Italy Suspends All Mortgage Payments

As per Reuters:

Payments on mortgages will be suspended across the whole of Italy after the coronavirus outbreak, Italy’s deputy economy minister said on Tuesday.

“Yes, that will be the case, for individuals and households,” Laura Castelli said in an interview with Radio Anch’io, when asked about the possibility.

Italy’s banking lobby ABI said on Monday lenders representing 90% of total banking assets would offer debt moratoriums to small firms and households grappling with the economic fallout from Italy’s coronavirus outbreak.

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The "Brotherhood" of The EU!

ITALY'S SALVINI SAYS FRANCO-GERMAN EURO ZONE REFORM PLANS "WILL NEVER HAVE OUR BACKING IF, AS IT SEEMS, THEY DAMAGE ITALY" right before EZ finmin meeting

— Quantitative Trading (@fiquant) November 19, 2018

The Euro Has Screwed Italy

Real incomes in Italy have fallen since it joined the euro. The country has become more unequal and poverty is rising. Unlike economic growth, which is once again falling. Unemployment is 10% and 2 to 3 times that if you’re young. But Italians still favour the euro.

— Andrew Neil (@afneil) November 9, 2018

Italy Too Big To Fail - Snort of Derision!

Italy is too big to fail, economically and politically. If Greece was able to plunge the euro zone into an existential crisis, it doesn’t bear thinking about what damage Italy could do if it ran into serious financial difficulties @JanDHildebrand #Italy https://t.co/saMO4aSQmJ

— Handelsblatt Global (@HandelsblattGE) October 23, 2018

Now Is The Time To Panic About Italy

ESM'S REGLING SAYS WE SHOULD NOT PANIC ABOUT ITALY

— *Walter Bloomberg (@DeItaOne) October 23, 2018

Italy Undermining The Euro

EURO WEAKENS ACROSS THE BOARD ON ITALIAN BUDGET CONCERNS

— *Walter Bloomberg (@DeItaOne) October 8, 2018

Italy Rocks The Euro Boat

ITALY WOULD SOLVE MOST OF ITS PROBLEMS IF IT HAD ITS OWN CURRENCY - RULING PARTY LEAGUE ECONOMIC HEAD - RTRS

— Martin Baccardax (@mdbaccardax) October 2, 2018

Italy's Fucked!

Political chaos in the euro zone's third-biggest economy won't be going away anytime soon, according to International Monetary Fund former chief economist Olivier Blanchard, who on Tuesday issued an ominous assessment of the country.

Panic roiled markets Tuesday as a political fight in Italy prompted one of its worst market sell-offs in years. Underlying investor fear was the prospect of Italy leaving the euro and others following suit, which Blanchard, now an economics professor at the Massachusetts Institute of Technology, described as more of a psychological fear than a realistic threat.

The potential concern, rather, involves Italy's creditors, who would have to "move carefully," the economist told CNBC's Joumanna Bercetche in Paris. The rest of Europe may avoid a domino effect, but Italy looks to remain mired in a quagmire.

"I suspect in this case the EU will do whatever is needed to prevent contagion, so I'm not terribly worried about contagion," Blanchard said. "I'm very worried about Italy. Not worried about the rest of Europe. It will be tough, but the rest of Europe, the rest of (the) euro will be OK."

My sympathies to the good people of Italy, the EU will crush them. As per Günther Hermann Oettinger (European Commissioner for Budget and Human Resources):

"Markets will teach Italy to vote for the right thing". 

Unicredit Hits The Skids

UniCredit to raise billions and cut 14,000 jobs https://t.co/jRZmEQjVHh

— BBC News (World) (@BBCWorld) December 13, 2016

Mamma Mia! - Italian Banks Crash and Burn

pic.twitter.com/ldo0TyAnRU

— Art.50 Holborn ✘ (@Holbornlolz) July 5, 2016

Draghi fiddles whilst the banks crash and burn!

Crisis Over? - Hollande's Delusion

According to Francois Hollande, President of France, the Eurozone crisis is over.

His upbeat and, frankly, delusional view is at odds with reality.

Istat, Italy's statistics office, has released data that shows the recession in Italy is in fact worse than previously thought; with revised figures for the first three months of the year showing that Italian GDP shank by 0.6%, not 0.5% as previously thought.

Eurozone Unemployment Hits 12.2%

Eurostat reports that the rate of unemployment in the Eurozone hit 12.2% in April 2013, up from 12.1% in March. This compares very unfavourably with the levels of unemployment in the UK (7.7%) and the USA (7.5%).

The level of youth unemployment in certain countries is particularly shocking, the highest being in Greece (62.5% in February 2013), Spain (56.4%), Portugal (42.5%) and Italy (40.5%).

As I have said before, this level of unemployment is not sustainable and is a threat to democracy.

Eurozone Languishes In Recession

EU GDP figures have confirmed that the Eurozone is languishing in recession for the second time in four years.

GDP in the Eurozone fell by 0.1% in Q3, having fallen 0.2% in the previous three months.

Meanwhile in Greece the unemployment rate in September rose to 26%, up from 25.3% in August (in September 2011 it was 18.9%).

Not all was doom and gloom, Italy continues to provide "comic relief" in the shape of ex Prime Minster Berlusconi's antics. He is now openly speculating that may well stand for Prime Minister for the fifth time in next March's elections.
 
Market rumours also abound that Mario Monti will resign as Prime Minister today.

Well done Italy for trying to provide a much need distraction form the financial chaos, sadly though this merely adds to it!

Don't Believe The ECB Hype

The markets and some commentators are trying to delude themselves that the ECB will finally do something tangible to "save" the Euro.

ECB President, Mario Draghi, has managed to con some people who should know better into believing that the ECB will conduct a major bond purchasing campaign. In theory the bond buying campaign will reduce the interest rates of Spain and Italy (note Greece is not included, because it has been thrown to the wolves) and thus save the Euro.

However, people are ignoring the two very large elephants in the room:

1 Any such decision and action to buy bonds will not occur until after 12 September, when Germany’s top court rules on the ratification of the ESM. This being over a month away means that Spain and Italy, because of crippling interest rates, will most likely have imploded by them.

2 Germany’s top court may well not ratify the ESM. Even if it does, all 17 eurozone members would need to agree to it as well. Fat chance!

Therefore, don't believe the ECB hype.

The Euro, in its present form, is finished!

The Oncoming Storm - Eurogeddon

Europe is poised to bailout Spain and Italy to the tune of £600BN, and the Telegraph reports that a  Bank of England policy maker has told traders to prepare for a devastating market seizure similar to the collapse of Lehman Brothers.

Batten down the hatches!

Italian Bond Yields Beyond Danger Level

Italian bond yields have gone beyond the 6% danger level this morning.

For why?

No one believes, with good reason. that the Spanish "bailout" will be anything more than a short-term palliative.

The Spanish "Bailout" That Dare Not Speak Its Name

The market "relief" at the Euro100BN Spanish "bailout" that dare not speak its name has been somewhat short lived, Spanish 10-year government bond yields are now back above Friday's close.

For why?

Whilst the Spanish banks may have been saved in the sort term, the fundamentals remain unchanged. Spain has the highest unemployment and the third widest fiscal deficit in Europe, and its government is not regarded as being fiscally competent.

Next in line comes Italy, for which there is not enough money in the Eurozone to bail it out.

The Fate of The Euro To Be Decided At The Gates of Rome

The ratings agency Fitch has decreed that the fate of the Euro will be decided at the gates of Rome, and has put Italy on notice that it faces a downgrade at the end of this month.

For good measure, Fitch's head of rating has stated that if Italian debt is restructured it will mark the end of the Euro as a reserve currency.

Given that a downgrade of Italy will increase the likelihood of a debt restructuring, Fitch has placed itself in the role of judge, jury and executioner.

In other news, the French are determined to push through a financial transactions tax; despite the fact that this tax has split the German coalition.

As European dictators learned in the past, a war on two fronts (in this case three fronts, Greece, Italy and France/Germany) is unwinnable. The European political "elite" need to focus their minds, and determine exactly what it is they really need to do, can do and want to do in the short term.

The German Juggernaut

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As the eye of the financial storm moves from Italy to Spain, it was fascinating to learn that the Irish budget was being circulated around the Bundestag for approval, before it was even seen by Irish members of parliament.

Coupled with the fact that both Greece and Italy are now, in effect, German financial protectorates (complete with German appointed Prime Ministers) and we have to wonder what form of "new" European political structure and governance model is being created.

Clearly David Cameron is concerned as well, because he is hot footing it to Berlin for talks with Chancellor Merkel.

Let us trust that something more tangible than a piece of paper will be forthcoming from that meeting!

ECB Does a Canute

The markets remain unconvinced by the new unelected technocrat government of Italy, and as such the bond yields have risen close to 7%.

The ECB is currently "doing a Canute", and buying bonds in order to keep the yield down.

This of course is merely kicking the can down the road.