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Thread: Italy's Fall and what that means to the EuroZone and US?

  1. #1
    User OutoftheBox's Avatar
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    Feb 2009
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    07-12-11 @ 10:33 AM

    Italy's Fall and what that means to the EuroZone and US?

    What repercussions will more than likely occur as Italy slips into it's state of instability? How will Italy's woes effect the US? How many more bailouts can be generated for failing countries abroad?

    Fallout From Europe’s Credit Default Swaps Could Be Greater Than Lehman - Robert Lenzner - StreetTalk - Forbes
    Fallout From Europe’s Credit Default Swaps Could Be Greater Than Lehman
    Jul. 11 2011

    A very astute Italian banker, who likes to warn me of incipient trouble, sent me the chart below which shows the bubbles in CDS derivative contracts outstanding against Greece, Portugal, Ireland, Italy and Spain.

    Stocks: Investors Rattled By Italy - Money News Story - WFTV Orlando
    Stocks: Investors Rattled By Italy

    By CNNMoney staff

    Posted: 6:10 am EDT July 12, 2011Updated: 8:43 am EDT July 12, 2011
    NEW YORK (CNNMoney) -- U.S. stocks were headed for another bruising day Tuesday, as fears about the eurozone debt crisis spreading to Italy rattled investors' nerves.

    Dow Jones industrial average, S&P 500 and Nasdaq futures were lower ahead of the opening bell. Futures measure current index values against perceived future performance.

    U.S. stocks tumbled Monday, as investors got spooked by worries about how far and deep Europe's debt crisis might spread.

    Manoj Ladwa, senior trader at ETX Capital, said contagion fears are likely to stay center stage for investors on Tuesday.

    "That's the main concern for the markets," Ladwa said. "Exactly how far this crisis is going to spread."

    The Italy ETF Ishares Msci Italy Index Fund fell 2.5% in premarket trading, after sliding 6.2% in the previous trading session.

    And the yield on 10-year Italian bonds continued to spike, as investors demand higher interest rates in exchange for holding the country's debt. On Tuesday, yields approached 6% -- an elevated premium over the German bund.


    U.S. Treasuries: Investors have been pouring into U.S. Treasuries as uncertainty surrounding Europe's debt problems grows. Treasuries are considered "safer" havens in times of uncertainty since it's backed by the U.S. government.

  2. #2
    PeteEU's Avatar
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    Yesterday @ 07:22 PM

    Re: Italy's Fall and what that means to the EuroZone and US?

    The whole Italy thing is more about speculators wanting yet again to hurt the EU and Eurozone than anything in reality.

    This all started when Berloscolooony did not agree with his finance minster on the budget. Then all hell broke loose with Anglo-American talking heads in the key markets screaming Italy is going under, look at their debt load and so on and so on... PANIC.

    That Italy has had 100%+ debt vs GDP long before it entered the Euro, one of the worlds largest economies (in top 10) and that most of its debt is internal, and has projected a surplus next year in its financies... suddenly did not matter one bit for the markets all of a sudden on a slow news week with little market volatility.. It is remarkable how they suddenly skipped over Spain and went straight for Italy.. guess the lies about "massive Spanish debt" could not be sustained the longer that news media pointed out that Spain had the lowest debt of the major economies... so Italy having 100+% was a much easier to explain to the masses as being a "problem"...

    This will most likely blow over, and in the mean time the Euro will fall which is only good. Hopefully it will drive down oil as well. But it wont blow over before next week most likely since the bank stress tests are out on Friday, so the markets have yet another excuse to panic like hysterical women (no offence meant to women in general).

    But I do wish that the EU could get their freaking act together and hit down hard on speculators and rating agencies for creating instability in the market for profit.. it is getting old.

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