Portuguese Budget Talks Break Down, As Country Follows Greece To The Brink (The PIIGS are back!)

Business Insider ^ | 10/28/2010 | Gregory White

[SeekAndFind]

Just hours after Greece erupted into bond-widening chaos yet again, Portugal has joined the fray.

Negotiations on the country's budget have collapsed when the opposition party, needed because the governing Socialists do not have an outright majority, backed out, according to Reuters.

The disagreement: how to cut spending.

The spread between the German bund and 10-year Portuguese sovereign debt has widened to 332, up 20 bps on the day.

CDS on the country's sovereign debt has spiked up 20 bps to 355 bps

[SanFranDan]

Just because the Germans and the Brits are cutting spending, with quantitative easing (QE2), Both Turbo Tax Timmy and Helicopter Ben should see this debt as a buying opportunity!

[C19fan]

All you need to know about Purtugal is the 2 main parties are the Socialists and Social Democrats; tweedel dumb and tweedle dee.

[Savage Beast]

How long before Germany withdraws from the EU and abondons these irresponsible people to their fate?

[SeekAndFind]

Germany can’t hold the rest of the PIIGS on its shoulders. Their citizens are already restive and Angela Merkel will see hereself taken down if she even so much as suggests another bailout for the other PIIGS.

Including these PIIGS in the Euro was a very bad idea in hindsight.

[GonzoGOP]

Including these PIIGS in the Euro was a very bad idea in hindsight.

Fixed it. Seriously there was no way that any of the countries in Europe were ever going to maintain fiscal discipline. And when you grouped them together the last country to go crazy with their spending was the one who had to clean up after the party. So the incentive was to go nuts and go fast.

[April Lexington]

In the end, money can't just be invented through the sale of bonds. At some point savers run out of money and the only buyers left are the government printing presses. We are approaching that point with QE2. The investment banking world tried to solve the age old conundrum of economic scarcity by selling debt as a replacement for or supplement to tax revenues. It can't work because, at some point, the world gobbles up all of the savings to support the public spending and then, are left with only two choices... cut government spending and deal with the riots or print new money to buy the bonds and hope nobody will notice...

[mewzilla]

Meanwhile...

Stop spending so much, furious Cameron tells EU as it demands 6 per cent budget increase