactly been storming ahead with the austerity measures - perhaps a little "encouragment" by the ECB today.
The PIIGS go marching one by one, hurrah, hurrah!
Nah. They just want to get rid of the current Portuguese government leaders. That's all.
Which Goldman name would it be then?
I love the sight of inverse cliffs in the morning
Dax up 1%. PIIGGS fly.
Storm in a teacup. Just like with Italy, ECB lets Portugal hang for a while and then takes action. No crisis.
We are talking about Portugal - thats just a few billions. Look at this charts and compare http://xkcd.com/980/
From the Portuguese constitution of 1976:
"The Constituent Assembly affirms the Portuguese people’s decision to defend national
independence, guarantee fundamental citizens’ rights, establish the basic principles of
democracy, ensure the primacy of a democratic state based on the rule of law and open
up a path towards a socialist society, with respect for the will of the Portuguese people
and with a view to the construction of a country that is freer, more just and more
fraternal."
Now you know why the Portuguese Republic is on it's death bed, the money has run out and now we are all fucked.
Our constitution is a piece of garbage with massive amounts of positive rights.
Out of the 5 big parties only one is liberal and truly right-wing, the rest are all marxsist cesspools...
The Public sector has grown massively since the 74 revolution and it's suffocating the economy.
Demographic problems will mean that soon enough our social security will face very deep challenges.
TL;DR: Socialism leads to decline and will eventually destroy all nations that choose it's short-term comfort instead of real hard work.
Nonsense. You know very well that we had to deal with a right-wing dictatorship for 48 years, ending in 1974. What would you expect to see written in 1976?
I understand why the left got so strong but that doesn't mean it was the right thing for Portugal. A liberal constitution that respected freedom and property rights would have allowed us to flourish but instead we got a socialist state that has done nothing but create a large wellfare dependant population and grow a enormous debt that we won't be able to service. Not to mention that we gave up our escudo which can be equated with a loss of sovereignity.
Before 74 atleast we had the overseas, economical growth, massive reserves of gold for the size of our population and a very small debt/GDP
The constitution was reviewed 3 times, right?
"Before 74 atleast we had the overseas, economical growth, massive reserves of gold for the size of our population and a very small debt/GDP"
Ah yes, we plundered and lived at the expense of other people's resources and work overseas. How is that different from having "a large welfare dependant population" ?
The fuck? How much dumber can you get? WE BUILT Portuguese Africa! Before colonization there was no civilization there to make use of the resources. If anything the african natives have to THANK US for bringing civilization to them!
The work we've done overseas was not parasitic and to compare it to living on welfare is one of the most moronic thing I've seen written in here.
You should go learn some history, colonization WAS NOT EVIL.
Really? For whom?
Matrix R Us - foda se!
"The fuck? How much dumber can you get? WE BUILT Portuguese Africa! Before colonization there was no civilization there to make use of the resources. If anything the african natives have to THANK US for bringing civilization to them!"
Wow. European condescension at its very best, exhibited by Matrix. So tell me Matrix - do you throw bananas at African football players as well? They should thank you for giving them food eh?
Why did you build Portuguese Africa? Why did the Belgians go to the Congo? The British to India? Same f*cking reason - to exploit the resources for your own good.
"You should go learn some history, colonization WAS NOT EVIL."
Why don't you learn some history first? Here's some history of colonization for you:
http://en.wikipedia.org/wiki/Congo_Free_State
"Failure to meet the rubber collection quotas was punishable by death. Meanwhile, the Force Publique were required to provide a hand of their victims as proof when they had shot and killed someone, as it was believed that they would otherwise use the munitions (imported from Europe at considerable cost) for hunting food. As a consequence, the rubber quotas were in part paid off in chopped-off hands. Sometimes the hands were collected by the soldiers of the Force Publique, sometimes by the villages themselves. There were even small wars where villages attacked neighbouring villages to gather hands, since their rubber quotas were too unrealistic to fill.
One junior white officer described a raid to punish a village that had protested. The white officer in command 'ordered us to cut off the heads of the men and hang them on the village palisades ... and to hang the women and the children on the palisade in the form of a cross.'[10] After seeing a Congolese person killed for the first time, a Danish missionary wrote: 'The soldier said "Don't take this to heart so much. They kill us if we don't bring the rubber. The Commissioner has promised us if we have plenty of hands he will shorten our service."'[11] In Forbath's words:
In theory, each right hand proved a killing. In practice, soldiers sometimes "cheated" by simply cutting off the hand and leaving the victim to live or die. More than a few survivors later said that they had lived through a massacre by acting dead, not moving even when their hands were severed, and waiting till the soldiers left before seeking help. In some instances a soldier could shorten his service term by bringing more hands than the other soldiers, which led to widespread mutilations and dismemberment."
Oh, and when you're finished, ask your European neighbours the Irish what they thought of colonization, specifically the Great Famine. They can teach you some history as well.
And I thought it was only the French...
Did I deny that a lot of evil was done too? No. Did I deny that we went there thinking about our own self-interest? No.
Did we left Africa better than when we found it? ABSOLUTELY YES!
In Angola thousands of whites where massacred including little babies and women. The worst kind of cruelties a human can do where done. All races can be equally evil.
I guess everyone would be happier had we not brought civilization to Africa...
No one said one race was less evil than another. Just don't give us the BS about Portugal doing it out of the goodness of their hearts.
I'll say this once again - the Chinese are there to do exactly what Portugal did. But hey at least they aren't lying about what they want to do. You're delusional.
All the "good deeds" Portugal did was to more efficiently exploit the resources of those countries. So just cut the moralising BS.
The ONLY point you can TRY to make is that we were less inhumane than others. Otherwise as proven by other poster, you're just full of shit.
Even if you love Socialism, Portugal joined Greece in the Too Socialist To Survive Club.
http://confoundedinterest.wordpress.com/2012/01/16/france-sells-sovereig...
Tudo legao.....
From the beginning, the debt crisis has been about the gold. Gold is money. Gold is independence. Paper is debt and slavery.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
"Gold is money. Gold is independence. Paper is debt and slavery."
#4 - Spam is annoying.
This chart shows the dominoes pretty well (hat tip to emsoly and his post of this interactive chart above).
(http://graphics.thomsonreuters.com/11/06/EZ_BNKEXP0611_SB.html)
France has some 630 billion Euro exposure to PIIGS,
In Italy alone ~410 billion Euro.
Portugal is only 25 billion Euro exposure, so you can see why ECB is desperate to buy Italian bonds instead.
Look at this chart of "2012 Maturing Sovereign Debt (Cumulative)", scroll down just a little, second chart:
http://www.hussman.net/rsi/fiveglobalrisks2012.htm
330 billion Euro for Italy by next December.
Italy is bad, but France is the linchpin.
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