Home » Posts tagged 'italy' (Page 8)

Tag Archives: italy

On two recent days, Eurointellence made stunningly bad comments about the escalating capital flight from Italy.

The latest Target2 Chart from the ECB is from May. Newer totals are available in some individual countries.

Debtors, primarily Italy and Spain, now owe Germany close to €1 trillion. Realistically, this money cannot and will not be paid back except by a central bank bailout.

Yet, Eurointelligence whitewashed this as no big deal.

July 9 – German Panic About Target2

The German debate on the balances of the Target2 payment clearing system continues to rage. There are two reasons for this. On the one hand, the Bundesbank’s Target2 credit with the Eurosystem was over €976bn at the end of June, and is within weeks of exceeding the symbolic figure of one trillion. On the other hand, Germans have taken notice of Paolo Savona’s plan B for Italy to exit the euro, which involved defaulting on Italy’s external debt including its Target2 balance which is under €481bn and growing. In this context Peter Boehringer, the AfD MP and chair of the Bundestag’s budget committee, has criticised Olaf Scholz in a budget debate for making no risk provisions for the possibility of default on Target2 claims. Frankfurter Allgemeine has also spoken to Christian Dürr, the deputy leader of the FDP group in the Bundestag, who says it’s about time the finance minister put on the political agenda the threat of a default on the German taxpayer. The position of the CDU group is that the situation will correct itself because of the coming end of the ECB’s asset purchase programme, and trust in the eurozone’s southern states returning as a result of the ongoing economic recovery.

…click on the above link to read the rest of the article…

Italian debt; a financial disaster waiting to happen

July 3, 2018

Italian debt; a financial disaster waiting to happen

The new Italian government will increase public spending and public debt. It promised to reduce taxes, introduce basic security and reform pensions. Italy’s Northern League’s leader Mateo Salvini surged in the polls and the party is now the strongest in Italy. A couple of years ago it was inconceivable that this regional group could become Italy’s leading political party. We should expect more to come. As the saying goes, it just could not happen till it happened. The financial establishments in North European countries like Germany and the Netherlands assume that the politicians of M5S and Lega Nord will follow the Greek script and will backtrack on their promises. But Mateo Salvini and Prime Minister Giuseppe Conte know that if they do not live up to the expectation of the voters, they will be voted out of office. They are also aware of it that the Italian voter has still another alternative called “CasaPound”, a much more radical, if for the time being insignificant, social and anti-migration movement.

The planned reforms could burden the state budget with an additional 125 billion euros per year. Can the Italian government afford such a thing?¹⁾

The question is rhetorical when you look at Italy’s growing debt mountain.

It amounts to €2300 billion, of which 1900 billion are government bonds. What should worry investors, however, is the structure of this debt. Ten years ago, when the last financial crisis broke out, 51% of these government bonds were hold by foreign investors. When the climate for investment in a country deteriorates, they sell these bonds immediately. When in 2011 the Berlusconi government threatened to withdraw from the eurozone budget rules because of the huge budget deficit, German and French banks sold Italian government bonds BTP (Buoni del Tesoro Poliennali) worth a total of €150 billion. In the following years, foreigners bought Italian debt instruments again for around €100 billion, but their share is now very low at 36%.

…click on the above link to read the rest of the article…

The Biggest Monetary Experiments in History: Part 1

June 25, 2018

The Biggest Monetary Experiments in History: Part 1

… and all at the same time.

Last week was a humdinger. Three things happened:

One

Firstly, our pasta-eating friends, after having experienced firsthand a blizzard of accelerating violent crime… and watching their previously gentrified neighbourhoods reconfigured into ghettos resembling the Maghreb, decided enough was enough and said “non piu”.

Italy turns away two more boats loaded with ‘human cargo’ https://sc.mp/2lbiUF7 via @SCMP_News

12:59 AM – Jun 19, 2018

Italy turns away two more boats loaded with ‘human cargo’

Minister says the country no longer wants to be any part of the business of ‘clandestine immigration’.

scmp.com

And who could blame them?

A clash of cultures. One that will one day be studied by scholars sipping their coffee, scratching their heads, frowning and scorning the insanity of it all.

The below video of migrants unhappy with the accommodations provided by the Italian state is nothing unusual. It is rather a daily occurrence, not only in Italy, but across various parts of Europe, Britain, and Scandinavia.

A strange way one would say to show gratitude to the Italians who rescued them from the ocean, fed them, clothed them, and provided them shelter.

That these daily events aren’t publicised by the MSM is a topic for another day, but increasingly it’s hard to hide this sort of thing from your own people. Italy, as we all know, is predominantly Catholic, certainly Christian. And so when Luigi strolls outside for an espresso at his local cafe and finds this in the streets:

… he wonders what the hell the politicians are thinking.

When future generations look back at the reasons why the European Union and one currency system collapsed, there will be many factors to consider.

…click on the above link to read the rest of the article…

Global Stocks Dive On Fears Of “Irreversible” Trade War; Italian Bonds, Turkish Lira Tumble

June 25, 2018

Global Stocks Dive On Fears Of “Irreversible” Trade War; Italian Bonds, Turkish Lira Tumble

Bulletin Headline Summary from RanSquawk:

Trump is said to be planning new restrictions on tech exports to China
PBoC says they are to cut the re-lending rate for SME loans by 50bps, following the RRR cut over the weekend
Looking ahead, highlights include, US New Home Sales and BoJ’s Sakurai speaking

Global stocks are diving in what has been a generally quiet session, amid renewed trade war fears following reports that the Treasury Department is planning to heighten scrutiny of Chinese investments in sensitive U.S. industries under an emergency law, putting Washington’s trade war with Beijing on what Bloomberg dubbed a “potentially irreversible course”, while at the same time Trump threatened “more than reciprocity” to trade barriers.

According to overnight news reports, the US Treasury is devising rules to block firms with 25% Chinese ownership from acquiring companies involved in industrially significant technologies and that it plans using International Emergency Economic Powers Act 1977 to impose investment restrictions. “This one could well result in an escalating trade war,” Lee Ferridge, a macro strategist at State Street Corp., told Bloomberg TV in Hong Kong. “Volatility is going to continue to rise from here.”

Adding to the trade war jitters, an EU internal memo says trade crisis “set to deepen in coming months” and warns of the breakdown of rules-based trading. The EU Commission has also warned of a direct response to any new taxes on EU cars imported into the US.

The result has been a sea of red with European equities following Asia lower from the open, with the mining and auto sectors underperforming, resulting in a sea of red across global stock markets.

…click on the above link to read the rest of the article…

Trump Takes Italy by Storm: the Rise of Matteo Salvini and of the Italian Right

June 21, 2018

Trump Takes Italy by Storm: the Rise of Matteo Salvini and of the Italian Right

Matteo Salvini, the leader of the Italian League and Minister of the Interior since June 2018. During the past few weeks, he has gained political prominence in Italy by adopting Trump’s style and policies. Here, you see him together with the slogan “Italians First.”

During the past few weeks, we have seen a true political revolution in Italy. Matteo Salvini, leader of the Italian League, has successfully exploited his new position of Minister of the Interior to gain personal prominence. The M5s movement had won the elections, this year, but it has been emarginated to a secondary role, while Salvini acts and looks like if he were the real Prime Minister. If new elections were held now in Italy, Salvini and the League would win hands down.

All politics is, after all, about blame shifting. So, political success means simply finding someone to blame. Matteo Salvini was successful by adopting the same style and content that made the political fortune of Donald Trump. Both Trump and Salvini found a good target to blame with immigrants and foreigners in general. Both used harsh language, insults, callousness, and plain racism. Both found that the more shrill and violent their utterances were, the more they were approved by the public. It took a remarkably small effort to convince a large majority of Italians that all their troubles are caused by immigrants and, in particular, by the Roma people (less than the 0.2% of the Italian population). Salvini also capitalized on demonizing the Euro and the European Union, although he can’t afford (so far) to exaggerate with insults and threats in that field. In any case, right now, it seems that 72% of Italians approve Salvini’s actions.

…click on the above link to read the rest of the article…

Italy and the Repricing of European Government Debt

June 21, 2018

ITALY AND THE REPRICING OF EUROPEAN GOVERNMENT DEBT

The yield spread between 10yr BTPs and Bunds widened 114bp in May
Populist and anti-EU politics were the catalyst for this repricing of risk
Spain, Portugal and Greece all saw yields increase as Bund yields declined
The ECB policy of OMT should help to avoid a repeat of 2011/2012

I have never been a great advocate of long-term investment in fixed income securities, not in a world of artificially low official inflation indices and fiat currencies. Given the de minimis real rate of return I regard them as trading assets. I will freely admit that this has led me to make a number of investment mistakes, although these have generally been sins of omission rather than actual investment losses. The Italian political situation and the sharp rise in Italian bond yields it precipitated, last week, is, therefore, some justification for an investor like myself, one who has not held any fixed income securities since 2010.

An excellent overview of the Italian political situation is contained in the latest essay from John Mauldin of Mauldin Economics – From the Front Line – The Italian Trigger:-

Italy had been without a government since its March 4 election, which yielded a hung parliament with no party or coalition holding a majority. The Five Star Movement and Lega Nord finally reached a deal, to most everyone’s surprise since those two parties, while both broadly populist, have some big differences. Nonetheless, they found enough common ground to propose a cabinet to President Sergio Mattarella.

Italian presidents are generally seen as rubberstamp figureheads. They really aren’t supposed to insert themselves into the process. Yet Mattarella unexpectedly rejected the coalition’s proposed finance minister, 81-year-old economist Paolo Savona, on the grounds Savona had previously opposed Italy’s eurozone membership. This enraged Five Star and Lega Nord, who then ended their plans to form a government and threatened to impeach Mattarella.

…click on the above link to read the rest of the article…

Italy challenges the Western order

June 21, 2018

Italy challenges the Western order

The EU is under a lot of strain

With a massive influx of immigrants from across Africa and the Middle East, and growing poverty, Italy voted in a populist government representing policies which would seem to virtually overturn the postwar European order.

The austerity measures which have been imposed upon the Italian people have pushed more and more of them down into poverty, with the poverty rate doubling over the course of the past decade.

Relative to migration, Italy is one of the Southern European countries taking the brunt of the migrants who are flooding into Europe by the thousands, helped along by various NGOs which seek to alter the demographic makeup and economic and political order of Europe under the guise of humanitarianism.

The present economic metrics tend to perceive the profits of multinational corporations as a gauge of the health of the economy, rather than the economic situation on the ground level, faced by the Italian citizen. All of these and more are things which this new government has a view towards radically changing.

To combat Austerity, which may be tossed out the window, the option on the table is to review treaties to which Italy is partied which impose or advise them. Rather than gutting the population for the money which the government needs in order to cover obligations to multinational financial interests, a proposal was broached of launching a universal basic income, reduction in the pension age, as well as a flat tax system.

And while the migrant policy is still evolving, it has had a view towards repatriating the migrants which are already within Italy’s borders. Italy has already flexed its will on the migrants issue over refusing a ship full of migrants port in Italy, forcing it to set sail for Spain.

…click on the above link to read the rest of the article…

Italian Politics: The Calm Before the Next Storm

June 11, 2018

ITALIAN POLITICS: THE CALM BEFORE THE NEXT STORM

Europe remains a potential source of angst for financial markets in the form of another existential crisis for the Eurozone. True, stock markets have relaxed over the past week in part because of relief that another Italian election has been avoided for now and in part because US dollar upward momentum has stalled (see following chart).US DOLLAR INDEX

Source: Bloomberg

CONFLICT IN ITALY — WHEN WILL IT COME TO A BOIL?

The coalition government’s economic policies will likely conflict with the fiscal rules set by Brussels.

On Italy this is likely just the calm before the next storm given the Five Star and League coalition government’s economic policies are almost inevitably going to be in conflict with the fiscal rules set by Brussels — though the confrontation may take longer to come to a boil because of the presence of technocrats in the new government, a compromise required by Italian president Sergio Mattarella for the government to be formed on June 1.

There will also doubtless be hopes on the part of the political establishment that the differences in ideologies between the left of centre Five Star and the right-wing League will become evident in the everyday practice of trying to run a government resulting in due course in both ‘populist’ parties being discredited in the eyes of the electorate.

ITALIAN 10-YEAR GOVERNMENT BOND YIELD AND SPREAD OVER 10Y GERMAN BUND YIELD

Source: Bloomberg

THE ECB AND THE EUROSYSTEM — ITALY’S GREATEST CREDITOR

The other point to consider with an Italian populist government now in place is how the ECB will react in terms of the signals sent given that the ECB and the Eurosystem is the single largest holder of Italian government debt.

…click on the above link to read the rest of the article…

Trump Says Russia Should Be Back In The G7; Italy Backs Trump

June 8, 2018

Trump Says Russia Should Be Back In The G7; Italy Backs Trump

Update: and just like that, G6+1 became G5+2

ITALY PREMIER CONTE BACKS TRUMP ON RUSSIA’S G-8 READMISSION
CONTE: RUSSIA’S G8 READMISSION WOULD BE IN EVERYBODY’S INTEREST

And when Germany and France, which have already been making moves to get back in Putin’s good graces, join, there will suddenly be a majority for the pro-Russian front.

* * *

On his way to what may be the most entertaining and confrontational G7 meeting in history later today in Toronto, president Trump made sure that the animosity with which he is met by the rest of the world leaders was cranked up to the max, when he told reporters this morning that Russia should be attending a Group of Seven nations meeting.

“It used to be the G-8 because Russia was in it and now Russia’s not in it. Now, I love our country, I have been Russia’s worst nightmare. I think Putin is probably going “man I wish Hillary won” cause you see what I do, but with that said, Russia should be in this meeting. Why are we having a meeting without Russia being in the meeting. And I would recommend that Russia should be in the meeting.

Whether you like it or not, and it may not be politically correct, we have a world to run and in the G-7, which used to be the G-8, they threw Russia out they should let Russia come back in cause we should have Russia at the negotiating table.”

Trump’s comment, which will surely be spun as having come straight from Putin’s brain-control device, the same one that got a few million middle class Americans not to vote for Hillary, prompted a spike in both Russian stocks…

… and the ruble.

…click on the above link to read the rest of the article…

Return of the Euro Crisis: Italy Quakes, Rest of the World Shakes and Merkel’s Empire Breaks

June 8, 2018

Return of the Euro Crisis: Italy Quakes, Rest of the World Shakes and Merkel’s Empire Breaks

Angela Merkel, emperor of the euro crisis zone

Europe’s many fault lines are spreading once again, bringing the endless euro crisis saga back in 3-D realism. Italy gained a new anti-establishment government last week, even as Spain elected a new Socialista government that could crack Catalonia off from the rest of Spain. All of Europe fell under Trumpian trade-war sanctions and threatened their own retaliation. And Germany’s most titanic bank got downgraded to the bottom of the junk-bond B-bin.

The Italian shakeup caused US bond prices to soar (yields to drop) in a flight of capital from European bonds, yet US stock investors took this invasion of troubles from foreign shores as good enough news to end the week on a positive note. The NASDAQ especially never looked happier, though financials feared contagion. As a result, the contrast between tech stocks and financials burst upward to its highest peak since the top of the dot-com frenzy:

S&P Tech stock reach levels comparable to the last tech crisis.

While Europe’s troubles apparently sounded like great news to US stock investors, the Italian crisis caused EU bank stocks in aggregate to take one of their largest avalanches in history, ending in a one-week cliffhanger at their lowest level in two-and-a-half years. Deutsche Bank, Germany’s titan of global finance, ended looking like the spawn twin of the Lehman Brothers:

Deutsche Bank alone could trigger more than just a euro crisis

Deutsche Bank appears to be leading the way into a full blown euro crisis like Lehman Bros did in the US financial crisis.

In one week, Europe with its impossible euromess moved back into position of being the world’s chief menace. The Eurozone is a house of cards with many exits, each with their own name, as I’ve written about frequently in the past, and it’s time to pay the never-ending euro crisis some attention once again.

Quitaly looks like next Brexit in everlasting euro crisis

…click on the above link to read the rest of the article…

Italy: The Center Cannot Hold

June 4, 2018

Italy: The Center Cannot Hold

For a generation, acceptance of the neoliberal doctrine that “there is no alternative” has paralyzed politics in the West. But what is the meaning of politics if there’s no alternative to the resulting Authoritarian Center, asks Diana Johnstone.

The traditional governing parties, center “left” and center “right” all follow the same neoliberal policies and constitute the self-designated “center.” Mainstream media enforce center right claims to authority on the base of orthodox economic expertise, while the center left derives its authority from its “values,” centered on an identity politics version of human rights. “Center” sounds so reasonable, so safe from dangerous “extremes” and unpredictable populism. Against such threats, the Center presents itself as the champion and safeguard of “democracy.”

How true is this?

World Values Survey results indicate that in Europe and the United States, people who describe themselves as “centrist” on the average have less attachment to democracy (e.g. free and fair elections) that those on the left, and even those on the far right. This is not as surprising as it may seem at first, since “centrists” are by definition attached to the status quo. In European countries, the authoritarian neoliberal “center” is institutionalized in the European Union, which imposes economic policy over the heads of the parliaments of the member countries, dictating measures which conform to the choices of Germany and northern Europe, but are increasingly disastrous for the Southern EU members.

The Rise of the Outcasts

The Centrist fear of democracy was resoundingly confirmed by March 4 legislative elections in Italy. The Center was relegated to the margins and outsiders burst in. The winner, with 32 percent of the votes, was the Five Star Movement (M5S) whose campaign “against corruption” won popular support in the impoverished South.

…click on the above link to read the rest of the article…

Italian Elections: Destroying Democracy to Protect the Globalist Elite

June 3, 2018

Italian Elections: Destroying Democracy to Protect the Globalist Elite

Recent events in Italy show that the country is getting the same type of treatment meted out to other countries whose election results do not agree with the neoliberal globalist elite and so must be stymied. The attitude shown by this transnational elite towards the winning forces in Italy is the same as that normally reserved for recalcitrant countries like Russia, Venezuela, China and Lebanon following their own elections or constitutional reforms.

European populations are increasingly failing to abide by the electoral wishes of the international oligarchs, with votes being directed to populist parties and the most anti-systemic candidates available. The most credible candidates for the people seem to be those who openly oppose the economic measures (neoliberalism) adopted over the last 20 to 25 years by the financial elite. These measures were specifically adopted to enrich the wealthy and enslave the rest of us through debt. Unsurprisingly, people are voting in candidates who are fighting for greater monetary and military sovereignty.

Without wishing to express a political judgment (often it would be negative), we need to note that events like Brexit, Trump’s victory, the partial success of Le Pen, the exploits of the nationalist fronts in Austria, Belgium, Hungary, Germany and, most recently, the victories of Lega and the Five Star Movement (Movimento 5 Stelle, M5S) in Italy are symptomatic of how the European population feels about 25 years of a reduction in national sovereignty and the worsening of individual economic conditions.

The globalist front, centered around financial speculation and the expropriation of national assets, has built up over the course of three decades its political network consisting of NGOs, think-tanks, journalists, experts, senators and parliamentarians scattered across the United States and Europe.

…click on the above link to read the rest of the article…

Weekly Commentary: Italian Drama

June 3, 2018

Weekly Commentary: Italian Drama

As I see it, cracks are opening in the greatest Bubble of all time. Serious fissures have developed in EM, Europe and China. Meanwhile, the stimulus-driven U.S. economic boom runs unabated. Global fragilities place downward pressure on U.S. market yields, while faltering Bubbles elsewhere stoke (self-reinforcing) outperformance – and speculative excess – within the U.S. equities market. The Fed faces a difficult challenge of weighing buoyant U.S. economic data and inflating asset prices against heightened global market fragilities.

Let’s begin with U.S. data. May non-farm payrolls increased a stronger-than-expected 223,000. The Unemployment Rate declined a tenth to 3.8%, matching the low going all the way back to 1969. Average hourly earnings were up 0.3% in May and 2.7% y-o-y. The ISM Manufacturing Index increased 1.4 points to a stronger-than-expected 58.7. There have been only nine stronger monthly readings looking all the way back to August 2004. Prices Paid rose slightly to 79.5, the high since April 2011. ISM New Orders jumped 2.5 points to 63.7, the high since February. The Employment component rose 2.1 points to a solid 56.3. The Chicago Purchasing Managers index surged 5.1 points to 62.7, the high since January. The Dallas Manufacturing Outlook recovered five points to the high since February. A Friday afternoon CNBC (Jeff Cox) headline: “The US economy suddenly looks like it’s unstoppable.”

April Construction Spending was up a much stronger-than expected 1.8% (strongest since January), led by an 8.7% y-o-y increase in residential construction. This followed stronger-than-expected S&P CoreLogic house price inflation (up 6.79% y-o-y). May Conference Board Consumer Confidence gained 2.4 points to 128, just below February’s 130, the strongest reading going all the way back to November 2000. The Conference Board Present Situation component jumped 4.2 points to 161.7, the high back to March 2001. Also indicative of boom time conditions, Personal Spending jumped 0.6% in April. May auto sales almost across the board surpassed expectations, with sales estimated up 5% from a year ago.
…click on the above link to read the rest of the article…

This is Italy. This is not Sparta.

June 3, 2018

This is Italy. This is not Sparta.

Nikolay Dubovsky Became Silent 1890

“European Stocks Surge Celebrating New Spanish, Italian Governments”, says a Zero Hedge headline. “Markets Breathe Easier As Italy Government Sworn In”, proclaims Reuters. And I’m thinking: these markets are crazy, and none of this will last more than a few days. Or hours. The new Italian government is not the end of a problem, it’s the beginning of many of them.

And Italy is far from the only problem. The new Spanish government will be headed by Socialist leader Pedro Sanchez, who manoeuvred well to oust sitting PM Rajoy, but he also recently saw the worst election result in his party’s history. Not exactly solid ground. Moreover, he needed the support of Catalan factions, and will have to reverse much of Rajoy’s actions on the Catalunya issue, including probably the release from prison of those responsible for the independence referendum.

Nor is Spain exactly economically sound. Still, it’s not in as bad a shape as Turkey and Argentina. A JPMorgan graph published at Zero Hedge says a lot, along with the commentary on it:

The chart below, courtesy of Cembalest, shows each country’s current account (x-axis), the recent change in its external borrowing (y-axis) and the return on a blended portfolio of its equity and fixed income markets (the larger the red bubble, the worse the returns have been). This outcome looks sensible given weaker Argentine and Turkish fundamentals. And while Cembalest admits that the rising dollar and rising US rates will be a challenge for the broader EM space, most will probably not face balance of payments crises similar to what is taking place in Turkey and Argentina, of which the latter is already getting an IMF bailout and the former, well… it’s only a matter of time.

…click on the above link to read the rest of the article…

One Word: Contagion

June 3, 2018

One Word: Contagion

Terrible news, I’m afraid.

The trainwreck that is Italian politics has always been a hoot to watch. But this time around the implications to what happens in Rome are, as Trump would say, yuuuge.

You’ve probably seen the news-flow out of Europe.

Tasked with finding a suitable candidate to head a coalition between Luigi Di Maio’s Five Star Movement and the far-right League headed by Matteo Salvini, a coalition, which I might add has to be scaring the living isht out of Brussels, has not been an easy task.

Firstly, they went and chose someone nobody has ever heard about.

Why?

Well, Italy has many “colourful characters” in politics, and that is what scares Brussels more than anything else. Draghi’s worst nightmare must be sitting across the table from this guy discussing Italy’s bill to Germany.

In case you’re not up to speed on what these gents stand for here’s a sampling from Matteo Salvini.

Slaves of the European Union? No, thanks!

I can’t wait for Italy, with our government, to regain its sovereignty to defend the national interest in any way possible. Unacceptable intrusion from a European bureaucrat in Italy’s elections. The immigration policies and economic sacrifices imposed by the European Union have been a disaster and will be rejected by the free vote of Italians.

European bureaucrats calm down. League will always defend our fisheries and the agriculture of Italy. Enough with the European standards that slaughter our businesses and our territory!

No! What this coalition needed was someone entirely vanilla, very unlike their own leaders, a nobody, a perfectly useful idiot.

And so they picked Giuseppe Conte.

Who, I hear you say?

Precisely.

But poor Giuseppe didn’t last very long. Heck, he was tasked with what was one helluva job — sugarcoating this…

…click on the above link to read the rest of the article…

Tag Archives: italy

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

ITALIAN 10-YEAR GOVERNMENT BOND YIELD AND SPREAD OVER 10Y GERMAN BUND YIELD

Post navigation

Latest Posts