The situation in Greece is nearing the final climax!

[anandus]

Now up to 7.25%... could Italy be in major financial trouble by the end of the day?

7.25% Wow. That's tricky. Let's see if it will drop. Nay, let's hope it will drop.

By the way, this euro'crisis' has winners and losers.
Because of the low euro the export countries are profiting. In september Germany had it's highest export since the beginning of the crisis in 2008.

 

[Kyriakos]

Some latest rumors have the new government being announced at 14.00 local time (ie in 1 hour and 16 minutes)

Also it is said that general elections will take place at February 16nth.

 

[Ai Shizuka]

...

With that guy you are getting a fine perspective of the average italian voter.
It's either fanboys or raging haters.

Who cares if there isn't (and hasn't been in 20 years) a single decent alternate option. I'm not talking about a proper government able to fullfill the mandate. That would fall under the "utopia of the highest degree" label with our current opposition.

I'm talking about a government wich doesn't try to slam moderate centrists together in the same coalition with full-blown radical lunatics, with anti-berlusconism as the sole common goal.

Look at the 2008 leftist option: they had this stalinist idiot in their ranks, together with garbage like this or this.
All led by a moderate.

If this is the other option, I keep Berlusconi, thank you very much.


The above reply is coming from someone who's have been voting all over the chessboard in the last years, trying to find the lesser evil.

As someone said above, the entire political class in this country is a tragedy and needs to be demolished and reworked from scratch.
Not going into details here, but it didn't went downhill in the 80s.

I blame the immediate post-WW2 years or, to be completely honest, the idiots who absolutely HAD TO jam three countries in one, 150 years ago.

 

[Kyriakos]

I still wonder why there was no decision for a 'Marshall plan' for Greece before all this mess, given that its debt is only 3% of the European GNP.Inthis case it would have been viable, unlike with Italy which is a larger economy and has more debt in real numbers.
I mean all the chaos would have been avoided, at a minimal price.

If the Eurozone survives this mess i think it is the only viable solution, for Greece, Portugal and Ireland, then it can focus on Italy, Spain and France, which are bigger problems.

 

[Thorgalaeg]

I wonder why is Spain named when spaking about debt and why the EU wants more cuts in public spending. Spain´s public debt is among the lowest ones from Eurozone (as %GDP) In fact according to this wiki list (IMF data) it is among the lowest one there excepting Finlad, Denmark, Sweden and some other small northern states.

 

[SeekTruthFromFacts]

I feel that the people who lend money are just shooting themselves in the foot at this point.

Nobody is lending money to Italy.

Some people lent money several years ago and are regretting it.

Some people are speculating, usually in complex ways. One big brokerage (MF Global) has just gone belly-up after it's speculations collapsed.

A number of Italian bond issues now have no buyers at all: the yields (=prices) you see quoted are being plucked out of thin air. Another firm (Jeffries) almost collapsed a few days ago because the unlucky middlemen whose job is it to make sure there's always someone to buy and sell from.

 

[kronic]

Now up to 7.25%... could Italy be in major financial trouble by the end of the day?

Shocking. That was even faster and more violent than I had thought. Now at 7.40. The other big indicator of danger is that, for a few days now, the cost of short time funding is about as high or even higher than long term funding. Expect MASSIVE ECB intervention NOW or this genie will never be put in the bottle again. This is really the point where the ECB either ignores the rules, the treaties and the Germans and engages in massive government funding or the Euro sinks. Looks like "the markets" are not too joyful about Berlusconi's resignation, maybe because there's no obvious successor who can turn around the ship.

What this means is that Italy has virtually no access to foreign funding right now. The country just cannot borrow large sums at 7 % because that's going to contradict every effort on saving. If I remember it correctly, Italy has to issue debt of around €300 billion for the rest of this and the coming year. At 7 %, it could easily mean that Italy has to add another €12 billion to its deficit in the next year alone (assuming the old debt was issued at 3 % on average, which isn't too unreasonable). Over the course of a few years, when the entire debt stock has been rolled over once, that adds up to around €80 billion annually.

Mark this day in your calendar. It's the day when it has become obvious for everyone that the brown stuff is hitting the fan. Any words yet from Merkozy when they hold their next emergency meeting?

I wonder why is Spain named when spaking about debt and why the EU wants more cuts in public spending. Spain´s public debt is among the lowest ones from Eurozone (as %GDP) In fact according to this wiki list (IMF data) it is among the lowest one there excepting Finlad, Denmark, Sweden and some other small northern states.

It's because the balance sheets of households, financials and companies look awful. Spain is more like Ireland in a way where the mess in the private sector threatens the solvency of the government. If Spain is at some point forced in a situation where the government has to acknowledge what horrible damage the popping of the housing bubble has done to the banking sector, public debt will shoot up sharply (see UK, Ireland for examples). Btw, latest figures I've seen show Spanish public debt at 80 %, just below Germany's.

 

[Kyriakos]

Any words yet from Merkozy when they hold their next emergency meeting?

I think that there are no more emergency meetings, for all meetings are emergency ones by now. Let's see if the euro can be saved.

 

[Verbose]

Because if Greece wants one, why not Ireland, why not Portugal, why not Spain, and why not Italy? Except done like that every Tom, Dick and Harry placing money on the financial market can deduce it's not going to work, and will panic, and stuff will likely sprial out of control...

That's why not. Not because Greece couldn't use it, and not because anyone has it in for the Greek in particular. It's the message it might send regarding the Big Boys not doing so well, Spian and by now increasingly Italy.

A EU Marshall Plan for Greece might come when Greece has fallen so hard it's palpably obvious the Greek case has features that just don't apply to Ireland, Portugal, Spain and Italy.

 

[Verbose]

I wonder why is Spain named when spaking about debt and why the EU wants more cuts in public spending. Spain´s public debt is among the lowest ones from Eurozone (as %GDP) In fact according to this wiki list (IMF data) it is among the lowest one there excepting Finlad, Denmark, Sweden and some other small northern states.

Becuase the people placing money in the market it looking at the deficit spending and the growh figure and thinking it's never going to hold, unless expenses are cut.

But right now it's Italy they have it in for, I'd say largely because the Spanish debt is not yet a problem.

 

[Thorgalaeg]

So the problem is not public spending, bureaucracy and such but free-market capitalism...

 

[Verbose]

So the problem is not public spending, bureaucracy and such but free-market capitalism...

Only really if you really want to run huget deficits until national debt is equally huge...

Otherwise it's more of a warning system to balance your budget.

Right now jumpyness in the markets seem tied with negative expecations seeing the state of Greece, and how close Italy might be to going off the deep end. And the US... And Japan isn't looking to perky... Etc., etc.

Don't really see how we can make market actors less risk-averse. Problem seems more one of general human psychology and herd-instincts. A couple of years ago no one seemed concerned about risks until things tipped over and went to hell. Then suddenly there is just no damn haven safe enough, and everyone i scampering all over the place to find shelter from danger, some real some still imagined, a lot of which might come to pass, but then again might never happen.

The basic problem with "capitalism" like that seems to be the assumption that since it's dealing with serious money, and lievelihoods depend on it, it is implicitly assumed to be super-rational and objective, and not at all subject to some of the nastier limitations posed by human-group think.

 

[IrishDragon]

7.25% Wow. That's tricky. Let's see if it will drop. Nay, let's hope it will drop.

By the way, this euro'crisis' has winners and losers.
Because of the low euro the export countries are profiting. In september Germany had it's highest export since the beginning of the crisis in 2008.

The real winners are bond traders. There were Anglo-Irish bank bonds for sale earlier in the year at 50-60% of their original value, anyone who bought them have now doubled their profit. The Irish government paid out 100% (700m last week and another 3-4 billion next year) despite them being unsecured and not covered by the bank guarantee, and the bank a failed bank that is being shut down. Apparently the ECB wouldn't let the Irish government even buy them at the discounted market rate to save some money.

 

[anandus]

According to Reuters Petsalnikos will become prime-minister.

 

[Kyriakos]

I heard this too, but i really hope it is not the case, for Phillipos Petsalnikos may have a good first name to annoy the fyromians, but little more going for him. He is simply the running president of parliament, but he is no great figure even in Pasok.

Papandreou just said goodbye to the greek public (going to some tropical island i guess ) and said that the new pm will be "a figure that unites greeks". I wonder what that means. Ressurect pm Eleftherios Venizelos perhaps?

 

[Kyriakos]

It seems the pm will be announced tomorrow. Not that bad, only the european and world economy at stake.

It also seems that the one announced today would indeed have been Petsalnikos! The leader of the right-wing Laos party seems to have torpedoed this development, saying that Papademos must be the pm, or at least someone who is a prestigious personality.

I will say it again: it is a blessing for Greece that Italy is sinking now, since if the euro media were focusing on the latest charade i don't know what would happen...

 

[Quackers]

Can somebody explain to me why Italy is facing all this pressure all of a sudden? I can't be bothered reading the news

 

[Winner]

Because the world financiers are like sheep - mindless idiots who can only follow the others.

 

[Lillefix]

Can somebody explain to me why Italy is facing all this pressure all of a sudden? I can't be bothered reading the news

You wouldn't understand it even if you read the news.

 

[Samson]

Only really if you really want to run huget deficits until national debt is equally huge...

Otherwise it's more of a warning system to balance your budget.

Right now jumpyness in the markets seem tied with negative expecations seeing the state of Greece, and how close Italy might be to going off the deep end. And the US... And Japan isn't looking to perky... Etc., etc.

Don't really see how we can make market actors less risk-averse.

Is that what we want to happen? It seems to me (very uninformed) we want lenders to be MORE risk averse, so governments (and individuals) are not in a position to get so far into debt. It is the tendency to bail them out when they make these poor decisions on risk that is incentivizing them to take these illogical risks.