With Italy's stock market down almost 9% (and falling again today), and Italian bond yields surging (2Y +35bps to 1.67%) in the last two weeks, it truly seems as though the two scariest words in global investing are not 'Iran-Israel', or 'Federal Reserve', but 'Silvio Berlusconi'. With the polls blacked out now until the election in just under two weeks, the posturing has begun and the media mogul is not backing down. As ANSA.It reports, Berlusconi has proclaimed "I believe that we have overtaken them... they are now (trailing) behind us," as we have been noting the convergence of the two parties poll results recently.
Of course, he is still the lecherous old bastard he always was - which seems only to endear him to the Italian people (oh, and his promise of bread and circuses for all) - as ANSA notes, he is defending himself on Sunday, after Berlusconi asked a female solar power technician during a company visit if she made house calls, if she "comes to homes" and how many times she is willing "to come". Is debauchery the opposite of austerity? Never mind, the key for now is psychological as the opposition sparring will need to begin to avoid the "don't vote for the loser" bias.