Fears about one of Portugal’s biggest banks, Espirito Santo, led to a sharp sell off across European financial markets on Thursday. What a ridiculous trigger for a sell-off! Espirito Santo, or the Holy Ghost represents a trivial sum in the world financial markets, not even the largest bank in Portugal, which has about as many people as New York City. The speculations of the family which controls the bank via a bunch of Luxembourg entities are serious on the scale of Portugal of course, by not a big amount for the rest of humanity, probably a mere euros 3 bn in total. It is really terrible for the Espirito Santo family, the heirs of a 19^th century lottery operator who diversified into investment banking, brokerage, and commercial banking at the end of the century. Portugal had been short financial operators virtually since the country expelled its Jews early in the 16^th century. The Espirito Santos flourished not because they were wonderful financiers, but because they were the solo ones.

The Banco Espirito Santo in Portugal as of May 5 of this year had euros 2.1 bn in statutory paid-up capital, certified by its auditors prior to a capital increase sold mostly to the Portuguese but also to other Euroland yield seekers. It announced on Friday that its total exposure to its rotten parent, Espirito Santo International and probably other Luxembourg entities came to all of euros 1.18 bn or about $1.8 bn, chump change for anyone ready to bail the group out. This was peculation on a personal level, and not even very well hidden.

Portugal earlier in this century needlessly bailed out Banco Atlantico, a very minor player which got into a real estate mess, and the Bank of Portugal is the first at bat. It was the BoP which certified the capital of BES prior to the May euros 1 bn capital increase via a rights issue, so this time it does not have to be a volunteer. The CB will be followed by a French bank, Credit Agricole, which owns a minority stake in BES and may want to hit a double.

Then it is the turn of the European Central Bank. While bailing out countries is a nein-nein for Germany, saving private sector bank clients unless they are Russians in Cyprus must be part of a plan for the single currency regulator. This time Germany will be more magnanimous if only because lots of Germans have bank accounts in Portugal because they own vacation homes there.

The BES panic yesterday spread throughout the Club Med countries of southern Europe—Greece, Italy, Spain and of course Portugal itself—and also to another country viewed as high risk, Ireland. But then cross-border links the market remembered also hit Austria. Then Poland, where Iberian banks are active, also fell into the hole. And even big sound banks started to tremble. And Uralkali, the miner of phosphates in a restructuring crumbled.

The word of God from another Holy Spirit hit Britain. The Archbishop of Canterbury was embarrassed when it was discovered that his strictures against payday loan operators hitting the poor were being violated by the investments of his own church in Wonga, a payday loan shop. Now the fund that had operated the CofE trust invested in the evil moneylender has sold the stake, but only of course from the church's account, not the others.

However thanks to a Canadian central banker recalling Alan Greenspan by making remarks difficult to understand, in this case Mark Carney who heads the Bank of England but is a Canadian, the UK did not see its quantitative easing cease or its interest rates rise from a half percent today. This despite hints from Carney earlier that the days of easy money were soon to come to an end. Of course there may have been just a hint of the Holy Spirit in keeping British monetary policy loose in a potential crisis.

More for news follows from India, Portugal, Africa, The Netherlands, Australia, and Canada.

*To start with the bad news, true to form I rode down Portugal Telecom some more. My total stake was now off about 25% at yesterday's close. This is par for the course in these plays. They don't ring a bell at the bottom. Today PT is up nearly 5% in Lisbon. Oi has not yet opened in Brazil. I do not think there is any real risk that the merger will not go through.

PT owns euros 897 mn of commercial paper issued by a BES entity called Rioforte which is at risk but offset by an alleged similar sum lent to it by some bit of BES.

*Infosys reported a 22% y-o-y rise in profit in its Q1, INR 28.8 bn or $480 mn, beating the consensus forecast by over 8%. Thanks to cost and price cutting and the recovery in the US and Euorpe, sales rose 7% to INR 127.7 bn and the Bangalore company predicted that it would see about 8% more sales overall in its FY 2014-5, which runs to next Mar. 31. The stock rose 3.2% in Bombay trading—India's stock market is still in Bombay despite the city having been renamed Mumbai.

Cost cuts have a price and at INFY there has been hefty staff turnover, which is a potential negative. To boost staff retention, INFY has reshuffled management and by the end of this month will have a new chief exec, Vishal Sikka, hired from SAP AG. Mr Sikka will probably being his reign by taking all the crud out of INFY accounts so I expect Q2 results will be hit by reserves and offsets. This may give us another buy opportunity.

*Nasdaq has ruled that Liberty Media Corp C shares will count pari passu with its A shares in figuring its position in the Q OMX index. This may set a precedent for the Dutch listed C shares of our Liberty Global Media but currently they are treated as subordinate to the A shares and we have been selling them off as they are issued in John Malone's acquisition binge.lmc

*Bank of Nova Scotia is setting up an automatic share repurchase plan for stockholders. Details will follow. Often these plans only work in Canada, and do not cover US shareholders.

*What with Euroland looking pale, Eastern Europe wan, and the Middle and Far East and bursting into war, the world needs a serious place to speculate in, and the answer is Africa. Our Africa Opportunity Fund, AROFF rose 6.5% yesterday. It fell back only 0.23% so far today.

Fund news from the Aberdeen group. Both Aberdeen Asia Pacific Income Fund and Aberdeen Global Income Fund kept their dividends flat. FAX will pay 0.035 cents per share to holders of record on the 21^st and FCO will pay 0.07 cents. FAX is our play on the A$ which is now a certified haven currency!