Portugal ≠ Greece; Portugal = U.S.

BCA Research recently put out a special report from its European Investment Service.  The title was Is Portugal the Next Shoe to Drop?  The service contends that it isn’t, namely because:

“Portugal is nothing like Greece.  It has an impressive deficit reduction record, is not in a debt trap and its deficit-reduction plan appears both reasonable and achievable.”

Thus Portugal ≠ Greece, but a table in the report made me think that Portugal = U.S.

Gross Debt as a % of GDP

Portugal = 83.8%

U.S. = 83.9%

Government Budget Deficit as a % of GDP

Portugal = -9.3%

U.S. = -11.2%

You can see a snapshot of key Portugal financials at this link.

Admittedly, there are lots of other differences between the U.S. and Portugal than these two measures.  The point, here, though, is that sovereign debt issues–and crises there–are likely to be a trouble spot for the next several years.  That amounts to another argument in support of our case that the next great–a secular, or long-term one–bull market in equities won’t arrive until much later in the decade.  Here is an updated look at the other arguments, made by far smarter folks.


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