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Moody's cuts Portugal to junk, warns on 2nd bailout
Reuters ^ | 7/5/11

Posted on 07/05/2011 2:22:15 PM PDT by markomalley

Moody's on Tuesday cut Portugal's credit standing to junk in the first such move by a ratings agency and warned the country may well need a second round of rescue funds before it can return to capital markets.

Moody's Investors Service slashed Portugal's credit rating by four levels to Ba2, making it follow Greece into junk territory below investment grade.

It cited heightened concerns that Portugal will not be able to fully achieve the deficit reduction and debt stabilization targets set out in its loan agreement with the European Union and International Monetary Fund.

There also is an increasing probability Portugal will not be able to borrow at sustainable rates in capital markets in the second half of 2013 and for some time thereafter, Moody's said.

Portugal is receiving funds from a three-year, 78-billion-euro ($112 billion) EU/IMF bailout program and does not need to issue long-term debt in the market until 2013.

Portugal faces formidable challenges in reducing spending, increasing tax compliance, achieving economic growth and supporting the banking system, the agency said.

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy; Foreign Affairs; Front Page News; Government
KEYWORDS: default; economy; europeanunion; iretalians; italy; moodys; piigs; portugal; rome
Wonder when Moody's is going to "cut the US to junk"?
1 posted on 07/05/2011 2:22:18 PM PDT by markomalley
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To: markomalley

I’d be guessing weeks...not months. And the market will take a huge crash dive on that day (500 points down, my humble guess).


2 posted on 07/05/2011 2:38:49 PM PDT by pepsionice
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To: markomalley

I wonder who’s next. Spain? Italy?


3 posted on 07/05/2011 2:51:25 PM PDT by Shadow44
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To: markomalley

“There also is an increasing probability Portugal will not be able to borrow at sustainable rates”

I’m wondering how the hell anyone continuously borrows at a ‘sustainable rate’? WTF kind of nonsense is that?


4 posted on 07/05/2011 3:00:23 PM PDT by MeganC (NO WAR FOR OIL! ........except when a Democrat's in charge.)
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To: pepsionice

One would think it already would have. It continues to puzzle me as to why it goes up. The economy is dead as a doornail.


5 posted on 07/05/2011 3:08:57 PM PDT by screaminsunshine (Socialism...Easier said than done.)
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To: Shadow44

Next up Illinois, then California


6 posted on 07/05/2011 3:15:49 PM PDT by bert (K.E. N.P. N.C. D.E. +12 ....( History is a process, not an event ))
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To: markomalley

If Moody’s rates every entity as “junk” does Moody’s continue to exist?


7 posted on 07/05/2011 3:17:26 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: Shadow44

“I wonder who’s next. Spain? Italy?”

Listen to this:

http://www.youtube.com/watch?v=2gm9q8uabTs


8 posted on 07/05/2011 3:38:22 PM PDT by Signalman
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks markomalley.
Portugal is receiving funds from a three-year, 78-billion-euro ($112 billion) EU/IMF bailout program and does not need to issue long-term debt in the market until 2013.

9 posted on 07/05/2011 3:43:26 PM PDT by SunkenCiv ("Your cash ain't nothin' but trash." -- Steve Miller Band)
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To: markomalley

Why, just this morning an article was posted, noting that 10 years after Portual had decriminalized drug use, there was no negative effect....

Anybody suppose there’s an undocumented reduction in motivation and productivity there?


10 posted on 07/05/2011 3:50:44 PM PDT by G Larry (I dream of a day when a man is judged by the content of his character)
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To: markomalley

Why, just this morning an article was posted, noting that 10 years after Portugal had decriminalized drug use, there was no negative effect....

Anybody suppose there’s an undocumented reduction in motivation and productivity there?


11 posted on 07/05/2011 3:51:16 PM PDT by G Larry (I dream of a day when a man is judged by the content of his character)
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To: markomalley

The PIIGS are all defaulting, but bond collapses and defaults are headed through the rest of Europe and this way, too.


12 posted on 07/05/2011 3:57:04 PM PDT by familyop ("The Romans and their Empire were but a bauble in comparison to the Jews." --President John Adams)
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To: Shadow44

If Spain or Italy follows, everything collapses. Each country has more than a trillion in government debt.


13 posted on 07/05/2011 4:07:07 PM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: markomalley

European implosion imminent.....followed by a global implosion.


14 posted on 07/05/2011 7:08:42 PM PDT by cranked
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To: familyop
The PIIGS are all defaulting....

Now, now....

PIIGS Not Kosher at Barclays Capital

15 posted on 07/05/2011 7:14:28 PM PDT by mewzilla
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To: G Larry

The low-productivity, high-grift societies of the countries along the Med aren’t news, they’re hardly undocumented and they were well noted by the German, northern EU, French and UK Euro-skeptics - again, and again, and again.

Each time, they were called “racists” and so on.

For example: Greece has been in default, or something similar, on average about every two to three years for the 100 years prior to admission to the Euro. Italy has been an economic basket case on regular intervals since the fall of the Roman empire. Spain enjoyed a brief period of economic success whilst they were plundering and looting wealth from South America... right up until the point when the wrangled with those pasty, pale English.

Portugal: Their economic history of the last 100 years is so convoluted, so tortured, that I can only recommend that you go investigate it for yourself. In so doing, you’ll see that the issue of declining output, declining investment, etc is NOT a new development for them. You’ll see that private capital has been treated very shabbily in Portugal for decades. Go look up “the Carnation Revolution” WRT Portugal’s recent economic history. Look at their economic output and investment before and after this “Carnation Revolution.”

The brutal, unflinching truth of the matter is this:

The Euro can’t work with two completely different economic cultures within it.

You can’t have industrious, thrifty, productive northern Europe on the one side, and spendthrift, left-wing grifter governments and cultures on the other side of the compact. It ain’t gonna work. And no set of economic straightjacket conditions is ever going to turn a Greek, Italian, Spaniard, or Portagee Catholic into a thrifty northern European Protestant. Ain’t gonna happen. Not now, not 10 years from now, not ever.


16 posted on 07/05/2011 7:36:03 PM PDT by NVDave
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To: NVDave

You’re correct!

...I was trying to make a simple point on my lunch break...

and it was more of a response to an earlier post.


17 posted on 07/05/2011 7:47:11 PM PDT by G Larry (I dream of a day when a man is judged by the content of his character)
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To: pepsionice

I honestly am looking forward to a total meltdown. And have prepared for it. Maybe then America will awaken. We need to get back to an economy based on a gold and silver standard and quit printing paper money that has no value.


18 posted on 07/05/2011 7:55:55 PM PDT by ColdSteelTalon (Light is fading to shadow, and casting its shroud over all we have known...)
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To: G Larry

there’s a correlation...also nations that legalize drugs have awful armies with gays serving openly


19 posted on 07/05/2011 8:21:15 PM PDT by dennisw (NZT - "works better if you're already smart")
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To: mewzilla
"PIIGS Not Kosher at Barclays Capital"

LOL! Thanks. I'll continue to use it, of course, until they're roasted. Then we and our overseas friends who've desired "empire" will be up for an acronym. ;-)


20 posted on 07/05/2011 9:18:03 PM PDT by familyop (Rome was burned in a day--twice.)
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To: ColdSteelTalon
We need to get back to an economy based on a gold and silver standard and quit printing paper money that has no value.

We need to have an economy based on innovation and investment without relying on outsourcing slave labor, illegal aliens, and the redistribution of wealth. That would be a far bigger influence on the strength of our currency.

Politicians always find a way to get around metal backing of the currency, anyway.

21 posted on 07/05/2011 9:34:14 PM PDT by Moonman62 (The US has become a government with a country, rather than a country with a government.)
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