Portugal Trading in Default Territory as Europe Plunges into Financial Chaos

This looks bad for Europe – which is temporarily good for America. Portugal’s troubles comes on the heels of news that Fitch expects Greece to default on it’s debts though in an “orderly” manner which will hit our banks hard. We also got some financial sabre rattling from German where an influential parliament member claimed that America was waging a war against the Euro through the ratings agencies.

Money from Europe is flooding into our markets, but this bounce will not last once Europe starts to collapse and our banks start shutting down. From the Financial Times:

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Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion, hurting a government debt auction on Wednesday. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt.

Portuguese 10-year bond yields, which have an inverse relationship with prices, jumped to a new euro-era high of 14.40 per cent in London on Wednesday. Before the S&P two-notch downgrade late on Friday, yields were trading at 12.45 per cent.

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Portugal on Wednesday sold €1.25bn of 11-month bills, €754m of six-month notes and €496m of three-month notes, lower than the €2bn to €2.5bn targeted by the government debt agency.

Portugal does not have a bond maturing until June, when €10bn is due for repayment. Its borrowing needs are also modest at €17.5bn. However, investors worry about Portugal’s painfully slow growth, which could impact on its ability to service its debts.

Many investors were forced to sell Portuguese bonds after Standard & Poor’s downgraded the country to junk on Friday. Other funds sold Portuguese debt after Lisbon was removed from Citigroup’s European Bond Index, which these investors track, because of its fall to junk status.

All three main credit rating agencies, S&P, Moody’s, and Fitch, rate Portugal as junk, below investment grade.

Meaning they’ll need a bailout and what a surprise the IMF is looking for another $600 Billion dollars.

Germany Halts H&K Exports to Mexico

Canadian Business reported that the German government is stopping gun makers Heckler and Koch from exporting arms to Mexico:

BERLIN (AP) – Germany’s government has banned weapons manufacturer Heckler & Koch GmbH from any new arms deliveries to Mexico amid concerns they are ending in parts of the country where Berlin has forbidden weapons exports over human rights issues, according to a letter obtained Thursday by The Associated Press.

The letter from the Economy Ministry to the arms manufacturer, dated Jan. 4, says the company’s applications for exports of “weapons and other defense goods” to Mexico are suspended pending the outcome of judicial investigations in Germany.

Heckler & Koch is under investigation by prosecutors for allegedly providing its G36 assault rifle to Mexican police in the states of Chiapas, Chihuahua, Guerrero and Jalisco, where Germany prohibits such exports over alleged human rights violations.

The company, whose headquarters near Stuttgart were searched by prosecutors late last month, denies any wrongdoing.

Rights groups like Amnesty International have accused Mexican government troops and police of abuses in the ongoing fight against drug traffickers. Germany’s tight weapons export regulations allows arms deliveries to Mexico, outside of the four states where the human rights situation is in question.

H&K however says that Germany is mistaken:

Heckler & Koch maintains it did not deliver weapons to those four states, but only to the country’s Mexico City-based central weapons purchasing authority, which is overseen by the Defense Ministry.

“Heckler & Koch has at no point in time delivered to any Mexican states,” the company said in a statement late December.

The Firearms Blog explains this difference of opinion this way:

It sounds to me that the German government suspects that H&K knew where their weapons were headed and were knowingly selling them to a straw buyer. I believe it is the Mexican Army who runs the Mexico City gun distribution center. It seems crazy that they are allowed to export to Mexico, to a central distributor, but that only certain state police can receive them, and others cannot.

I’d add that it sounds to me like the Left party, who initiated the investigation, wants to keep Mexican forces outgunned by the FARC aligned cartels. FARC is a Chevez vassal and the Left party, who just called for the introduction of Soviet style communism in Germany, is supportive of the Chavez goal of toppling pro-Western Latin American government and spreading his communist movement northward. So extreme is the Left Party that the Christian Social Democrats have called for them to be outlawed.

Three Adults Who Filmed Gang Rape of Teen Girl Sentenced to Youth Offender Facility

Someone should tell England this is not the way it works. Youth detention centers are for kids who commit crime, not adults who violate children:

Three men who raped a 16-year-old girl as the attack was photographed on a mobile phone have been sent to a young offenders institute.

Bolton Crown Court heard the victim went to an address in Rochdale after receiving a phone call in May 2008.

She drank whisky and was then raped by the men as she became incapacitated.

Ajmal Afridi, 19, of Boundary Street, Imtiaz Syed, 20, of Ellesmere Street, and Tayyab Hussain, 19, of Henry Street, all Rochdale, admitted rape.

Afridi was sentenced to six years in a young offenders institute. He raped the girl twice and sexually assaulted her.

Syed received the same sentence after he admitted one count of rape and one of incident assault.

Hussain, who has learning difficulties, was ordered to spend three years in a young offenders institute after he pleaded guilty to one count of rape.

I guess if anyone out there wants to rape a teenager England is the place to go. Apparently you won’t be sent to big boy jail until you’re 26 or so.

Irish School Children Told to Bring Their Own Toilet Paper as Irish Teachers’ Union Lives High on the Hog

America isn’t the only place teachers’ unions have basically destroyed the public school system. In credit crunch hit Ireland students are being told to bring their own toilet paper to school like Ireland is some third world nation:

Pupils at a St John’s girls’ national school, in Carrigaline, in the southern county of Cork, were asked to bring their own supplies in one of the starkest examples yet of the death of Ireland’s “Celtic Tiger” economy.

Catherine O’Neill, the school’s principal, said, in a letter to parents: “From time to time we will request your daughter to bring in a toilet roll to her class teacher. These rolls will be specifically for your daughter’s class and will be dispensed by the class teacher.

She said the measure had been taken in order to save money in the face of education funding cuts.

“We are endeavouring to trim down expenses and ensure we use our grants towards [educational needs],” she wrote.

Irish parents are already struggling to buy schoolbooks and uniforms in the face of a deep recession.

Those “educational grants” go mainly to overpaid teachers whose starting pay (calculated into dollars) is $47,855 and goes up every year, being capped at $93,012 a year for a 25-year veteran. But that’s just basic rates. The Teachers’ Union of Ireland has negotiated pay scales for paraprofessionals that would make anyone who has ever taught a community college or adult education class green with envy. A “Youthreach” coordinator begins at around $56275.69 and an “Adult Education Officer” starts at $77,155! Here’s a handy pay scale guide that shows all the perks teachers get.

What you won’t find on the site of Ireland’s “progressive, professional teachers’ union, representing teachers and lecturers in Vocational Schools, Community Colleges, Community & Comprehensive Schools, Institutes of Technology, Further Education and other specialist areas,” is an acknowledgment that the economy would make it hard for the community to support their lavish pay deals. Now we have a school were  parents are being told to send in toilet paper which the whole class will be using while the teacher who will be “dispensing” the paper is likely one of the wealthiest people those pupils know.

The teachers are really the Marie Antoinette of the modern world aren’t they?

h/t Drudge