Did Athens. Done Dublin. Next: Do Lisbon.
That’s the way the ‘markets’ or should we say, bond market vigilantes/vultures/vikings (take your pick) see their ongoing rampage.
They are getting banks bailed out left, right and centre.
Portugal’s public debt is 86% of GDP. Its private debt is almost three times that at an eye-popping 239% of GDP. Incredibly, they didn’t have a property boom…. so what kind of debt were the banks doling out?
In Greece, the French and German banks were ‘bailed out’. It’s private debt that is the problem…..
Private debt will kill the economy… It’s only the public sector that is keeping the system away from a slide into depression.
The private sector (not corner shops, we mean giant banks and pension funds) are on credit strike. That is why central banks are printing like hell (QE1, 2, with 3 and 4 coming) to make up the shortfall.
Banks have lent irresponsibly (think of sub-prime mortgages) and are continuously getting bailed out.
Sky News prefers to attach a country’s name to it… Irish/Greek / soon Portugal bailouts….. that’s not really the picture. Yes, it’s about those governments’ inability to sell IOUs (bonds) to private bankers/funds/traders but the underlying problem is the private sector…