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Italy Succeeds Placing 1 Year Bill As ECB, China Buying Bonds In Secondary Market

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Tue, 07/12/2011 - 07:06 | 1447081 Broomer
Broomer's picture

Advice to Italians: get long 500 lire silver coins.

Tue, 07/12/2011 - 09:13 | 1447349 Gandalf6900
Gandalf6900's picture


hahaha I still have them from the pre 2000 era

Tue, 07/12/2011 - 10:45 | 1447657 Durchbruch
Durchbruch's picture

this morning I was in a small italian bank in a small village, and there were lay people - Average Joes - buying hundreds thousand euro of banks stocks. 

Tue, 07/12/2011 - 07:06 | 1447082 Josephine29
Josephine29's picture

The problem with the European Central Bank firing up its Securities Markets Programme is that it spent 77 billion Euros last time and even then things got worse... As for Italy this analysis explains her basic problem.

The Italian problem


If we go back to the inception of the Euro it was Italy that was always expected to be the problem child. This problem was often expressed by describing Italy as a high debt-low (economic) growth economy which if you think about it had the implication that sooner or later the growth would prove insufficient to support the debt. If Italy was a boat it would be one with a high waterline prone to being swamped by waves.


If we break that relationship down and just start with the debt side of the argument we see that the gross Italian national debt is nearly 120% of its economic output as expressed by its Gross Domestic Product. The benchmark for a country which has issues in this area is usually considered to be 100% so, as I replied to a comment over the weekend, the surprise is not that Italy is under pressure now but that it has not happened before.


Also the debt has arisen because Italy’s government has simply spent a lot more than it has received in taxes. Before you point out I am stating the obvious what I mean by this is that there has been no specific cause such as a housing crisis (Spain and Ireland) or bank blow-up (Ireland) but a generic one of over-spending. If there is a similarity to the countries in trouble right now it is with Greece’s inability to fully collect its taxes as Italy has issues too in that area.



Tue, 07/12/2011 - 07:11 | 1447091 Broomer
Broomer's picture

Italian national debt is nearly 120% of its economic output as expressed by its Gross Domestic Product. The benchmark for a country which has issues in this area is usually considered to be 100% so, as I replied to a comment over the weekend, the surprise is not that Italy is under pressure now but that it has not happened before.

Well, they have a lot of gold. Now that they no longer control their money, their gold is in line for confiscation.

Tue, 07/12/2011 - 07:19 | 1447099 Sudden Debt
Sudden Debt's picture

whenever the 10yr goes over 5% it's over.

It's at 5.733%...


European authorities need urgently to increase the size of resources available to indebted European countries faced with liquidity problems if they want to avert disaster

Why not just burn the money and get it over with?


Tue, 07/12/2011 - 07:24 | 1447114 Cheeky Bastard
Cheeky Bastard's picture


Tue, 07/12/2011 - 07:26 | 1447118 Sudden Debt
Sudden Debt's picture

6%? sure?

I'll come back tomorrow.


Tue, 07/12/2011 - 07:46 | 1447152 Cheeky Bastard
Cheeky Bastard's picture

yes, i'm sure.

Tue, 07/12/2011 - 07:31 | 1447105 Ghordius
Ghordius's picture

This month is only a warmup.

30bn in August, 60bn in September.

Once (oh, in ZH I'm supposed to say IF) this is rolled over the "Italian Crisis" is over for a while...

Sudden Debt, what if in a few years 8% for a 10y looks "normal"? ;-)

Tue, 07/12/2011 - 07:07 | 1447084 ZeroPower
ZeroPower's picture

"We have time on Greece. The next tranche is due in September," German Finance Minister Wolfgang Schaeuble told Deutschlandfunk radio.

Was good for the boost back above 1.39 his morning. lol.

Tue, 07/12/2011 - 07:20 | 1447106 Oh regional Indian
Oh regional Indian's picture

And also does a great, perceptual can-kick ZeroP/

Italy is off the table till Spetember.

Now let's all watch Spain as it first bankrupts South America, starting with Argentina, via Santandar.... then folds at home! And all this is probably weeks away.

As is September. What a show!




Tue, 07/12/2011 - 07:15 | 1447090 Sudden Debt
Sudden Debt's picture



50$ for a front row seat*

40$ for a back row seat*

6000$ for a seat in the Italian loge*

500$ for a ticket to LaLaLand


*no payments in euro's are accepted due to technical difficulties with the payment terminals.


Tue, 07/12/2011 - 07:11 | 1447093 PaperBear
PaperBear's picture

Silver get whacked again down to $34.79/oz from $35.97/oz.

Keep stacking the physical silver, this is only the paper price.

Tue, 07/12/2011 - 07:14 | 1447095 Sudden Debt
Sudden Debt's picture

In Europe, silver is up 1 euro.


Tue, 07/12/2011 - 07:17 | 1447097 Zero Govt
Zero Govt's picture

the ECB buying Bonds in the secondary market could not be construed as a bailout because that's illegal under the EU Constitution

..and indeed we've had no Euro-bailouts because it is illegal under the EU Constitution

Glad we're crystal clear that nothing illegal is going on (Govts cooking books, exceeding their EU committed deficit to GDP ratios and illegal bailouts aside) ...it's looking good here in the Euro-Crime Zone

Tue, 07/12/2011 - 07:22 | 1447111 Sudden Debt
Sudden Debt's picture

I have to appear in court next week because I drove 164km where 120km was allowed.

the justice system works...



Tue, 07/12/2011 - 07:31 | 1447123 Zero Govt
Zero Govt's picture

are you referring to Spains new "save fuel" lower motorway limits?

F1 driver Alonso said people would "fall asleep"... we buy petrol out of our own pockets and can presumably burn it how we see fit.. the capacity of politicians to patronise, mangle and talk undiluted crap is limitless ...Spains traffic management is the worst in Europe, control-freak fascism-Marxism

Tue, 07/12/2011 - 07:36 | 1447134 Sudden Debt
Sudden Debt's picture

You can never claim to be the worst in Europe...

Whenever you think you're the worst, there always jumps out of a box who is 10 X more worse.


Tue, 07/12/2011 - 07:25 | 1447117 Oh regional Indian
Oh regional Indian's picture

And don't forget that the hand of God is behind italy.

The Vatican will back-stop and string pull and fund raise for Italy. They cannot watch their own festering house of "God" get harmed can they?

Whack whack. And to think a few of Gaddafi's agent provocateur's are in the EU right now.

Not pretty thoughts or times.

Tue, 07/12/2011 - 07:35 | 1447130 Ghordius
Ghordius's picture

ISDA Stupidity? ISDA Stupidity?? ISDA Stupidity!

Come on! The whole concept behind those derivatives is deficient! Sorry, I would outlaw every product on their list...

Tue, 07/12/2011 - 07:39 | 1447139 YHC-FTSE
YHC-FTSE's picture

Perhaps my gin and pimms soaked grey matter is too addled during our short Summer to properly engage with the problems of ponzi economics, but WTF? Looking at the convoluted debt dance around the PIIGS maypole, one has to wonder where the hell did the Italians spend 120% of their GDP? I haven't seen any grand engineering projects, new investments in industry, or social engineering strategies to improve the average Italian life. Where the hell did it all go? Surely Burlosconi's teen prostitutes cost no more than a couple of grand a pop. 


(Talking of prostitutes, what's with the constant elitemeeting adverts on ZH? It's a bit downmarket and you would have to be mad to sign up with a dating agency that positively encourages gold diggers.)


Anyway, it's a global game of musical chairs where the winner ends up holding the bag of worthless debt while everyone defaults. The whole thing is so crazy, the old Monty Python team should make a film about it.

Tue, 07/12/2011 - 07:57 | 1447175 papaswamp
papaswamp's picture

3.6% for a 1 yr?! wowza....Germans are going to be pissed when they are the ones that will have to pay that off. No way the Italians will have the ching.

Tue, 07/12/2011 - 08:12 | 1447202 oogs66
oogs66's picture

saved by the ECB and China? 

Tue, 07/12/2011 - 09:18 | 1447378 Gandalf6900
Gandalf6900's picture


pasta anyone?!?!

Tue, 07/12/2011 - 10:03 | 1447550 steve from virginia
steve from virginia's picture

Tyler, you left out the, 'from the 'Throwing good euros after bad' department' part.

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