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Europe Scrambles To Deal With Italy Contagion Fallout, Calls Emergency Meeting As Former ECB Official Says "Very Worried About Italy"

Tyler Durden's picture


As was reported last week, Europe has suddenly found itself shocked, shocked, that the bond vigilantes decided to not pass go and go directly to the purgatory of the European core, in the form of the country that, at €1.5 trillion euros, has more debt than even Germany, but far more importantly, has a debt/GDP ratio of over 100%, and has the biggest amount of net notional CDS outstanding (not to mention that it has dominated Sigma X trading for the past several weeks). Italy. On Friday we explained why things are about to get really ugly for the boot as a flurry of bond auctions is now imminent. Which is why it was not surprising to read that tomorrow morning the European Council has called an emergency meeting "of top officials dealing with the euro zone debt crisis for Monday morning, reelecting [sic; we assume Reuters means reflecting] concern that the crisis could spread to Italy, the region's third largest economy." Newsflash: the crisis has spread to Italy. And it will only get worse at this point as Spain is largely ignored for now (until its own mortgage crisis starts making daily headlines like this one, however, where courtesy of the insolvent Cajas which are simply a GSE waiting to be nationalized, the can will be kicked down the road for at least 6-9 months ) and the vigilantes start dumping Italian debt and buying up every CDS available and related to Italy. "We can't go on for many more days like Friday," a senior ECB official said. "We're very worried about Italy." But, but, didn't Draghi just say Italy's banks will pass the second, "far more credible" stress test en masse? Welcome to the second, and final, part of the European insolvent dominoes contagion, the one which culminates with everyone bailing each other out... and the death of the euro currency of course.

As a reminder, this is the key chart that matters vis-a-vis Italy.

More from Reuters:

European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.

The talks were organized after a sharp sell-off in Italian assets on Friday, which has increased fears that Italy, with the highest sovereign debt ratio relative to its economy in the euro zone after Greece, could be next to suffer in the crisis. A second international bailout of Greece will also be discussed.

We reported on the UniCredit collapse, but here it is again:

Shares in Italy's biggest bank, Unicredit Spa, fell 7.9 percent on Friday, partly because of worries about the results of stress tests of the health of European banks that will be released on July 15. The leading Italian stock index sank 3.5 percent.

The market pressure is due partly to Italy's high sovereign debt and sluggish economy, but also to concern that Prime Minister Silvio Berlusconi may be trying to undermine and even push out Finance Minister Giulio Tremonti, who has promoted deep spending cuts to control the budget deficit.

"We can't go on for many more days like Friday," a senior ECB official said. "We're very worried about Italy."

Greece or Italy? Pick one.

Monday's emergency meeting will precede a previously scheduled gathering of the euro zone's 17 finance ministers to discuss how to secure a contribution of private sector investors to the second bailout of Greece, as well as the results of the stress tests of 91 European banks.

Back to "square one."

A senior euro zone official told Reuters on Friday that rather than progress being made in the talks with the IIF, as IIF managing director Charles Dallara has said, all sides were close to being "back to square one."

Dallara will attend the meeting of euro zone finance ministers in Brussels on Monday.

Since the euro zone's debt crisis erupted last year, the region's rich governments have aimed to isolate it to Greece, Ireland and Portugal, which have signed up to bailouts totaling 273 billion euros -- a sum that is small compared to the financial resources of the zone as a whole.

Spain, commonly seen as the next potential domino in the crisis, has managed to retain its access to market funding through fiscal reforms. But because of the large sizes of the Spain and Italy, pressure on the euro zone would increase dramatically if those countries eventually needed financial assistance.

Actually make that square minus one. So as Europe scrambles to convince itself it is not insolvent, America is doing the same across the pond. And when everything comes crashing down, as it will, once again nobody "will have been able to predict any of this."


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Sun, 07/10/2011 - 10:45 | 1441225 Atomizer
Atomizer's picture

We had better conduct another bank stress test first. LOL

Skittles, unicorns and rainbows will embark change & hope.

Barack Obama Speech from Berlin, Germany

Sun, 07/10/2011 - 11:45 | 1441349 Urban Redneck
Urban Redneck's picture

EBA revised the old "skittles & unicorns" stress test formulation after that presentation was made, we should now have a new "skittles & unicorns" formulation for the stress test...   

Sun, 07/10/2011 - 11:49 | 1441353 mickeyman
mickeyman's picture

Ireland can bail out all of Europe using gold from leprechauns.

Sun, 07/10/2011 - 12:23 | 1441407 Spastica Rex
Spastica Rex's picture

Good one.

Sun, 07/10/2011 - 13:06 | 1441480 Fish Gone Bad
Fish Gone Bad's picture

Why was Slovenia included in this graph?  Is that even a real country?

Mon, 07/11/2011 - 00:09 | 1442641 aminorex
aminorex's picture

I was surprised more by the position of France, which appears more parlous than Spain.  But OTOH Germany will be subsidising France by purchasing nuclear power.

Sun, 07/10/2011 - 12:28 | 1441417 Spastica Rex
Spastica Rex's picture

Good one.

Sun, 07/10/2011 - 10:38 | 1441227 buzzsaw99
buzzsaw99's picture

the bernank will bail them out. the federal treserve currency isn't enough of a joke yet.

Sun, 07/10/2011 - 11:27 | 1441306 Popo
Popo's picture

Nah, the banking cartel will be perfectly happy to rape Italy for her national treasures. The Duomo will make an excellent office for Goldman Sachs. And Michaelangelo's David would look killer in the lobby of 60 Wall.

Also, there are hundreds of Palazzos in Venice that the boys at Deutchebank would be happy with.

Thanks for playing, Italy.

Sun, 07/10/2011 - 11:31 | 1441319 Djirk
Djirk's picture

Exactly, not to mention the Chinese who want a villa in Cuomo.

I am not an expert on the Italian finance system, but I would not be suprised if the off balance sheet, FX tricks and shadow banking liabilities are HUGE.



Sun, 07/10/2011 - 12:20 | 1441400 TBT or not TBT
TBT or not TBT's picture

The Chinese will have their own severe issues thanks to any such collapse. My advice, stock up on iPads because they are super cheap in today's dollars and euros, and After they will be the new currency.

Sun, 07/10/2011 - 10:38 | 1441228 snowball777
snowball777's picture

Visit Venus - For a Few Euros More...

Sun, 07/10/2011 - 10:40 | 1441230 ArkansasAngie
ArkansasAngie's picture

"tomorrow morning the European Council has called an emergency meeting" ???


Sun, 07/10/2011 - 14:43 | 1441626 SAME AS IT EVER WAS

Yep, ssdd! Since the great engineered "crash" the nation defualt drama saga started with Dubai, then Ireland, Greece(that one was played well) now its Italy. The finanicial and political drama queen writer make the real housewives series look like a love story in comparision. Total bullshit! BTFD!

Sun, 07/10/2011 - 10:45 | 1441237 Caviar Emptor
Caviar Emptor's picture

Open the money fire hose. Again. Looks like the old fire brigade from 2008 is getting a bit overwhelmed. Unfortunately, 2008 was already a 5 alarm fire (5 continent-cordinated-bailout). So who can we call in now to help? Antarctica? Mozambique? Greenland? Sandwich Islands? 

The only suggestion I have: throw all the bad debt in Gitmo and declare mission accomplished. 

Sun, 07/10/2011 - 10:46 | 1441238 snowball777
snowball777's picture

Mars Needs Dollars.

Sun, 07/10/2011 - 10:53 | 1441249 Long-John-Silver
Long-John-Silver's picture

They too are suffering Global Warming. I have no idea how you control Global Warming with Dollars but NASA has been planning to go to Mars for decades. I wonder how that will happen without the ability to launch Space Craft.

Sun, 07/10/2011 - 10:56 | 1441254 snowball777
snowball777's picture

Knit them into a solar shield...and I'm sure that set in the Mojave is still available. ;)

Sun, 07/10/2011 - 11:50 | 1441357 QQQBall
QQQBall's picture

Problems with pIigs debt?. Who cuddanode, right?

Sun, 07/10/2011 - 10:58 | 1441262 Caviar Emptor
Caviar Emptor's picture

Aren't there some terrorists on Mars we need to go after? 

Sun, 07/10/2011 - 11:01 | 1441266 Long-John-Silver
Long-John-Silver's picture

There have been warnings of Martian invasions for decades.

Sun, 07/10/2011 - 11:04 | 1441272 DeadFred
DeadFred's picture

It is rumored they have Weapons of Martian Destruction.

Sun, 07/10/2011 - 11:16 | 1441291 Caviar Emptor
Caviar Emptor's picture

Say no more. We're on it

Sun, 07/10/2011 - 11:36 | 1441332 Transitory Disi...
Transitory Disinflation's picture

We could always have Martian Law declared.

Sun, 07/10/2011 - 16:55 | 1441873 snowball777
snowball777's picture

Is there oil in those canals?

And do we want to see the dollar as the galactic reserve currency?

Sun, 07/10/2011 - 20:57 | 1442269 Miss anthrope
Miss anthrope's picture

really, thank you......... golf clapping...................


BEST LAUGH ALL WEEKEND... I lead a somewhat desolate existence and seek solace from all here.  ......... tears..........

Sun, 07/10/2011 - 10:53 | 1441251 toady
toady's picture

mmmmmmmmm, sandwiches.

Sun, 07/10/2011 - 15:45 | 1441750 jerry_theking_lawler
jerry_theking_lawler's picture

i just figured it out....

South Sudan!!!

Sun, 07/10/2011 - 16:56 | 1441875 snowball777
snowball777's picture

New currency: dirt.

Sun, 07/10/2011 - 10:48 | 1441244 Long-John-Silver
Long-John-Silver's picture

and the death of the euro currency of course


The US Dollar will follow the EURO over the cliff. All the worlds fiat currencies are tied together like mountain climbers. The PIIGS are dangling and dragging all the others over the cliff with them.


Sun, 07/10/2011 - 10:52 | 1441250 Caviar Emptor
Caviar Emptor's picture

It's gonna be a movie cliff hanger all summer-long! Just like in the old movies. 

Dollar is at the top of the cliff trying to pull on a string around it's waist to keep the others from falling down the canyon. But every sweaty step back is quickly followed by two steps closer to the edge. 

Get me some popcorn!

Sun, 07/10/2011 - 14:44 | 1441625 Sudden Debt
Sudden Debt's picture

Let's just give up that idea of the death of the euro or dollar.

They'll just keep in printing their worries away.


We've all seen the 100 year dollar value chart. The dollar has dropped 99% in that time.

So if history is any lead:

In a decade from now, the euro and dollar will be down 99% yet again but they'll both will still be there.


The McDonalds DEAL OF THE DAY will only cost 100$!

And the Happy meal will be a 1000$


Sun, 07/10/2011 - 17:02 | 1441891 Ghordius
Ghordius's picture

So simple! +1

Sun, 07/10/2011 - 10:49 | 1441245 buck777
buck777's picture

Im getting a boner

Sun, 07/10/2011 - 10:51 | 1441247 freethinker4now
freethinker4now's picture

Gold bitchez

Sun, 07/10/2011 - 10:52 | 1441248 Jack Napier
Jack Napier's picture

Still no sign of Jean-Claude Van Damme.. but at least they got the Double Impact part right.

Sun, 07/10/2011 - 10:56 | 1441256 Long-John-Silver
Long-John-Silver's picture

For some reason my wife hates it when I tell her a Damme movie is coming on TV.

Sun, 07/10/2011 - 10:59 | 1441263 Caviar Emptor
Caviar Emptor's picture

Or if you tell her you're going on the Dam Tour

Sun, 07/10/2011 - 11:03 | 1441270 Long-John-Silver
Long-John-Silver's picture

I've had the Hoover Dam Tour. It was very nice.

Sun, 07/10/2011 - 11:19 | 1441296 Caviar Emptor
Caviar Emptor's picture

So did Clark Griswold

Sun, 07/10/2011 - 11:59 | 1441374 HITMAN56
HITMAN56's picture

you know where I can get some dam bait...

Sun, 07/10/2011 - 12:56 | 1441467 Things that go bump
Sun, 07/10/2011 - 10:55 | 1441255 Seasmoke
Seasmoke's picture


Sun, 07/10/2011 - 10:56 | 1441257 MonkeySmoke
MonkeySmoke's picture

the euro will start falling off a cliff in mid-late 2012 and the dollar will follow suit. nothing to see here, except as David Byrne put it "same as it ever was".

Sun, 07/10/2011 - 10:56 | 1441259 Number Yuan
Number Yuan's picture

Its very clear the dominoes are going to fall, we can only guess the order.


I take the views of Zerohedge and of course Nigel Farage in the UK as the best available.


Bye Bye Euro !

Sun, 07/10/2011 - 10:57 | 1441261 FeralSerf
FeralSerf's picture

Italy has some rather nice art pieces that would go well in some of the oligarchs' collections.  Maybe Nat could stop over on his way back from his birthday party and make a deal on a present to himself.  A Bernini or a Michelangelo perhaps?

Sun, 07/10/2011 - 11:02 | 1441268 Caviar Emptor
Caviar Emptor's picture

Rumor that they're offering to rename the Coliseum "Juncker Stadium" ..just rumors

Sun, 07/10/2011 - 10:59 | 1441264 bob_dabolina
bob_dabolina's picture

CTRL+P €1.5 trillion euros 

Select Printer: Bureau of Engraving and Printing CC Ben Bernanke

Intiate eur/dollar FX swaps

Isn't that the playbook they've been using?

Sun, 07/10/2011 - 11:04 | 1441273 Long-John-Silver
Long-John-Silver's picture

these are not the droids you're looking for

Sun, 07/10/2011 - 11:20 | 1441285 Caviar Emptor
Caviar Emptor's picture

Yep. But these guys have egos. They don't like being caught hitting CTRL-P for the fourth time when they swore they weren't doing it in the first place. Embarrass them a few too many times and they start to have in-fights, point fingers, and become more unpredictable. 

And there's the tiniest bit of reason still left in some which tells them that they're redlining the risk of price instability in their own economies. Situation is way more complex now than it was in 2008 when it was "just a bank liquidity crisis"

Sun, 07/10/2011 - 11:39 | 1441337 FeralSerf
FeralSerf's picture

They could just blame the Irish.  There are precedents.

Sun, 07/10/2011 - 12:17 | 1441395 Mr. Sheeple
Mr. Sheeple's picture

Good point. Now it's a "zombie apocalypse crisis". CNTL+Z

Sun, 07/10/2011 - 11:11 | 1441277 thunderchief
thunderchief's picture

The end game to all this has little to do with debt.  It will come down to the realization that you cannot cook, fry, filet, boil and destroy every natural resource on this planet along with your atmosphere and oceans that took hundreds of millions of years to create in a little over 200 years.  Global Trade is pure garbage and does not work.

Sun, 07/10/2011 - 11:19 | 1441294 grey7beard
grey7beard's picture

>> It will come down to the realization that you cannot cook, fry, filet, boil and destroy every natural resource on this planet along with your atmosphere and oceans that took hundreds of millions of years to create in a little over 200 years.

Bingo!!  The yeast people are about to have a sugar high hangover that ain't going to be pretty.



Sun, 07/10/2011 - 11:22 | 1441304 Sambo
Sambo's picture

Politicians & corporations have no understanding of what is good for the planet. The orgy has ended in a bloody mess.

Sun, 07/10/2011 - 11:41 | 1441341 FeralSerf
FeralSerf's picture

They may need to cull some sheep.

Sun, 07/10/2011 - 22:03 | 1442436 Solid
Solid's picture

You're an idiot. It's people like you that put this Progressive shit in place and now we're paying for all your lovely programs. Dumbshit!

Sun, 07/10/2011 - 11:11 | 1441279 tom a taxpayer
tom a taxpayer's picture

Mamma Mia! Does this mean no meatballs with my spaghetti.

Sun, 07/10/2011 - 11:41 | 1441343 Blotsky
Blotsky's picture

Correct. Because in order to have meatballs with spaghetti, you must first have spaghetti. And the spaghetti we think we have isnt really there.

Sun, 07/10/2011 - 11:52 | 1441366 mickeyman
mickeyman's picture

Can't they print more spaghetti?

Sun, 07/10/2011 - 11:11 | 1441280 sheeple2012
sheeple2012's picture

Send over Joe LaSagna with some rosy GDP and job creation forecasts for Italy

Sun, 07/10/2011 - 11:13 | 1441283 r101958
r101958's picture

Let's imagine that there is a Benelux ratings house, a Franco ratings house and a German ratings house. All of them are of the same 'reputation' as S&P, Fitch, Moody's. Does anybody here actually think that they would not be rating Euro debt at AAA and downgrading each and every one of our states. Not to mention downgrading US national debt? Maybe then there would be a 'flight to safety' to the Euro or maybe even more to the Canadian dollar and the CHF. The fact that the big three rating houses are located in the UK and US should be seen by everyone as a huge red flag. The overall scheme here is that when investors start running away from US treasuries the UK/US owned ratings houses will pick another Euro state to downgrade thereby sending those investors running right back to US treasuries.

   To clarify; I am not stating that the Euro states shouldn't be downgraded, they should be. However, so should US/UK debt as well as US state/municipal debt. That could happen if there were Euro owned rating houses (the EC has stated as much). The Chinese have started their own ratings house for this very reason. Instead we (the US/UK) have a ratings house monopoly and you'll note that our debt and that of the states is still rated very favorably.

Sun, 07/10/2011 - 11:52 | 1441362 FeralSerf
FeralSerf's picture

Have you heard about the Anglo-American Power Elite?  Or: "The Sun never sets on the British Empire"?  (Yes, America is still part of the British Empire, thanks to the War Between the States, The Great War and Zionism.)

The Big Question is: "Who is the Real Head of State?"  I suspect it's not The Queen (although she does get perks).

Sun, 07/10/2011 - 12:16 | 1441390 bob_dabolina
bob_dabolina's picture

Barney Frank runs this shit you just don't see it.

More seriously, you might want to research the Bank of International Settlements. It's like a little cabal for the heads of Central Bankers across the world. 

Board of Directors include some of our favorite names: 

Ben Bernanke

Jean-Calude Trichet


William Dudley

Mervyn King 

Some Chinese guy, I can't spell his name (but apparently he's a pretty big deal)

etc etc etc

Sun, 07/10/2011 - 12:51 | 1441456 Jack Napier
Jack Napier's picture

You are spot on with the Basel BIS pulling the strings for the central banks, but I would defer to the Rothschilds above Barney Frank pulling the BIS' strings.

The BIS is currently warning that interest rates will need to rise soon and swiftly, but with the current abysmal employment numbers and GDP growth with QE2 it doens't look good for stability in a non-QE3 world. Gold and silver should either get more safe haven demand in that case, or else monetary debasement will bolster them if QE3 does happen. Either way, go metal or go home.

Sun, 07/10/2011 - 14:05 | 1441559 bob_dabolina
bob_dabolina's picture

My comment about Barney Frank was not serious in any form.

Sun, 07/10/2011 - 11:12 | 1441284 lizzy36
lizzy36's picture

Interesting that in the NYT's weekend magazine, Shelia Bair (btw, why is is always the sensible women like Broksley Born and Shelia Bair that are marginalized by the likes of Geithner Summers, Paulson, Rubin.....something to think about) gives a long exit interview.

She open by stating:

‘They should have let Bear Stearns fail,”

She had a second problem with the way the government went about saving the system. It acted as if no one were at fault — that it was all just an unfortunate matter of “a system come undone,” as she put it.

“I hate that,” she said. “Because it doesn’t impose accountability where it should be. A.I.G. was badly managed. Lehman Brothers and Bear Stearns were badly managed. And not everyone was as badly managed as they were.”

I think that the Bear deal set up an expectation for government intervention that was not really helpful,” she told me. Letting Bear Stearns fail would most likely have sent the right message to the rest of Wall Street, while there was still time, and without creating the kind of chain reaction that the Lehman failure caused. “I’ve always thought,” she said, “that it was really important for everybody to have to play by the same set of rules.”

I can't help but thinking that this applies to Greece as well. The should have let it default last year. They should have sent the right message to all the banks, and the rest of the EU countries, that everyone is playing by the same rules. And bondholders need to be held responsible and ACCOUNTIABLE for their bond holdings.

Now we are just doing a "second verse same as the first"....

Shelia hypothesized, that the reason her idea's were not taken seriously was twofold: maybe it was gender or that I’m not an Ivy League person. It could be; everybody has their biases. I have a feeling it was both. Which is unfortunate because the Ivy League males are once again running 10 paces behind, busy changing the rules to suit their class of people, and once again going to bring the world to the brink.

Amazing that we keep putting our faith in these same people.

Sun, 07/10/2011 - 11:25 | 1441310 Cursive
Cursive's picture


(btw, why is is always the sensible women like Broksley Born and Shelia Bair that are marginalized by the likes of Geithner Summers, Paulson, Rubin.....something to think about)

Good point about the gold ole boy network which is mainly just boys and the girls are for raping in hotel rooms, etc.  It's not as though Larry "Women Aren't As Smart As Men" Sumners would really take her seriously.  As for Sheila, where were these comments when it all went down in 2008?  No, she was too busy borrowing from the Treserve to shore up a lack of funds in the FDIC and colluding with the big banks to buyout little banks with subsidies from the FIDC (which were really subsidies from the taxpayer).  She's just another shill in the ponzi wheel.  A lesser, out-of-the-loop shill, but a shill nonetheless.

Sun, 07/10/2011 - 11:34 | 1441326 Fazzie
Fazzie's picture

 No need for the gender card.

  Any male/female/hermaphodite who dares even hint at accountability from the TBTFs or departs from the party line of "no one saw it coming" and "bailouts or armageddon", in a high level posistion in the govt, will find themselves looking for a job and dont bother applying at Goldman with that attitude.

  I give her kudos for actually apparently having at least a trace of moral convictions and finally speaking out. 

  In our current form of crony capitalism/socialism, any regulator has to realize their real duty is to rubber stamp everything and look the other way while giving press conferences saying everythings peachy.

 Mary Schapiro understands this and still has a job even after clearing the 2nd biggest ponzi scam in history (Uncle Sam #1, Madoff#2)in spite of sporting female genatalia.

 Any kind of regulator who would atually regulate or gasp.. enforce regulations, or in any way dispute the ponzi will be out on their asses be it a nice powdered, pampered ivy league ass or not.



Sun, 07/10/2011 - 11:37 | 1441334 oogs66
oogs66's picture

thanks, I never really liked her, but have to agree with her opinion on Bear

Sun, 07/10/2011 - 11:52 | 1441365 sheeple2012
sheeple2012's picture

Hope she did the left, right, left, right bobble-head palsy thing as she gave the interview... so weird

Sun, 07/10/2011 - 12:03 | 1441381 Hephasteus
Hephasteus's picture

Fuck the gender card. Bear sterns failed because it's a bank. It's a bank in a banking system that doesn't work. Will not work for long term can not work for long term and has to eat everybody with an inflation monster ocaisonally. Only this is when the collapse from credit creation that doesn't add up to underlying assets makes the normal inflation cycle hopless. Sheila Bairs vagina doesn't change the rules of the sytem.

Sun, 07/10/2011 - 12:07 | 1441386 A Man without Q...
A Man without Qualities's picture

Excellent comments.

Those "wise men" to which we have entrusted our system continue to push for "solutions" that serve their own interests.  This narcissistic/ sociopathic tendency is to ignore mistakes and fallibility as well as a lack of true empathy or altruism.  I mean, ask yourself, how much do you think Summers or Rubin really care about society outside of their limited community?  

It is my view this is the root cause of the collapse of most complex societies, where the elite refuse reform but continue to consolidate wealth and power while ignoring how the broader society is breaking down.

Sun, 07/10/2011 - 13:40 | 1441527 cosmictrainwreck
cosmictrainwreck's picture

I always had a soft spot for girls named Sheila. Seriously, I liked the lady from the start, and I submit she did as good a job at FDIC as could have been done considering how fulla bullshit everyhting is......

Sun, 07/10/2011 - 11:15 | 1441287 PulauHantu29
PulauHantu29's picture

I heard that someone ordered 100 stromboli and 57 plates of spaghetti.....200 bottle of chianti......I guess they can think better with a little italian food.

Sun, 07/10/2011 - 11:59 | 1441377 tom a taxpayer
tom a taxpayer's picture

It must be getting worse...they just now ordered 200 dishes of cold scungilli.

Sun, 07/10/2011 - 11:15 | 1441288 Sambo
Sambo's picture

Trade chinese noodles for spaghetti. Problem solved.


Sun, 07/10/2011 - 11:15 | 1441289 TradingJoe
TradingJoe's picture

Bella Italia la altra scopata!

Sun, 07/10/2011 - 11:16 | 1441290 Fazzie
Fazzie's picture

 Goddamn! now the PIGS are getting body slammed by the evil speculators/vigilantes BEFORE they can even get the latest stress test farce completed!

  Damn isnt the script supposed to be :  1) yeilds rise, 2) official denials, 3) yeilds rise anyway 4) more official denials 5) stress tests Vx.x  6) market is calmed for at least 2 months 7) yeilds rise 8) bailout denials 9) bailout or the end of the world alarm is sounded 10) bailout commences led by the few remaining US taxpayers

 Now they are jumping right to the bailout denial/bailout accepted part because the stress tests are seen as a gasp....farce.


 Why waste money to run stress tests when the market has already called the bluff?


Sun, 07/10/2011 - 11:19 | 1441297 Mr_Potatohead
Mr_Potatohead's picture

Italy is supposed to have lots of gold: ~2500 tons.  Maybe time is running out and this gold is needed/wanted by TPTB.  Do you really think TPTB would allow Italy to keep this gold in order to avoid serfdom after the debt bubble collapses and today's fiat currencies are crushed by gold?

Sun, 07/10/2011 - 11:22 | 1441305 Caviar Emptor
Caviar Emptor's picture

Most of that gold is ancient Roman coins and artifacts, crucifixes and gold edging on manuscripts. 

Sun, 07/10/2011 - 11:36 | 1441331 Urban Roman
Urban Roman's picture

It still melts at 1064°C.

What happened to all those Etruscan gold artifacts, do you suppose?

Sun, 07/10/2011 - 11:41 | 1441344 tip e. canoe
tip e. canoe's picture

go inside private chapel underneath St. Peters Cathedral, look up.

Sun, 07/10/2011 - 12:05 | 1441385 Urban Roman
Urban Roman's picture

Thanks for the reminder.

The bones of all those dead popes will make a great source of phosphate fertilizer.

Sun, 07/10/2011 - 13:10 | 1441482 tip e. canoe
tip e. canoe's picture

as long as we burn the formaldehyde off first.   a stake is always good for that.  ;~)

Sun, 07/10/2011 - 13:11 | 1441484 Things that go bump
Things that go bump's picture

No doubt followed by miraculous rise in yield wherever it is spread.

Sun, 07/10/2011 - 19:37 | 1442175 francis_sawyer
francis_sawyer's picture

best not to get Vatican City confused with Italy

Mon, 07/11/2011 - 00:36 | 1442665 tip e. canoe
tip e. canoe's picture

absolutely, but i would be very surprised if it's "Italy" that holds the Roman gold that still exists within the geographic borders of what's now called "Italy".

Sun, 07/10/2011 - 12:09 | 1441382 lookma
lookma's picture

The ECB has the gold on their balance sheet, its the first and most important asset they hold.  They mark it to market every quarter -

Who knew, the world continues to shift from a dollar reserve currency to a Euro reserve, China buying Euro debt, the Euro blowing off the US ratings agencies, the Euro PIGS always able to re-fi (even to private hands). 

Why do so many big players *not* get the "OMG the europe is a disater" meme that what ZH petulanty and ignorantly screams about every day?  Seriously, why is ZH so smart and all these big actors so dumb?  HMMM.....

Maybe its the gold? :----0

What is clear is that the pandemic of GATA infested, ignorant gold memes shows no sign of abating.

Carry on monkeys.

Sun, 07/10/2011 - 12:21 | 1441402 equity_momo
equity_momo's picture

Doesnt that 363 bil gold belong to the individual nation states forming the european union? Not the ECB in essence , so when the Euro breaks up , that gold stays in each Sov state.

Either way  , its a similar amount owned by the US and less as a percentage of natl forex reserves.

Its not enough to bail any Sov State until its revalued. The ECB will end up having to rewrite its constitution if it wants to keep the EZ in tact - dirtect monetization.

Sun, 07/10/2011 - 15:42 | 1441745 Non Passaran
Non Passaran's picture

You always post he same ignorant stuff. Read the follow up comment (above mine) and get to your senses.

Sun, 07/10/2011 - 11:28 | 1441308 plocequ1
plocequ1's picture

I am Anzo the baker. If there is trouble i am here to help.  For your father , for your father

Sun, 07/10/2011 - 11:49 | 1441356 John Law Lives
John Law Lives's picture

Enzo at the 1:05 mark.  Not great quality on the video, but it works.

Sun, 07/10/2011 - 13:18 | 1441497 plocequ1
plocequ1's picture

I stand corrected.. Enzo, not Anzo

Sun, 07/10/2011 - 13:51 | 1441545 mick_richfield
mick_richfield's picture

It looks like Enzo the Banker has a gun in his pocket.  But that's just his empty hand.

Sun, 07/10/2011 - 11:28 | 1441316 oogs66
oogs66's picture

they should have let greece default, stocks would be down 5% but no one would be focusing on Italy.  By "saving" Greece, they gave everyone the chance to focus on Spain and Italy. 

Sun, 07/10/2011 - 20:50 | 1442251 equity_momo
equity_momo's picture

Not true.  Greece wasnt saved , nor will Italy or Spain or anyone. Its merely rearranging deck chairs on Titanic , maybe buying a few more weeks months or possibly years.

Allowing Wall St to completey crash and burn in 08 would have been the best strategy. Collateral damage would have occured but it was ultimately the only sane option. We didnt take it because we are run by Wall St.

PIIGs is just a side show. The appetizer before the big bang.

Sun, 07/10/2011 - 11:31 | 1441320 giovanni_f
giovanni_f's picture


No Problem.

Fitch, US Rating Agency, means:

Minnesota: AA+

Italy: AA-

Illininois: A

California: A-


Sun, 07/10/2011 - 11:57 | 1441371 ebworthen
ebworthen's picture

The states can raise taxes, fees, cut pay, pension, services; the list is endless.

Sure, the politicians might get voted out, but it will take a couple of years or cycles.  Then what?  More cuts, or more debts spending.

The states will still be there with the ability to raise utilities, allow rent increases, and put the boot to the citizenry at the behest of the elites.

Anyone with assets will be bled out.

Sun, 07/10/2011 - 12:05 | 1441383 r101958
r101958's picture

Euro states can do that too.

Sun, 07/10/2011 - 12:19 | 1441397 ebworthen
ebworthen's picture

No doubt.

Difference being that Euro states are not nearly as dependant on the ECB as our U.S. states are on federal gravy.

It will be a lot easier for Euro nations to restore national identity and currency than it would be for a U.S. State to secede from the union.

That's why the Euro crisis is bullish for coin collectors; new Drachma and Lira soon.

Sun, 07/10/2011 - 11:35 | 1441328 equity_momo
equity_momo's picture

I see the bailout conditioning has even reached most ZH readers.

What will transpire in markets is an all out collapse just when you think the Fed and ECB can extend and pretend indefintely. They cant.

If you need any more warnings youre going to be trapped in this system until your net worth is whatever is in your physical possession.

This summer will not be plain sailing for markets.

Sun, 07/10/2011 - 11:39 | 1441340 Fazzie
Fazzie's picture

 Bring it on! Im so short I could walk under a pegnant snake.

Sun, 07/10/2011 - 11:36 | 1441329 Ranger4564
Ranger4564's picture

That is a very handy chart.  It highlights which nations will be next in line for the hijacking.  Greece, Italy, Portugal, Belgium, Netherlands, Spain, etc etc.  US and UK are conveniently missing, but they'll get turns, like China and Russia.

Sun, 07/10/2011 - 11:37 | 1441335 Fazzie
Fazzie's picture

 Okay, assuming the bankers of the IMF have already divvied up Greeces islands and monuments, what does Italy have that could scare up a few bucks in a rummage sale?

Sun, 07/10/2011 - 11:39 | 1441338 Platinum_Investor
Platinum_Investor's picture

One country at a time endinging with the biggest ponzi scheme of them

all.  United States!  What you think another 5 years?  I think the dominoes

will start falling quicker.

Sun, 07/10/2011 - 11:39 | 1441339 sasebo
sasebo's picture

Who gives a rats ass besides the rat?

Sun, 07/10/2011 - 11:42 | 1441345 Fazzie
Fazzie's picture

 Didnt Descartes put forth that same question hundreds of years ago?

Sun, 07/10/2011 - 11:41 | 1441342 John Law Lives
John Law Lives's picture

Print more Euros.

Print more Dollars.

Print more Yuan.

Print more Yen.

Kick the can down the yellow brick road and lets have a stock market rally...

Sun, 07/10/2011 - 12:01 | 1441378 Incubus
Incubus's picture

I'd like to think of myself as some form of misanthropic nihilist...but when you take a look at keynesianism, you can't help but wonder just how sick Keynes really was:  you'd think he was some nihilist that was trolling the world; the entire system was predicated on the belief of maintenance of the myth of perpetual spending and subsequent growth, with complete disregard for any reality.


"In the long run, we're all dead."


Sun, 07/10/2011 - 13:11 | 1441485 curmudgery
curmudgery's picture

Stop blaming JMK already.  He never said a debtor country could deficit-spend to prosperity.  the method always assumed a net creditor starting position.  Yet another indictment of our own economic soothsayers and policymakers.  I used to be in software... most tech support calls were because customers wouldn't invest any time to learn/understand the application.  After taking care of them, We would shake our heads and curse, RTFM!   I think it applies to our so-called leaders and Keynes very nicely. 

Sun, 07/10/2011 - 15:26 | 1441709 Saxxon
Saxxon's picture

John Law Lives, exactly.  A politician can neither attain nor retain power by doing the right thing in this regard.

Sun, 07/10/2011 - 16:58 | 1441880 snowball777
snowball777's picture

The only yellow on that road is stains from trickle-down.

Sun, 07/10/2011 - 11:46 | 1441350 Clint Liquor
Clint Liquor's picture

Gordon T. Long has been, and is, right;


Then Europe

Then the US States

Then Japan

Then the USA

All going down the drain, one after another.

Sun, 07/10/2011 - 11:52 | 1441359 John Law Lives
John Law Lives's picture

It is just a matter of time before the global R-E-S-E-T button gets pressed.  Folks like George Soros will want their place at the head table when the new rules get written.

Sun, 07/10/2011 - 12:16 | 1441394 BobPaulson
BobPaulson's picture

I agree. The new lords of the realm will make themselves known during the height of the coming financial train wreck and make "generous" offers to bail the system out and reset into the new-new-world-order where they are even more in charge than in the new world order and sovereign states are even less important than cartels and mafiosi.

So what will be the currency unit they offer as replacement?

Sun, 07/10/2011 - 12:41 | 1441445 John Law Lives
John Law Lives's picture

<<<   So what will be the currency unit they offer as replacement?   >>>

I don't know, but I am willing to bet that George Soros et. al. have their PowerPoint slides printed up and ready to inform us of the new rules once the R-E-S-E-T button gets pressed.

Sun, 07/10/2011 - 13:17 | 1441495 tip e. canoe
tip e. canoe's picture

the GLOD

Sun, 07/10/2011 - 11:51 | 1441358 Akrunner907
Akrunner907's picture

I wonder what the bar bill is at these "emergency meetings," or how much they spend on prescription meds to keep everyone stable and not wanting to commit suicide.

Sun, 07/10/2011 - 11:52 | 1441364 ebworthen
ebworthen's picture


Look on the bright side:

This European debt crisis is bullish for coin collectors.


Sun, 07/10/2011 - 11:55 | 1441369 agent default
agent default's picture

You know, one of the PIIGS might one day just say fuck you, we default and return to our national currency,setup capital controls and import tariffs and fuck off EU.  And then you will see what a real panic in Brussels looks like.

Sun, 07/10/2011 - 17:07 | 1441901 WonderDawg
WonderDawg's picture

I agree, and I think it's only a matter of time. The EU's days were numbered from the start.

Sun, 07/10/2011 - 11:57 | 1441370 ArkOmen1
ArkOmen1's picture

OMG! We've got to stop talking like this! We're endangering the recovery!

Sun, 07/10/2011 - 11:59 | 1441376 GlassHammer
GlassHammer's picture

Furiously shuffling deck chairs on the titanic

If you stay on the ship until it sinks some of you may be saved by the crew.

However, the crew will take any and all possesions you have as payment for saving you. Eventually they will convince you to sail with them on yet another titanic but this time you will be in chains for your own safety. And when the second titanic crashes, they will save a few more people to start the cycle all over again. The crew will get more and more wealth and control over passengers until there is nothing more to take. 

Sun, 07/10/2011 - 12:07 | 1441388 Ecoman11
Ecoman11's picture

You think Greeks can riot? What till you see the wops go crazy on the streets.

Sun, 07/10/2011 - 14:06 | 1441560 Piranhanoia
Piranhanoia's picture

Siciliy will be one of the first new nation states.

Sun, 07/10/2011 - 12:12 | 1441391 f16hoser
f16hoser's picture

Start printing bitch, start printing!

Sun, 07/10/2011 - 12:25 | 1441411 Ecoman11
Ecoman11's picture

You think Greeks can riot? What till you see the wops go crazy on the streets.

Sun, 07/10/2011 - 12:32 | 1441433 silver surfer
silver surfer's picture

+1 The reality hides in plain sight!

Sun, 07/10/2011 - 13:04 | 1441476 pasttense
pasttense's picture

" a senior ECB official said. "We're very worried about Italy."


With the exception of Italians, this is quite false. What these people are worried about are their banking buddies.

Sun, 07/10/2011 - 13:38 | 1441522 FeralSerf
FeralSerf's picture

Maybe he should have said: "We're very worried about our money."

Sun, 07/10/2011 - 13:16 | 1441491 SDRII
SDRII's picture

Do Italian debts spreads have anything to do with Berlusconi saying he was against the Libya war from the getgo? Wasn't it a couple of days after the Italian minister called for a immediate halt to hostilities in libya that the IEA released oil stocks - one rumor having it to supply short Euro refineries. Berlusconi is already perceived to be too close to Russia/Putin (as in Eni with its south Stream venture)..So is it really the "wolf pack?' Just saying

Sun, 07/10/2011 - 13:37 | 1441521 THE DORK OF CORK
THE DORK OF CORK's picture

The ECB has form.

It has a nasty habit of briefing against countries to service the interests of banks that hold counterfeit currency.

The true banked interests of this Tyler is showing.

CDS are a nothing - there only power over us is the free banking nature of modern CBs and particulary the ECB which gives them legitimacy.

Fiscal debt ain't debt - its goverment money.

Italy has a low private debt ratio - this smells of a setup.

The ECB is the most destructive organisation in Europe.


Sun, 07/10/2011 - 13:48 | 1441539 SDRII
SDRII's picture

Weber steps back - heading to Swissy UBS

Draghi is thrust to the fore - the Italian Job part deux

Sun, 07/10/2011 - 14:43 | 1441627 THE DORK OF CORK
THE DORK OF CORK's picture

The ECB is merely trying to destroy whats left of the nation state.

The elites of the past created the nation state and now they want to destroy it.

Its as simple as that in many ways.

This game has been played before.

Robert Louis Stevenson's Kidnapped comes to mind  - the clans slowly accepting the rise of the nation state.

Not sure how stable this free banking chaos will be however - I do not believe it has any organic nature - it is simply too synthetic to be credible.

Sun, 07/10/2011 - 13:49 | 1441540 FishHockers
FishHockers's picture

Short Prosciutto and Pancetta, Long Chef Boyardee. Back to buying American. 

Sun, 07/10/2011 - 14:04 | 1441558 Piranhanoia
Piranhanoia's picture

Only one has to say no thanks and it is reset time.  Does anyone believe a nation is going to allow another to plunder it without tanks and bombs and jingo? 

Sun, 07/10/2011 - 14:14 | 1441571 ak_khanna
ak_khanna's picture

Last year we saw countries like Greece, Ireland facing bankruptcies due to increasing deteriorating financial position and increased borrowing costs. They had to be bailed out by the ECB and IMF. These problems are likely to spread to bigger countries in 2011 and the tipping point, which is likely to happen, this year, would be when one too big to bail out country defaults on its debts. This would start a chain of defaults which all the governments and central bankers in the world put together cannot reverse pushing the world economy on an extended path of slow or negative growth for years.

Sun, 07/10/2011 - 14:31 | 1441600 bill1102inf
bill1102inf's picture

WHat happens when the reset button gets pushed here?? And you wake up and find that each OZ of gold that you own is worth $300.00 in the new blue currency, and the prices for everything else are pretty much the same?

Sun, 07/10/2011 - 14:44 | 1441629 equity_momo
equity_momo's picture

How do we reset , ie wipe away all the debt , with a new "currency" that values stuff at the same relative prices they are valued at now with gold at 300? Impossible.

The dollar is backed by oil and we need to print dollars to maintain that hegemony , ergo devalue the dollar relative to oil and therefore gold.

If the USSA Empire collapsed tomorrow , there would be no USD backed by oil , therefore oil producing nations would seek to fill the vacuum with something. That something is going to be attached to gold as there simply isnt another fiat alternative currently. And if someone wants to create one , it will require alot of gold or alot of miltiary power to cement it.

Sun, 07/10/2011 - 15:32 | 1441726 CrashisOptimistic
CrashisOptimistic's picture

That's just absurd.  A world of 7 Billion is too many to worry about shiny metal.  

If gold is ever a threat to the system, it will not be confiscated.  It will simply become illegal to traffick in it, just as with drugs.

You'll have no price quotes, and anyone who offers to buy or sell could be a narc.  Civilization has no need for it so it won't be like drugs.  Its value will be zero.  That would be the value of anything that cannot be trafficked legally and for which there is no need.

Sun, 07/10/2011 - 16:06 | 1441783 bill1102inf
bill1102inf's picture

Gold will be 'collected' in exchange for a VERY SMALL amount of new dollars and sent to where it is NEEDED (in chip manufacturing).  With a release of 1:10 new dollar for every old dollar, the fed will be able to print literally for the next 100 years without even HAVING to incur any 'debt'.  Similar but different to what has happened over the last 50 years+. BTW, Oil will be $10 and gasoline $.40.  No one will care, except who we owe dollars to, but at the end of the day they will not care either.  Either take the new money, or don't. Most will take it, then shortly after, all will take it. Done, fixed. 

Sun, 07/10/2011 - 16:07 | 1441787 Non Passaran
Non Passaran's picture

The scenario you describe is absurd.
If gold became illegal in any one country, it would flow out of it to countries in which it is legal.

Sun, 07/10/2011 - 17:42 | 1441971 equity_momo
equity_momo's picture


Its a shame the 2 posters above you have ignored 5000 years of human civilization.

Brainwashed by the MSM it seems.

Sun, 07/10/2011 - 14:50 | 1441635 Monedas
Monedas's picture

John "Bean Fart" Boehner is a "Sentimental Traitor" ! He cries, he gushes, he emotes, he gets warm and fuzzy with the enemy.......then he fucks the people he's supposed to represent every fucking time ! He is a Sentimental Journey Joke on a broken record ! Monedas 2011 Why do these loser jerks always end up in the Republican Party? They love becomes them ! 

Sun, 07/10/2011 - 15:36 | 1441734 Saxxon
Saxxon's picture

Well, Monedas you are correct in that the Republican Party has no chance whatsoever in 2012.  None.  You can start banking on BHO for four more years.  BHO has all the angles covered and the Republicans can only pound the windows from outside and wave flags and bibles.  There will be no Austerity and no Deflation because neither policy wins elections in this America.

Sun, 07/10/2011 - 16:16 | 1441796 Buck Johnson
Buck Johnson's picture

It's all finally coming apart, and they can't figure out how to fix it without pain.

Sun, 07/10/2011 - 16:54 | 1441871 BlackholeDivestment
BlackholeDivestment's picture

...still can't stop laughing from the opening line ''suddenly found itself shock, shocked'' ...ROTF.

...uh, hey uh, well uh, let's ah build da electric fence ah and piss on it ah.

Seriously, Government Motors or the Italian Ferrai Testosterosa, it matters not, wheez'n the juice shrinks yer balls and the next generation strikes out. Tis so Joe. 

...PIIGS, talk about the ultimate financial Swine Flu, mixed with the New World Order Chairsatan encephalitic Beltway Bird Brains and the 911 Jets. PIIGS really do fly and the snowball has more than a chance, Hell is frozen over.

Sun, 07/10/2011 - 17:18 | 1441917 Highrev
Highrev's picture

There Is Always Somebody Worse Off Than You, Or Is There?

Sun, 07/10/2011 - 17:21 | 1441928 Jovil
Jovil's picture

Check out how assets stack up agains gold and other PMs

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