Portugal Government Collapses, Egypt Stock Market Failure, and Ezra Klein Endorses Crony Capitalism

It's official, Portugal's Parliament rejected Prime Minister's Jose Socrates deficit-cutting measure and, as promised, Socrates has turned in his resignation.  Bloomberg reports:

Portuguese Prime Minister Jose Socrates said he presented his resignation to President Anibal Cavaco Silva after parliament rejected the government’s deficit- cutting plan, raising the chance of an international bailout.
Socrates made the announcement tonight in an address to the nation after meeting with Cavaco Silva at the president’s residence in Lisbon. “This crisis occurs in the worst possible moment for Portugal,” Socrates said.

Check out Portugal's 10-Year now:

The big bad wolf of fiscal sustainability is blowing at the PIIG'S door.  Ireland's 10-Year just broke 10%, a new record high:

The PIIGS aren't the only ones suffering in Europe right now, the U.K.'s Consumer Price Index came in at a 4.4% annualized rate for February.  The Bank of England's target was 2%.  Will Bernanke, who is shooting for 2%-3%, fair any better at hitting this goal?  Fat chance judging by General Mills' latest profit:

Minneapolis-based General Mills did warn input costs will go up in its fiscal 2012 that starts in June, keeping a lid on gross profit-margin growth. Commodity costs are expected to go up 4% to 5% this fiscal year.

Enough with the fiscal calamity in the Eurozone, how's the MENA (Middle East North Africa) region doing?  Wasn't Egypty's stock market supposed to reopen today in a glorious demonstration of a return to financial stability?  Zerohedge reports:

Egypt’s finance minister was on hand as men dumped confetti on the trading floor to mark the resumption of trading. But within seconds of the opening, trading was once again halted as an intense sell-off drove shares below pre-set limits put in place to slow any sharp declines. The market reopened half an hour later. The benchmark EGX 30 index was trading down 9 percent at 5,137 points by early afternoon, recovering slightly from a drop of nearly 10 percent earlier. Finance Minister Samir Radwan called on investors not to panic."

Don't panic?

At least our wonderful President is being praised for his heroic military intervention (remember, we are establishing a no-fly zone by bombing Gaddafi's compound, this isn't a military invasion...) efforts in Libya.  From the Daily Caller:

Texas Republican Rep. Ron Paul will be co-sponsoring an amendment announced Tuesday by Ohio Democratic Rep. Dennis Kucinich that would defund the American military intervention in Libya.

Kucinich suggested during a Saturday conference call with anti-war Democrats that he thought impeachment could also be considered for Obama’s “unconstitutional” actions in Libya.

Paul’s spokeswoman Rachel Mills confirmed to The Daily Caller via email that Paul shares Kucinich’s point of view on the severity of the constitutional breach. “Yes, he thinks it is an impeachable offense,” Mills wrote.

Paul/Kucinich 2012?  A man can dream can't he?  Speaking of a Paul running for president, Sen. Rand Paul has addressed the issue:

While in South Carolina promoting his book "The Tea Party Goes to Washington" on Monday, Rand Paul was asked about a possible presidential run.
The U.S. Senator from Kentucky played it close to the vest.
"The only decision I've made is I won't run against my dad," Paul told the Post and Courier newspaper.

Though Kucinich is awful on economics (except auditing the Fed), him and the Paul father-and-son team are a few of the only remaining congressmen that actually believe in what they say.

I will end with some great passages on crony capitalism. First is from Ezra Klein writing on the benefits of Obamacare in the Washington Post today:

These transactions will happen on the new “exchanges” — a place that will, in effect, be a Web site where people can compare plans and choose the one that will serve them best. But behind the pleasing exterior (you can see it at HealthCare.gov), the exchanges offer another layer of consumer protection: Just as Amazon.com would stop carrying a toaster that routinely exploded when customers plugged it in, if an insurer repeatedly misbehaves, regulators can kick it out of the exchange.

So whenever a health insurance company, after being licensed and authorized to sell insurance by the government, doesn't abide precisely by overseeing bureaucrat's wishes, they are basically cut off from the market?  Well of course people can't be trusted to buy insurance from a company not deemed politically appropriate.  What consumer protection advocates continue to misunderstand is that consumers are empowered the most when they are given CHOICES, not when they have a few government approved suppliers to choose from. I wonder how much in campaign donations, and kickbacks, it will cost to keep start up competitors out of these exchanges.  In other words, which health insurance company will be the next GE?

And now Steve Malanga from his RealClearMarkets column on tax subsidized college sports:

The endowments that athletic departments build up through these contributions provide the linchpin for even more fiscal maneuvering in the form of what the CBO calls higher education's "indirect" tax arbitrage. Here's how it works. Our universities and colleges are eligible to use tax-exempt debt to finance many of their capital projects, including building sports facilities. As the CBO noted in a 2010 study about arbitrage on campus, universities engaged in these construction projects often have big endowments but still prefer to use tax-free debt to finance building. The advantage is obvious: Muni bonds carry a lower interest rate than comparable taxable bonds, so our institutions of higher learning gather donations, invest them in taxable securities that produce a higher rate of return than the interest the schools must pay out on their muni borrowing, and then they bank the difference. While it's illegal to use to proceeds from low-cost muni debt to invest directly in higher yielding taxable securities, building a university field house becomes an opportunity to skim off a few extra dollars in so-called indirect arbitrage, courtesy of the taxpayer.

I supposed I should watch Villanova and Pitt more considering I pay for them.

Update- Silver ended at $37.28 today.  If you check on Ebay today, buying single troy ounces is getting tougher as auctions are spread more apart than they were a few months ago.  Reason? Demand to hold silver is obviously increasing.  Get it while you can.

I am watching John Stephenson on Bloomberg TV right now, he is predicting silver will reach $50 this year and gold will reach $1700.  Copper is up 3% today as well.