Portuguese bonds downgraded to "junk"

The international credit rating agency, Moody's, has downgraded Portugal's credit rating to BA2 which gives their government bonds "junk" status.

Portugal is now on a par with the Phillipines, Macedonia and Egypt and has a lower credit rating than Barbados, Latvia and Estonia.  Even the Isle of Man has a better credit rating than Portugal and their main exports are students and Jeremy Clarkson (and he's not even Manx).

The euro house of cards is collapsing.  Greece has been bailed out and it's about to be bailed out again.  Greece's credit rating with Standard & Poor's is CCC - only 3 lower credit ratings exist, two of which are for bankrupts and defaulters.  Portugal is only 5 rungs up the ladder from Greece, hovering precariously above Albania and Mongolia.

Despite the spin and false optimism from the europhiles, be under no illusions that this is not a disaster for the eurozone.  Major eurozone economies are failing, their bonds downgraded to junk status and the cost of the loans they have to take out to pay for existing debt spiralling out of control.  The eurozone is bankrupt, its only assets are France, Germany and the Netherlands and even they can't afford to bail out half of Europe year after year.

The best thing the Greeks and Portuguese can do is ditch the euro, devalue their currency, slash interest rates and lower taxes.  In the case of Greece, they should default on their debt repayments - they literally can't afford to make the interest payments, the EU/IMF bailout is just a payday loan.