Remember when we said yesteday that the FTSE MIB won't have a good day today? It isn't...
http://www.zerohedge.com/news/panic-italy-ftse-mib-down-62-biggest-drop-may-2010
Remember when we said yesteday that the FTSE MIB won't have a good day today? It isn't...
By ALESSANDRA RIZZO
ROME
The leader of Italy's largest union is threatening a general strike against an austerity package that Premier Silvio Berlusconi's government hastily pushed through to balance the budget by 2013 and avoid financial collapse.
The threat came amid mounting criticism Sunday of the euro45.5 billion ($64.8 billion) package passed Friday in response to demands by the European Central Bank.
Critics say the package -- a mix of spending cuts, job cuts and tax increases, including a "solidarity tax" for high-earners -- will strangle Italy's stagnant economy, which is now expected to grow by only about 1 percent this year.
Other critics, including nine members of Berlusconi's own coalition, say it unfairly targets the middle class and fails to tackle Italy's massive tax evasion problem.
continued -- BusinessWeek --
Both the Bank of Italy and the International Monetary Fund are expecting growth below 1 percent this year and even weaker growth next year.
Italian bond yields surged at an auction today and Greek Prime Minister George Papandreou failed to reassure investors that his country can avert default as the euro region’s debt crisis worsened. Italy sold 12-month bills today to yield 4.153 percent, up from 2.959 percent a month ago as demand fell. The yield on the country’s 10-year bond rose 7 basis points to 5.445 percent today. The yield on Greece’s two-year note surpassed 60 percent for the first time even after the government said it would raise property taxes to meet the 2011 deficit goal in its European Union-led rescue.
Papandreou is struggling to convince investors that Europe’s most-indebted country can avoid a default that threatens to roil the euro region. That’s undermining European leaders’ efforts to stop contagion from spreading to Spain and Italy as splits emerge in the German government about how best to handle Greece.
“We have got to the stage when markets have lost an enormous amount of faith with the euro project as a whole,” said Marc Ostwald, strategist at Monument Securities Ltd. in London.
Shares in some of the region’s banks fell to the lowest level seen since Lehman Brothers Holdings Inc. collapsed in 2008 and bond yields on Europe’s AAA-rated countries fell to record lows today. BNP Paribas SA, Societe Generale SA and Credit Agricole SA plunged more than 9 percent after two people with knowledge of the matter said Moody’s Investors Service may cut their ratings. The yield on Germany’s 10-year government bond fell to 1.706 percent.
... The cost of insuring European sovereign and bank debt rose to records today. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments soared 17 basis points to 353. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 9.5 basis points to 309, according to JPMorgan Chase & Co. “The markets just won’t put up with this for much longer, so either this will push Greek to default, and the euro zone hasn’t done much from stopping that, or they will go like vampires and attack the next one,” said Ostwald.
Daniel_Plainview wrote:Italian Yields Surge as Papandreou Struggles With Greece Default Concern
peripato wrote:Daniel_Plainview wrote:Italian Yields Surge as Papandreou Struggles With Greece Default Concern
Bloomberg
The end is drawing near for the whole Euro charade, but not just yet perhaps. I fully expect the suits to announce another "Hail Mary Pass" shortly.
Daniel_Plainview wrote:peripato wrote:Daniel_Plainview wrote:Italian Yields Surge as Papandreou Struggles With Greece Default Concern
Bloomberg
The end is drawing near for the whole Euro charade, but not just yet perhaps. I fully expect the suits to announce another "Hail Mary Pass" shortly.
At this point, any "stick save" will directly and adversely affect Germany (and France) ... and it's clear that the Germans are losing interest in more bailouts.
How much further will the can be kicked down the road? Perhaps a little bit further ... but the remedy will be a mere short-term lipstick gloss covering up the deepening, festering problems.
S&P Downgrades Italy; Euro, Futures Tumble
As usual, a corrupt and pathetic Moody's continues to boldly not go where everyone else has gone before. Luckily, S&P, which had the balls to cut the US, has just done so to Europe's next domino, by downgrading Italy from A+ to A, outlook negative. Then again, this was pretty much telegraphed 100% earlier today as noted in "Italy Expected To Cut Growth Forecasts Further." Anyway, those incompetents from Moody's are next.
http://www.zerohedge.com/news/sp-downgrades-italy-euro-futures-tumble
From: Dow Jones Newswires
September 20, 2011 8:57AM
STANDARD & Poor's Ratings Services downgraded Italy's sovereign credit ratings today and said the outlook for the country was negative.
The ratings agency said the Mediterranean nation's weak economic growth and "fragile" government coalition would make it harder to head off the growing crisis sweeping the euro zone.
The news represents a fresh setback for the zone's third-largest economy, which has wrestled with the effects of a widening European debt crisis and more than a decade of tepid domestic growth.
S&P now rates Italy at A, five steps above junk territory.
"The outlook is negative," said S&P, reflecting weakening economic growth prospects and government divisions that will likely limit the parliament's ability to respond decisively to those challenges.
... "We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve," S&P said.
"Furthermore, what we view as the Italian government's tentative policy response to recent market pressures suggests continuing future political uncertainty about the means of addressing Italy's economic challenges."
Moody's Investors Service on Friday maintained its negative review on Italy's sovereign debt rating, saying it would likely need another month to evaluate the country's credit-worthiness.
Moody's still rates Italy at Aa2, the third-highest sovereign-debt rating.
Linky Winky
http://www.bbc.co.uk/news/business-15176947
Italy credit rating slashed by Moody's from Aa2 to A2
The Italian government's credit rating has been slashed by Moody's from Aa2 to A2 with a negative outlook.
The ratings agency blamed a "material increase in long-term funding risks for the euro area", due to lost confidence in eurozone government debts.
Despite Rome's low current borrowing needs, and low private-sector debt levels in Italy, Moody's said market sentiment had turned against the euro.
Prime Minister Silvio Berlusconi said the decision was expected.
Fitch just downgraded the credit ratings of Italy and Spain — not unexpected, but the latest in a string of gouges being cut in the side of the market’s high hopes for Europe. Fitch cut Spain’s long-term credit rating to “AA-” from “AA+.” It cut Italy to “A+” from “AA-.” Fitch also said it was cutting its estimate of Spain’s medium-term growth.
October 13, 2011, 6:23 PM EDT
Oct. 14 (Bloomberg) -- Prime Minister Silvio Berlusconi faces a parliamentary confidence vote today to determine whether he still has enough support to continue governing Italy through Europe’s deepening debt crisis. “The government asks for a confirmation of confidence because it is profoundly aware of the risks facing the nation,” the premier said.
... Pressure is mounting on Berlusconi as investors continue to dump Italian debt even after the European Central Bank began buying it on Aug. 8 to stem surging borrowing costs. The yield on the nation’s 10-year bond rose for a fifth day to reach 5.86 percent yesterday, the highest since Aug. 5, when the premier unveiled 54 billion euros ($73 billion) in austerity measures that convinced the ECB to backstop Italy.
In our opinion, renewed market tensions in the eurozone's periphery, particularly in Italy, and dimming growth prospects have led to further deterioration in the operating environment for Italian banks. We also think the cost of funding for Italian banks will increase noticeably because of higher yields on Italian sovereign debt. Furthermore, we expect the higher funding costs for both banks and corporates to result in tighter credit conditions and weaker economic activity in the short-to-medium term.
We do not believe that this difficult operating climate is transitory or that it will be easily reversed. In our view, funding costs for Italian banks and corporates will remain noticeably higher than those in other eurozone countries unless the Italian government implements workable growth-enhancing measures and achieves a faster reduction in the public sector debt burden.
ItalyRules wrote:The Italian people will not stand for this, just like the Greeks.
With Greece part of the problem was not that the money was not there, but that the upper tier ensured the money that was their was not effectively taxed.dsula wrote:ItalyRules wrote:The Italian people will not stand for this, just like the Greeks.
So you're saying Italian people won't accept they can't spend money they don't have.
Italy's soaring borrowing costs threaten to hit its economy next year, making it crucial for political stability to be restored and budget cuts enacted, the EU's economic affairs chief said on Thursday.
The commission has sent auditors to Italy to help the country implement the measures while the IMF is deploying its own team to work in parallel.
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