Italy's debt crisis: 10 reasons to be fearful

[marmar]

from the Guardian UK:




.....(snip).....

1. Italy is the eighth largest economy in the world and the fourth largest in Europe. Its gross domestic product (GDP) was over $2tn in 2010. Greece, Europe's other basket case, has a GDP of $305bn – an economy about the same size as Dallas, Fort Worth and Arlington in Texas.

2. The country is label-queen heaven – Ferrari, Prada, Armani etc – and a major player in utilities, telecoms and banking. But the recession has put a strain on its economy and a succession of pop-up governments have failed to tackle fundamental problems, including the massive pension debts owed its ageing population. Italy's debts now top $2.2tn, or 120% of gross domestic product.

3. The debt matters because Italy is one of the world's largest markets for government bonds. Fears that Italy cannot pay what it owes on government debt have driven rates on Italian bonds to over 7%. The levels are higher than bond prices reached in Ireland and Portugal before they had to be bailed out.

.....(snip).....

10. US officials keep saying that US banks have little "direct" exposure to Italy. But US institutions have been snapping up credit default swaps (CDSs), insurance against credit losses. The value of guarantees provided by US lenders on government, bank and corporate debt in troubled eurozone countries rose by $80.7bn to $518bn in the first half of this year, according to the Bank of International Settlements. One, admittedly small, firm – MF Global – has already gone belly-up in the US thanks to indirect bets on Europe. If Italy goes down in a disorderly default, it will make the Lehman Brothers collapse feel like a Roman holiday. ..............(more)

The complete piece is at: http://www.guardian.co.uk/business/2011/nov/09/italys-debt-crisis-ten-reasons-to-be-fearful

[xchrom]

1. Recommend

[WillyT]

2. K & R !!!

:kick:

[customerserviceguy]

3. Italy is the next economic domino

And its troubles are the reason 100% of my 401K and investment accounts are in money market funds right now. I smell double-dip.

[tawadi]

4. K&R

[meow2u3]

5. Wall Street robbed Italy, too

The banksters aren't happy with robbing Americans of their life savings and stealing the homes and livelihoods out from under them. They reached their tentacles into Europe, ripping off European governments, retaliating against countries who refuse to go along with their evil schemes, and plots to dismantle social democracies in Europe, going after the smaller countries first: the Irish, Portuguese, Greeks, Spaniards, and now the Italians. No wonder they called those countries the PIIGS--they were conspiring to rip off those countries all along!

This European debt crisis is nothing more than an international conspiracy on the part of Wall Street sociopaths to dismantle social democracy, both in America and in Europe, and to force the people to pay for the crimes they committed against them.

Where's the Mafia when you need'em? We sure could use a little Neapolitan or Sicilian justice against the Wall Street fat cats. :evilgrin:

[riderinthestorm]

6. Fuck Joe Paterno!! This is the big story! Lost in the rumour du jure!

This is going to swamp us, probably within the next week! Pay attention folks! France and Germany are seriously proposing to leave the Eurozone and go it alone!! This is huge!

From the article:
9. The EFSF doesn't have unlimited cash and a multi-year financing programme for Italy would seriously deplete funds. If it can't save Italy, who is next? The European Central Bank (ECB), possibly, but it has been unwilling to step in for fear of "moral hazard" – the risk that euro countries will not make any move to put their accounts in order if they believe a bailout is coming. Economists fear that matters will have to get even worse before the ECB steps in. If Italy has to leave the euro and go back to the lira, the whole eurozone is in jeopardy.



Shit, this has the potential to crater the entire world into a major depression. If you aren't scared, you should be....