Portugal Is Next: Improverished PIIG Demands US Assistance, Debt "Haircut" To Come Next

Tyler Durden's picture

It has been just over 48 hours since our call that PIIGS the world over will scramble to demand the same concessions that were just granted to Greece courtesy of its economy being in the toilet and getting worse (thanks to lies to misrepresent the Greek economy as being worse than it really was). We already got Ireland yesterday. Now it is Portugal's turn. Reuters reports that "Portugal asked Mexico on Saturday to tell fellow G20 members next week that the United States should offer "financial help" to resolve the euro zone sovereign debt crisis, describing it as a "systemic and global" problem, a Portuguese government source said." Of course, the "US" is a clear proxy for "everyone else" - that the US, whose politicians can't agree on a fiscal stimulus for the US, let alone for some country by the straits of Gibraltar they have never heard of, will not move an inch to save Portugal is a given. Which means that once Portugal is, as it anticipates perfectly well, shut down by the US it will commence demanding for help from those who at least can grant it - the EMU and the Eurozone. And when those refuse, Portugal will do the glaringly obvious: take a page right out of the Greek textbook and proceed to suicide its own economy. And why not - it worked miracles for Greece. Now: two down and two to go. The only question is when does Italy do precisely the same logical next step, and tell the world that its $2+ trillion in debt, the second most in the Eurozone after only Germany, is unsustainable, and will need a modest haircut. 20% should do it. We wonder, what will that do to French banks (and their "perfectly hedged" US proxies - such as MF Global and others)?

The story from Reuters:

"The crisis isn't in the euro zone. It is a systemic and global crisis and we hope that other big G20 countries intervene," the source told reporters in the capital Asuncion, speaking on condition of anonymity.


The source added that Washington should help resolve the crisis "by boosting trade and also with financial help."


No one from Calderon's delegation in Asuncion could immediately be reached for comment.


Financial markets rallied strongly this week after European leaders hammered out a deal to recapitalize their banks, boost the firepower of a euro zone rescue fund, and impose hefty losses on holders of Greek debt.

Portugal's deepending financial plight was described in great detail late last week by Ambrose Evans-Pritchard of the Telegraph:

Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events.

Data released by the European Central Bank show that real M1 deposits in Portugal have fallen at an annualised rate of 21pc over the past six months, buckling violently in September.


"Portugal appears to have entered a Grecian vortex and monetary trends have deteriorated sharply in Spain, with a decline of 8.4pc," said Simon Ward, from Henderson Global Investors. Mr Ward said the ECB must cut interest rates "immediately" and launch a full-scale blitz of quantitative easing of up to 10pc of eurozone GDP.


The M1 data - cash and current accounts - is watched by experts as a leading indicator for the economy six months to a year ahead. It has been an accurate warning signal for each stage of the crisis since 2007.


A mix of fiscal austerity and monetary tightening by the ECB earlier this year appear to have tipped the Iberian region into a downward slide. "The trends are less awful in Ireland and Italy, suggesting that both are rescuable if the ECB acts aggressively," said Mr Ward.


A shrinking money supply is dangerous for countries with a high debt stock. Portugal’s public and private debt will reach 360pc of GDP by next year, far higher than in Greece.

And where monetary shrinkage arrives, economic deterioration is always next. But just to make sure of that, Portugal has just set the first of many dates for a General Strike. Mark November 24th on your calendars. This is when Greece officially becomes Portugal.

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Carlyle Groupie's picture

Scrambled PIIGS bitchez!

gojam's picture

Rush to play dead, They're no longer PIIGS, they're Possums!

ratso's picture

Actually, they are money eating Zombies that can't be killed.

trav7777's picture

Portugal translation:  USA PLEASE ICANHAZ PRINT?

The Big Ching-aso's picture

Lipstick on PIIGS is making the markets go hog wild.

philipat's picture

Let the PIIGS take RESPONSIBILITY for their own actions and let the French Banks fail. Problem solved. Now, can we move on?

kaiserhoff's picture

That's only fair.  I always thought Portugal was the 51st state.  Oh wait, that was Porto Rico and the food stamp thang.

max2205's picture

Been tracking MF for 4 years. This came out of the blue....

malikai's picture

I wonder what the chances are for a double top secret bailout from Benocide and co.

Carlyle Groupie's picture

I wish these Occupy folks would steps things up a few notches. It would be nice to see some violence. Molotov cocktail projectiles directed at those who anger them. Maybe a few unprovoked attacks of the innocent pedestrian 'observers' who come to gawk at the protesters. Something. I want action.

malikai's picture

You want action? Take it. They are not there to entertain you.

Carlyle Groupie's picture

Oh I do. Do not assume I am actionless. Check this video. I do this every day.


Dave Thomas's picture

Nice, death by 1,000,000 tiny purple nurples.

I always wanted to run into a big bank building and have everyone flush all the toilets at once. Synchronized watches and everything, where eagles dare style.


Bruin4's picture

Really? everyday...I am not sure I can take that video seriously but I suppose if everyone in this country did it for just one month it might work...until they caught on and had the postal police at your door with some trumped up charges of mail fraud or something like that, but come to think of it when I was younger I used to mail everything., and I mean everything...bricks included.

malikai's picture

I saw that earlier. I think that's awesome. I'd like to suggest adding midget porn in the letters if available.

stopcpdotcom's picture

Short back and sides or crew cut?

knukles's picture

Oh and there'll be no charge.  It's default free all week here at Eu's Clip Joint

slewie the pi-rat's picture

hey, k-nuk!

i think this was "anon-y-mouse" b/c this kinda speech might get one hauled off at this point for the euro-crime of "eroding confidence"


Black Forest's picture

suggesting that both are rescuable if the ECB acts aggressively

I like the word "rescuable". What's its opposite? Unrescuable? Irrescuable? Arescuable? Disrescuable? Non-rescuable?

I am going to apply as a PR manager with ECB, and and want to provide some examples of virtual press releases in my letter of application.

gojam's picture

Opposite of rescuable is 'Doomed'

taxi952's picture

free cooking games

I think that irascible describes this situation the best

Sudden Debt's picture

Did anybody else notice a negative tone in this article or is it just me?

Black Forest's picture

It's just you. Everything is fine.

Popo's picture

Did anyone else notice a bizarre inability to communicate?

For example:

Portugal asked Mexico on Saturday to tell fellow G20 members next week that the United States should offer "financial help" to resolve the euro zone sovereign debt crisis.

So...wait.  Portugal asked Mexico to tell the G20 for them?  Is the beurocracy really that fucked up?

disabledvet's picture

"feelers." they "didn't want anyone to find out." shhh. don't worry Portugal..."your secret is safe with us."

prophet's picture

Italy is the only PIIGS that is a G-20 member. 

knukles's picture

Negative?  There's nothing fucking negative in the EU. Why would anybody start negative rumors about the EU? 

Problem Is's picture

Anytime a City of London TBTF mouthpiece whore like Ambrose Evans-Pritchard is moving his lips...

He is probably talking his master's book...

City of London Banksters must be positioned to payoff on EU turmoil...

knukles's picture

Portugal asked Mexico to tell the US that Spain and Italy were picking on her saying that they were dumber than Greece and Andorra combined even though nobody's said shit about Andorra for weeks when in fact she'd been in France for the G-willickers meetings all the time and not told Germany, said Britain.
(walks off in a huff)
America starts yelling behind her back that if she wants something to talk to her directly and stop this caddy two faced nattering.
(Portugal breaks down in tears)

Mentaliusanything's picture

I swear this is the plot from the "Barber of Seville"

Don't know it ....




Problem Is's picture

Because There is NO Plan B

Wanker Timmay will be dispatched by Wall Street Teleprompter-Puppet-in-Chief Obama Bin Lyin' to tell the EU their answer is Big Time QE, "Leverage that shit up bitchez," and save the banksters at all costs..

Timmay-'n-TOTUS Plan A...

kaiserhoff's picture

Is a 100 percent loss on bonds a "credit event"?  Is there any way of knowing?  Cue Twilight zone music.

Snakeeyes's picture

Europe is melting down and wants to drag the US down with them. We can't, of course, but Geithner will likely try.


Atomizer's picture

While everyone is looking at Portugal, the illusionist are crafting plans to fund collective motives in negative arrears (EU bailout)

Taken from a liberal media outlet..

Obama Sends 100 US Troops to Uganda to Help Combat Lord’s Resistance Army - October 14, 2011



Statement by the IMF Mission at the Conclusion of a Visit to Uganda - October 28, 2011


New membership tranches have been successfully secured. Begin Code 4 protocol-- media transmission to immediately commence by cornering new revenue stream fees. Negative press and graphic images to illustrate humanitarian violations per United Nations photo gallery.


jeff montanye's picture

who least deserved the nobel peace prize: kissinger, begin or obama?  you decide.  willing to entertain alternatives.