The ratings agencies, whose track record is entirely abysmal, now think that Portugal will need a second bailout…
The elephants in the room remain Italy and Spain. Nobody at the European Commission or the ECB wants to talk about them, but it’s pretty clear they’ll need help within the next 12 months.
All of this contagion is due to the failure of European politicians to gain control over their banks, many of which look like going bust.
There needs to be a far more serious effort at stress testing these banks, both in Europe and the US. The European periphery needs to get serious about leaving the euro, since austerity will not provide what’s needed: competitive markets and economic growth.
Gorilla says: “The proof of the pudding is in the bleating!”