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[Mpl90]

So, after a period of relative calm, Italy yields are up to 7.05%, breaching the 7% barrier again, France yields move up to a record Euro-era spread from Bunds at 190bp and Spain enters the spotlight. The latter may yet be saved by a new government plan of fiscal consolidation and some kind of jobs plan to get unemployment down from Euro-era records of 23%.

To explain why Italian yields are rising despite Bungasconi standing down - he was never really the problem. In fact if anyone was going to deliver fiscal consolidation it was him, that however, is a minority view. Italy has deep structural issues and a too high debt to GDP ratio which will hinder all future growth. To get back on the path to sanity, Italy must default, leave the Euro and reboot its economy. Sticking with 120% debt to GDP so French (and some German and British) banks don't go bankrupt and having an EU technocrat running the country into the ground to make sure those banks stay afloat is going to cause serious social problems in the future.

I don't think default is the solution.
Now market is reacting to the uncertainty of Monti's executive.
There are some politicians who aren't fan of the technic goverment, some others change their mind everyday, and we have something like 21 parties, when we had only 5 in 2008.
With one even born yesterday.
I think markets will again accelerate politic procedures, and we'll have the executive as soon as possible.
I have faith in Monti, and in his rumoured executive: finally, good people in right places, and not Maria Star and her tunnels of fantasy. But how can he operate without an official executive yet?!? XD

 

[zomgbbqftw]

Economically? It's too soon to say, but the a free trading area and a single market is still going to be required whatever happens so we may just revert back to the EEA.

Politically, well there are two schools of thought, the first (Britain, Germany and most of northern Europe is in this camp) is that it isn't and the EU will come crashing down sooner or later and anything they do is just kicking the can down the road. The idea of taking one country's money and giving it to another for "development" has never really been popular, and with this latest crisis, I think Germany have basically told the French just where they can stick their equality in decision making so the whatever the outcome the course of the EU has changed dramatically. The second way (pro EU and the French mostly sign up to this) is that the EU will use the crisis to form a full political and economic union within the EU and basically install technocrats in countries that don't play ball. They have done this successfully in Greece and Italy, but the latter looks like unwinding much faster and again, subversion of democracy in this way doesn't really seem viable medium to long term and these technocrats won't have the political capital to achieve their stated goals so will eventually be deposed.

 

[Frankfurter]

Just btw. the French spread compared to German Bunds atleast partly look so bad because Germany can currently borrow at a historically low interest rate. ~1.75% per year for 10 year Bunds, i.e. real returns of about zero for investors (expecting an inflation rate of about 1.5-2% during that period).
France's ~3.5% are perfectly in line (and actually relatively low!) compared to the last years.

 

[zomgbbqftw]

I don't think default is the solution.
Now market is reacting to the uncertainty of Monti's executive.
There are some politicians who aren't fan of the technic goverment, some others change their mind everyday, and we have something like 21 parties, when we had only 5 in 2008.
With one even born yesterday.
I think markets will again accelerate politic procedures, and we'll have the executive as soon as possible.
I have faith in Monti, and in his rumoured executive: finally, good people in right places, and not Maria Star and her tunnels of fantasy. But how can he operate without an official executive yet?!? XD

The problem for Monti is that he has not been elected by the people or the parties. Whatever we all say about Berlusconi he did at least have some kind of democratic legitimacy.

Italy are stuck between a rock and a hard place. On the one side they can go in for this technocrat and it solves the immediate problem of access to money markets, but it will brew a very dangerous long term problem because of a massive subversion of democracy. I can't imagine how the people of this country would react if the EU decided to depose David Cameron and installed Peter Mandleson as leader to be sufficiently pro-EU. So that is a very dangerous and unpredictable situation.

On the other side, no Italian party is willing to face up to real fiscal consolidation measures except Berlusconi's and in an election we would likely see Berlusconi win. Even though there are a minority of people who think he can deliver plans for fiscal sustainability, most don't and the markets will punish Italy with high yields forcing a bail out and a possible technocratic government.

The eventual solution is that Italy will leave the default, leave the Euro and debase and inflate their way back to some kind of sustainable economy.

 

[[Nintex]]

Italy is the 8th largest economy of the world. The idea of them defaulting is crazy and would take the entire system down with them. That's just not the EU, if the EU folds the US will be next and Asia will have nowhere to sell their shit so they'll be in the dumps too.

But like other politicians and economists pointed out in the past... Italy is a large, industrial and well functioning economy. It's not even comparable to Greece.

 

[zomgbbqftw]

Just btw. the French spread compared to German Bunds atleast partly look so bad because Germany can currently borrow at a historically low interest rate. ~1.75% per year for 10 year Bunds, i.e. real returns of about zero for investors (expecting an inflation rate of about 1.5-2% during that period).
France's ~3.5% are perfectly in line (and actually relatively low!) compared to the last years.

The rest of northern Europe has followed a similar path to Germany, Britain can borrow at 2.15%, Sweden 2.1%, Denmark 1.7%, Austria 2.3%, Netherlands 2.3%. France were in this group and their yield spread was within 50-70bp from Germany, but now they are not. On days like these when investors are bailing out of equity markets and risky bonds safe countries normally see yields go down. This is evident today, UK, German and US yields are down on the day by around 5-10bp. French yields otoh are following Italy and Spain and are up by around 20bp on the day. So, yes, French yields are still about the same as they were a year ago, and that's not bad in historical terms, the problem is that they are no longer following the northern European trends set by Germany and the UK. If France was in that group they should be borrowing at around 2.5%, similar to the UK.

 

[zomgbbqftw]

Italy is the 8th largest economy of the world. The idea of them defaulting is crazy and would take the entire system down with them. That's just not the EU, if the EU folds the US will be next and Asia will have nowhere to sell their shit so they'll be in the dumps too.

But like other politicians and economists pointed out in the past... Italy is a large, industrial and well functioning economy. It's not even comparable to Greece.

It wouldn't be a full default. Most likely a partial default and restructure like Argentina. The fundamentals of Italy are there, but with such high debt levels literally crushing future growth that debt will keep on increasing and brining it down in GDP terms is going to be improbable and paying it back in absolute terms impossible.

Let's say for a minute that Italy defaulted on about 40% of its debt and brought its debt to GDP ratio from 120% to about 75%, investors would lose about €800bn overnight. Who are these investors? French banks, the French government, the ECB, German banks, the German government, the ECB (again) a few US based pension funds but they are bailing out as we speak, UK funds and banks have been bailing out for months already. Japanese banks/funds have already bailed out on instruction of their government. The biggest losers in an Italian default would be the Eurozone. It would still be a European problem. Remember that Italian banks and institutions hold around 50% of total Italian government debt which is pretty high (not Japan high though).

It wouldn't be as bad as people think for the world economy. It would dent the German economy slightly and France would fall into a deep recession. Italy would come out the other side much stronger and money markets wouldn't lend to the government freely, which would force fiscal competence into their institutions and public sector.

 

[Lain]

To explain why Italian yields are rising despite Bungasconi standing down - he was never really the problem. In fact if anyone was going to deliver fiscal consolidation it was him

That's a baffling way of thinking imo, for multiple reasons, but especially considering Italy is where it's at because Berlusconi was in charge until the other day and he had done nothing to fix problems until the other day, always denying them.
How would he have been able to deliver a fiscal consolidation? It's simply madness to believe he would have been able to.

 

[Frankfurter]

The rest of northern Europe has followed a similar path to Germany, Britain can borrow at 2.15%, Sweden 2.1%, Denmark 1.7%, Austria 2.3%, Netherlands 2.3%. France were in this group and their yield spread was within 50-70bp from Germany, but now they are not. On days like these when investors are bailing out of equity markets and risky bonds safe countries normally see yields go down. This is evident today, UK, German and US yields are down on the day by around 5-10bp. French yields otoh are following Italy and Spain and are up by around 20bp on the day. So, yes, French yields are still about the same as they were a year ago, and that's not bad in historical terms, the problem is that they are no longer following the northern European trends set by Germany and the UK. If France was in that group they should be borrowing at around 2.5%, similar to the UK.

I'm not disagreeing with you, I'm just saying that France paying 3.5% for 10 year bonds isn't unsustainable or a sign that France is close to default etc.
The only good thing this whole mess has brought us is that financial markets actually take into consideration that a country might default and that there is risk associated with buying bonds.

Edit: I'm also a bit baffled that Berlusconi, out of all Italian politicians, should have been the man to put Italy back into a proper position - considering he has been the guy that is atleast partly responsible for the mess that Italy is currently in.

 

[zomgbbqftw]

That's a baffling way of thinking imo, for multiple reasons, but especially considering Italy is where it's at because Berlusconi was in charge until the other day and he had done nothing to fix problems until the other day, always denying them.
How would he have been able to deliver a fiscal consolidation? It's simply madness to believe he would have been able to.

He still had some kind of democratic mandate to do it. I'm not saying there is a big chance, but still bigger than a technocrat passing the required legislation and carrying votes in a house where he has no support or in a country in which he has not faced an election. There is no one else in Italy who could carry the votes for austerity. Other parties didn't even acknowledge the need! The technocrat may see the need, but it's still not clear whether he will be able to form a government let alone carry an austerity vote through a hostile Parliament and then face down protests and riots and massive claims of illegitimacy.

 

[Kabouter]

I'm not sure I share your sentiments that an Italian restructuring would have a limited impact zomg. The interdependence of the European economies is almost certain to cause a domino effect with disastrous consequences. After all, Italy is a significant part of the European economy, France even more so. If both those countries enter a deep recession, or even a depression, it will have serious consequences for the rest of Europe, and consequently, the rest of the world. An Italian restructuring therefore seems to me the worst of ideas right now.

 

[zomgbbqftw]

I'm not disagreeing with you, I'm just saying that France paying 3.5% for 10 year bonds isn't unsustainable or a sign that France is close to default etc.
The only good thing this whole mess has brought us is that financial markets actually take into consideration that a country might default and that there is risk associated with buying bonds.

Edit: I'm also a bit baffled that Berlusconi, out of all Italian politicians, should have been the man to put Italy back into a proper position - considering he has been the guy that is atleast partly responsible for the mess that Italy is currently in.

Of course the chance of a French default is minimal and 3.5% is not unsustainable, far from it! It's just a worrying trend that they have started to follow southern EU patterns and have broken away from the core northern EU group of Germany, UK, Scandinavia, Netherlands and Austria. Unless this crisis is solved in the next year or so (seems like a long time to us, but in EU terms a year would be very fast indeed) I can see French yields hitting 5%, UK hitting 3.5% and Germany hitting 2.5% as investors bailout of Europe in general and into the US and Japan.

The only thing I would say the UK has going for it is that any election will not be for another 3 and a half years and the current government is strongly on the path of fiscal consolidation and austerity. The UK deficit has come down from a post-war high of 13.3% of GDP to 8% this year and likely around 6% next year. By the end of the government session there should be a smallish 1-2% deficit. That's why UK yields are so low despite a higher deficit than France and massive banking liabilities from RBS.

 

[zomgbbqftw]

I'm not sure I share your sentiments that an Italian restructuring would have a limited impact zomg. The interdependence of the European economies is almost certain to cause a domino effect with disastrous consequences. After all, Italy is a significant part of the European economy, France even more so. If both those countries enter a deep recession, or even a depression, it will have serious consequences for the rest of Europe, and consequently, the rest of the world. An Italian restructuring therefore seems to me the worst of ideas right now.

It will have an impact, but I don't think it will be big enough to cause a domino effect. Half of the haircut will be taken by Italian funds and banks so no worry there. The other half will be taken by French banks, the ECB and a few German banks. Most international investors have bailed out already or are in the process of doing so leaving the ECB holding €400bn worth of toxic assets. The EU economy still has underlying strength, the UK and Germany especially so, and allowing Italy to default quickly will be like pulling off a plaster, doing it quickly and getting the pain over and done with is the best way. Prolonging Italy's suffering and EU suffering will cause a Japan style lost decade where every country will be afflicted with low growth and poor prospects. I would take a 5-10% correction in EU GDP and 10 years of 3-4% growth than 10 years of 1-2% growth but no recession.

Italy could even default and stay within the Eurozone, but that would still leave competitiveness issues and again, the outcome will be massive debts and an eventual default.

Honestly, an Italian default is going to happen whether we want it or not, the EU can't afford to bail out Italy (and the two countries that do don't have the stomach and it would be political suicide in Germany or the UK to propose handing over €1tn to feckless Italians) and the ECB can only have a temporary effect (QE or no QE), the upward trend will continue and all that will happen is EU governments are left holding €1.8tn of worthless Italian debt and their problems will have been socialised.

 

[darkwing]

Italy is the 8th largest economy of the world. The idea of them defaulting is crazy and would take the entire system down with them. That's just not the EU, if the EU folds the US will be next and Asia will have nowhere to sell their shit so they'll be in the dumps too.

But like other politicians and economists pointed out in the past... Italy is a large, industrial and well functioning economy. It's not even comparable to Greece.

then it's too big to fail, no need to worry, if EU can bail Greece, then they can bailout Italy considering Italy is more important

 

[fortified_concept]

Italy is the 8th largest economy of the world. The idea of them defaulting is crazy and would take the entire system down with them. That's just not the EU, if the EU folds the US will be next and Asia will have nowhere to sell their shit so they'll be in the dumps too.

But like other politicians and economists pointed out in the past... Italy is a large, industrial and well functioning economy. It's not even comparable to Greece.

Monti is a neoliberal and member of shady banker groups. Unless I'm mistaken and he's not the leader I'm expecting him to be (we'll see in a few days) the only change he'll bring to Italy will be more austerity measures, more poverty, more social unrest and more debt. He'll follow the IMF playbook which ruined even Argentina a country that was more wealthy and abundant in natural resources than Italy ever was.

Ladies and gentlemen watch and learn.

 

[Broder Salsa]

then it's too big to fail, no need to worry, if EU can bail Greece, then they can bailout Italy considering Italy is more important

That's not exactly how it works...

 

[fortified_concept]

then it's too big to fail, no need to worry, if EU can bail Greece, then they can bailout Italy considering Italy is more important

Unless they start printing money from the ECB something that the banks and therefore their puppets Merkel and Sarkozy would absolutely hate they cannot save Italy. No fucking way.

 

[Vagabundo]

I getting sick of this. Just die EU. Die...

Not a speck of light is showing
So the danger must be growing
Are the fires of Hell a-glowing
Is the grisly reaper mowing

Yes, the danger must be growing
For the rowers keep on rowing
And they're certainly not showing
Any signs that they are slowing

 

[Frankfurter]

Of course the chance of a French default is minimal and 3.5% is not unsustainable, far from it! It's just a worrying trend that they have started to follow southern EU patterns and have broken away from the core northern EU group of Germany, UK, Scandinavia, Netherlands and Austria. Unless this crisis is solved in the next year or so (seems like a long time to us, but in EU terms a year would be very fast indeed) I can see French yields hitting 5%, UK hitting 3.5% and Germany hitting 2.5% as investors bailout of Europe in general and into the US and Japan.

The only thing I would say the UK has going for it is that any election will not be for another 3 and a half years and the current government is strongly on the path of fiscal consolidation and austerity. The UK deficit has come down from a post-war high of 13.3% of GDP to 8% this year and likely around 6% next year. By the end of the government session there should be a smallish 1-2% deficit. That's why UK yields are so low despite a higher deficit than France and massive banking liabilities from RBS.

I really don't see the US and especially Japan (with its 200% debt to GDP ratio) being the better alternatives to the likes of the UK, Scandinavia or Germany.

 

[Meadows]

I really don't see the US and especially Japan (with its 200% debt to GDP ratio) being the better alternatives to the likes of the UK, Scandinavia or Germany.

America's job figures have been getting better and America is seen as a safe haven. Japan's debt is owned nationally so even though it's "high debt" it's "safe debt" if you know what I mean. And apart from some demographic issues (and obviously the quake) the fundamentals of Japan are strong.

Scandanavia isn't really big enough in terms of monetary trade to be a save haven, and remember, Finland is in the Eurozone. The UK is doing okay, and is something of a safe haven (at least in Europe) but that's because of our ridiculously tough austerity measures. Germany isn't a safe haven because of it's reliance on export to other Eurozone countries, but in general the fundamentals of Germany are strong enough to cope with the crisis, and they've shown that they can recover from similar things (post WW2 and the absorption of Eastern Germany)

 

[Sickboy007]

Democracy isn't being subverted in Italy in any way, this is not new here and it's going to last max one year till the renewal of parliament in 2013.
Italy doesn't use the Westminster system.

 

[empty vessel]

The latter may yet be saved by a new government plan of fiscal consolidation and some kind of jobs plan to get unemployment down from Euro-era records of 23%.

Lol, fiscal consolidation does not solve anything. That's just a political objective of a certain class, not a solution to a financial crisis.

 

[Funky Papa]

I'm going to laugh my arse off* if foreign debt crushes France yet Spain remains miraculously afloat.

*

Spoiler

but not really

 

[Meadows]

I'm going to laugh my arse off* if foreign debt crushes France yet Spain remains miraculously afloat.

*

Spoiler

but not really

people are unwilling to flee the Spanish market because of Real Madrid, FC Barcalona and Tapas. In business speak, your fundamentals are strong.

 

[Frankfurter]

America's job figures have been getting better and America is seen as a safe haven. Japan's debt is owned nationally so even though it's "high debt" it's "safe debt" if you know what I mean. And apart from some demographic issues (and obviously the quake) the fundamentals of Japan are strong.

Scandanavia isn't really big enough in terms of monetary trade to be a save haven, and remember, Finland is in the Eurozone. The UK is doing okay, and is something of a safe haven (at least in Europe) but that's because of our ridiculously tough austerity measures. Germany isn't a safe haven because of it's reliance on export to other Eurozone countries, but in general the fundamentals of Germany are strong enough to cope with the crisis, and they've shown that they can recover from similar things (post WW2 and the absorption of Eastern Germany)

Americas job figures have been getting better? Are you serious? As far as I know the unemployment rate is pretty much stable at about 9.5%, while the share of the population that is working has fallen to a 20 (or 30?) year low (i.e.: hidden unemployment) and the debt to GDP ratio continues to rise due to huge deficits.
Talking about high debt and safe debt: I seem to remember someone posting that Italy's is also to quite an extent owned nationally.

Just btw. 7 out of the 8 top export partners of the UK are members of the Eurozone. Imo that's in no way better than the situation Germany is facing. In fact I'd claim that Germany's exports are more diverted and less dependent on one country failing (with the exception being France).
I'd also claim that it doesn't make sense to see dependance on eurozone economies as sth. that is necessarily sth. negative. Germany, the Netherlands, Austria, Finland, (France, Ireland) Belgium, Luxembourg won't suddenly default, even if the eurozone collapses.

 

[Woz]

Monti is a neoliberal and member of shady banker groups. Unless I'm mistaken and he's not the leader I'm expecting him to be (we'll see in a few days) the only change he'll bring to Italy will be more austerity measures, more poverty, more social unrest and more debt. He'll follow the IMF playbook which ruined even Argentina a country that was more wealthy and abundant in natural resources than Italy ever was.

Ladies and gentlemen watch and learn.

Yesterday Monti said the exact opposite...

 

[Mael]

Democracy isn't being subverted in Italy in any way, this is not new here and it's going to last max one year till the renewal of parliament in 2013.
Italy doesn't use the Westminster system.

Seriously what stupid notion is that? I mean did people claim that democracy was getting taken over or something after the attacks in Madrid actually pushed a government out of the door?

 

[fortified_concept]

Yesterday Monti said the exact opposite...

What did he say? Honest question, I'm really interested.

 

[Enosh]

Yesterday Monti said the exact opposite...

well he probably won't say "I am here to bring to Italy more austerity measures, more poverty, more social unrest and more debt." to anyone out loud ^_^

 

[fortified_concept]

Seriously what stupid notion is that? I mean did people claim that democracy was getting taken over or something after the attacks in Madrid actually pushed a government out of the door?

Yeah, it's not as if different parties with supposedly different ideologies under the pretense of emergency and under pressure from the european union instead of lobbying for their own ideologies they unite and put as head of the government bankers and neoliberals elected by the markets -not the people. Yeah, why would anybody think this is a subversion of democracy...

Btw the situation is copy-pasted from Greece. As I have been saying Greece is the experiment, the prototype if you will, they want to use all over Europe. The civil unrest in Greece might change some of their plans but I don't expect much.

 

[Meadows]

Just btw. 7 out of the 8 top export partners of the UK are members of the Eurozone. Imo that's in no way better than the situation Germany is facing. In fact I'd claim that Germany's exports are more diverted and less dependent on one country failing (with the exception being France).
I'd also claim that it doesn't make sense to see dependance on eurozone economies as sth. that is necessarily sth. negative. Germany, the Netherlands, Austria, Finland, (France, Ireland) Belgium, Luxembourg won't suddenly default, even if the eurozone collapses.

Yeah, but our economy isn't really based on exporting, not nearly to the extent that it is in Germany.

 

[Mael]

Yeah, it's not as if different parties with supposedly different ideologies under the pretense of emergency and under pressure from the european union instead of lobbying for their own ideologies they unite and put as head of the government bankers and neoliberals elected by the markets -not the people. Yeah, why would anybody think this is a subversion of democracy...

Btw the situation is copy-pasted from Greece. As I have been saying Greece is the experiment, the prototype if you will, they want to use all over Europe. The civil unrest in Greece might change some of their plans but I don't expect much.

Holy shit are you for real?
Do you even know who was in place before Monti?
I mean next year if in France we get François fucking Holland from the socialist party who then announce that he doesn't have a choice to put in place a policy to decrease spending you'll accuse him of taking over the country undemocratically and say that it's all a plot to get neoliberals as heads of government too?

Was the election taking place in Spain in the aftermath of a terrorist attack not a subversion of democracy too? As the people wouldn't have voted the way they did if not for the attacks.

 

[fortified_concept]

Holy shit are you for real?
Do you even know who was in place before Monti?
I mean next year if in France we get François fucking Holland from the socialist party who then announce that he doesn't have a choice to put in place a policy to decrease spending you'll accuse him of taking over the country undemocratically and say that it's all a plot to get neoliberals as heads of government too?

I don't care who was before Monti, the fact that Berlusconi is a piece of shit doesn't excuse shady undemocratic process. They could have declared elections like they always do instead of doing this shit under the pretense of emergency. It's an evolution of the Shock Doctrine where now the markets are even choosing who will be the leader without the need to supposedly democratic elections.

 

[Woz]

well he probably won't say "I am here to bring to Italy more austerity measures, more poverty, more social unrest and more debt." to anyone out loud ^_^

Obviously no, but he said that Italy need more social unity, more equity, more hope for the younger generations, etc... Just like fortified said.

 

[Woz]

What did he say? Honest question, I'm really interested.

I'll try to find a link in english.

 

[Mael]

I don't care who was before Monti, the fact that Berlusconi is a piece of shit doesn't excuse shady undemocratic process. They could have declared elections like they always do instead of doing this shit under the pretense of emergency. It's an evolution of the Shock Doctrine where now the markets are even choosing who will be the leader without the need to supposedly democratic elections.

You make NO SENSE.
You point to the fact that the market want ultra liberal leader on government.
=> they topple Italy's government who had the biggest fucking neoliberal this side of Europe.
That makes no sense AT ALL and it's making your position like a conspiracy theory where the only thing missing is freemasons and jews.
Italy's current political condition is not some kind of plot to push whatever agenda of whatever the hell you think it is.
It's pretty much head of government lost confidence and is ousted, it's not a rare occurence AT ALL and is no way a sign that Italy is falling into a fascist state or whatever (especially after getting rid of ducking Berlusconi).
If anything Berlusconi's successor will look like a moderate compared to il Cavaliere.

 

[Sickboy007]

I don't care who was before Monti, the fact that Berlusconi is a piece of shit doesn't excuse shady undemocratic process. They could have declared elections like they always do instead of doing this shit under the pretense of emergency. It's an evolution of the Shock Doctrine where now the markets are even choosing who will be the leader without the need to supposedly democratic elections.

Just because you don't like it it doesn't mean it's undemocratic. This process has closely followed the constitution and it's not true that they always declared elections, in fact the creation of a transitional government is an usual fixture in Italy, see: Ciampi, Dini, Amato just in the last 20 years. We elect parlamentarians with an autonomous mandate, not governments or ideologies.

edit: lol usual fissure

 

[fortified_concept]

You make NO SENSE.
You point to the fact that the market want ultra liberal leader on government.
=> they topple Italy's government who had the biggest fucking neoliberal this side of Europe.
That makes no sense AT ALL and it's making your position like a conspiracy theory where the only thing missing is freemasons and jews.
Italy's current political condition is not some kind of plot to push whatever agenda of whatever the hell you think it is.
It's pretty much head of government lost confidence and is ousted, it's not a rare occurence AT ALL and is no way a sign that Italy is falling into a fascist state or whatever (especially after getting rid of ducking Berlusconi).
If anything Berlusconi's successor will look like a moderate compared to il Cavaliere.

Where did I point to the "fact" that markets want a liberal? Why would markets ever want a liberal?

Just because you don't like it it doesn't mean it's undemocratic. This process has closely followed the constitution and it's not true that they always declared elections, in fact the creation of a transitional government is an usual fissure in Italy, see: Ciampi, Dini, Amato just in the last 20 years. We elect parlamentarians with an autonomous mandate, not governments or ideologies.

What do you mean you elect parliamentarians with autonomous mandate? Don't they belong to certain parties? And when did Italy have before such a coalition of the unwilling where most parties elected a transitional PM to push forward so many drastic changes?

 

[Mael]

Where did I point to the "fact" that markets want a liberal? Why would markets ever want a liberal?

Yeah, it's not as if different parties with supposedly different ideologies under the pretense of emergency and under pressure from the european union instead of lobbying for their own ideologies they unite and put as head of the government bankers and neoliberals elected by the markets -not the people. Yeah, why would anybody think this is a subversion of democracy...

Btw the situation is copy-pasted from Greece. As I have been saying Greece is the experiment, the prototype if you will, they want to use all over Europe. The civil unrest in Greece might change some of their plans but I don't expect much.

And I never said that they wanted a liberal but a neoliberal which is not exactly the same thing.

And ultra liberal and neo liberal is synonymous here so that might have thrown you off.

 

[StuKen]

And I never said that they wanted a liberal but a neoliberal which is not exactly the same thing.

And ultra liberal and neo liberal is synonymous here so that might have thrown you off.

liberal != neoliberal

not even remotely related

 

[Frankfurter]

Yeah, but our economy isn't really based on exporting, not nearly to the extent that it is in Germany.

Well, your economy is much more dependent on banks, so I don't see how that should help you either

 

[jorma]

liberal != neoliberal

not even remotely related

If you are from europe and call someone "ultra liberal", a neo liberal is pretty much what you mean.

 

[fortified_concept]

nm I read jorma's post too, it must be regional then. Our communication is fucked up.

 

[Sickboy007]

What do you mean you elect parliamentarians with autonomous mandate? Don't they belong to certain parties? And when did Italy have before such a coalition of the unwilling where most parties elected a transitional PM to push forward so many drastic changes?

I mean that after they're elected, they can do whatever they please. You're completelely disregarding the reason the former government fell, which is that a vast number of the PDL members (Berlusconi's party) withdrew their confidence in the government and sided with the center party, which has advocated since a year or so a transitional government. This is also the position of the major center left party, and now of the majority of PDL deputies afraid of losing votes in the event of bankruptcy (polls show that the majority of italians are for a transitional gov) and desperate to buy some time to reorganize the party after berlusconi's demise. Calling it a coalition of the unwilling is very misleading.

And when did Italy have before such a coalition of the unwilling where most parties elected a transitional PM to push forward so many drastic changes?

http://en.wikipedia.org/wiki/Ciampi_Cabinet

 

[Evlar]

Looks like the Italian 10-year bonds are ending the day above 7% again.

 

[avaya]

The fact that we use the term contagion and we shift focus from one country to the next should be compelling proof enough that a lot of what we're seeing is irrational herd behaviour compounded by machine trading.

Italy wasn't more fucked now suddenly than it was 1, 2, 3, or 5years ago. It is totally irrational to declare the situation unsustainable, which is of course fuelling the hysterical plunge towards that very same situation.

Markets are fickle, inefficient and fuelled by irrational opinions. If you want to see how those in the shadow market have acted in groups to force down currencies look no further than the Asian currency crises of 1997. It ended when the Hong Kong Monetary Authority didn't take it standing still and crushed the shorts at margin call. A lot of the framed speculation on the Euro is in fact joint shadow market action, just as it was then.

 

[Meadows]

Well, your economy is much more dependent on banks, so I don't see how that should help you either

Thankfully banks without a lot of exposure to Greek/Italian debt. Our economy is mainly service based.

 

[Shiggy]

Merkel works for the banks, the only thing that's surprising about this story is that people are surprised by her behavior.

Merkel tries to keep inflation down instead of ruining the ECB.