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The "Blacklist" - Ten Italian Cities On Verge Of Financial Collapse

Tyler Durden's picture




 

Last week when we wrote about the imminent default of Sicily which Mario Monti tried to sweep under the rug by demanding the local governor resign for not masking the situation with lies, and doing all he can to prevent the advent of reality, we noted, rather sarcastically, that the "resignation of Sicily Governor Lombardo will somehow allow all those who care about the fundamentals of Italy to stick their heads in the sand... at least until Sicily is followed by Calabria, Campania, Lazio, Abruzzo, Tuscany, Lombardy, Umbria, Liguria, Veneto and so on. At least the governors of those respective provinces now have an advance warning what the endgame is." Sure enough, now that this particular floodgate has also been opened, it is only fitting that in the aftermath of this weekend's main news that a total of 6 Spanish regions will demand bailouts, that Italy follow suit with its own blacklist, and as La Stampa has reported, there are now ten major Italian cities at risk of an imminent financial collapse, yet another factor pushing Italian yields well on their way to the country's own 7% rubicon, now at 6.34%.

From La Stampa, google translated:

There are ten major Italian cities with more than 50 000 inhabitants, who are a step away from the crash.

 

Naples and Palermo at the top of the "black list", although a task force for weeks at Palazzo Chigi is doing everything possible to avoid the worst.

 

Then Reggio Calabria, finished in red already in 2007-2008 and is now being investigated by the judiciary. And then so many other governments, large and small (like Milazzo), perhaps far virtuous, could be forced to ask for the "collapse", which means dissolution

of the council, entrance of the Court of Auditors and prefectural commissioner.

 

The last shot, or if you want the coup de grace, it is to come: it is a provision inserted in the decree on the spending review that in the folds of the new rules that impose the "harmonization of accounting systems and financial statements" requires to devalue the 25% of the residual assets accumulated to date. These revenues accounted for but not yet cashed, as may be the proceeds of fines and waste tax.

 

Key figures, which serve to "make" the budget of an institution that often, in practice, these voices swells while knowing they will not be able to collect 100% of the amounts to be budgeted. Proceeds often very short questions, which now can no longer serve to make ends meet.

 

"At risk are at least a dozen large cities' trust in the government technicians who are monitoring the situation.

 

"The situation is becoming more difficult every day," confirms the president of ANCI Graziano Del Rio. Pointing the finger at yet another cut in transfers, against the measures introduced by the spending review, and that raises the alarm of many fellow mayors. "

Because he who defaults first, always defaults best... and first.

 

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Mon, 07/23/2012 - 07:29 | 2641852 GetZeeGold
GetZeeGold's picture

 

 

Oh good.......we're past Greece and Spain......and we're on to Italy.

 

NEXT!

 

Mon, 07/23/2012 - 07:46 | 2641891 Gief Gold Plox
Gief Gold Plox's picture

Don't worry too much about Italy. They'll shut everything down for Ferragosto in just over a week. After all, what could possibly go wrong?

Mon, 07/23/2012 - 07:57 | 2641911 francis_sawyer
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Tutti a spiaggia!

Mon, 07/23/2012 - 08:28 | 2641957 Badabing
Badabing's picture

Isn’t it amazing how TPTB now break the pigss countries into smaller groups like provinces or cities, and want to bail out one at a time as if its not a default of a country.

They will do anything to not have a default!

FUCKING BANKS!   CAZZO DI BANCHIERI!

Mon, 07/23/2012 - 09:24 | 2642200 Joe Sixpack
Joe Sixpack's picture

Things are starting to happen faster and furiouser.

Mon, 07/23/2012 - 07:32 | 2641856 The Swedish Chef
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Only ten? 

Mon, 07/23/2012 - 08:12 | 2641886 GetZeeGold
GetZeeGold's picture

 

 

Probably more.....but we only have the 10 fingers to count on.

 

Mon, 07/23/2012 - 07:33 | 2641859 TrainWreck1
TrainWreck1's picture

he who defaults first gets bailed out first.

them who wait will get nuttin.

at some point we may see a default rush, before Germany et all are tapped out

Mon, 07/23/2012 - 07:33 | 2641860 fonzannoon
fonzannoon's picture

When Compton Italy goes I will start paying attention.

Mon, 07/23/2012 - 08:02 | 2641925 SheepRevolution
SheepRevolution's picture

Italy goes Compton.

Now there's what I call HQ-entertainment.

Mon, 07/23/2012 - 08:37 | 2642016 Uncle Remus
Uncle Remus's picture

Soooo, what goes on in Compton doesn't stay in Compton.

Mon, 07/23/2012 - 07:33 | 2641862 legal eagle
legal eagle's picture

Geez, I know a place where 50 states are on the verge, and the underlying cities, and municipalities, and ALL of their pensions "poof" up in smoke......

Mon, 07/23/2012 - 07:38 | 2641871 GetZeeGold
GetZeeGold's picture

 

 

Shhhh.....we're not reporting that just yet.

 

The official line is peaches and cream......just don't look around you.

 

Mon, 07/23/2012 - 07:40 | 2641873 TrainWreck1
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We are seeing the cancer of government finally killing their hosts.

 

Mon, 07/23/2012 - 07:35 | 2641867 JenkinsLane
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Here's a novel idea for cities, regions, states, etc., in fiscal trouble - Why not stop spending money you don't fucking have?

That way, you don't have to worry about bankrupcy.

Mon, 07/23/2012 - 07:56 | 2641875 GetZeeGold
GetZeeGold's picture

 

 

Politicize it and threaten to fire the police and firemen........but don't touch the $100 million expansion to the crap park no one is interested in going to.

 

Oh geez.....I almost forgot the teachers......if you want a freakfest....just bring up the teachers.

 

Mon, 07/23/2012 - 07:46 | 2641890 malikai
malikai's picture

Uh, how do you buy votes then?

Mon, 07/23/2012 - 08:08 | 2641935 Catullus
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The cities are in arrears.

So question: As a business, Why continue to give these cities goods and services when you know they can't pay you?

That's the source of the desparation at this point -- they can't even spend money they don't have at this point.  Their "credit" market is freezing up as they don't settle their arrears.

Mon, 07/23/2012 - 11:12 | 2642630 blunderdog
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If you're a business that depends on government money, it may be either keep providing services and hoping to get paid or just close down immediately.

Mon, 07/23/2012 - 13:37 | 2643170 MarsInScorpio
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Blunderdog, there are two other scenarios for a business that depends on government for either its existence, or a significant part of it, as mine does. One I do, the second others who don't mind going to jail do.

 

1) You smooze the heck out of those gatekeepers who control when the checks are written, and to whom. For example, I submitted an invoice due August 15. I got the check today, waaaay ahead of others standing in line.

 

By smoozing, I mean taking an interest in hearing their stories, being there to sympathize with their problems, learning when they or family are having a birthday, anniversary, how the kids are doing in school . . . you get the drift. Now you're not just a vendor, you are a friend. And friends out look for friends.

 

The reality of government spending is this: It's not that they don't have money; it's that they don't have enough to live the way they used to live back before everyone was going to get rich working for themselves. It's where you are in line that matters.

 

2) Which I don't do, you pay bribes.

 

Government is still a main source of revenue. In fact, for many communities, it is the leading source since getting contracts with major entities such as hospitals, mega-corps, and such go to tier-one national firms.

 

But back to governments and survival, I sometimes think too many ZHers lose track that these are humans who are trying just a hard as the rest of us to survive.

 

And I also think there are too many ZHers who are jealous that government employees have been able to pull down the wages and pensions that they get. I see envy rear its ugly head far too often around here.

 

America is a very angry place these days as the dreams we had of what our winter of life would look like turn into nightmares. People know they are getting screwed by the banksters, the Wall Street criminals, the mega-corps and the Hyper Rich - even if they lack the ZHers' understanding of the mechanics of it all.

 

Now let me toss a bomb into the midst of all you ZHers filled with hate and loathing for the unions: Have you noticed that there is a correlation between the demise of unions and the demise of the Middle Class?

 

Face it, TPTB don't want any organized resistance - and unions have always been the organized resistance they fear most. That's why breaking the unions is way up the list of Status Quo objectives.

 

I realize many here will go ballistic about supporting the idea that unions are the reason America had a Middle Class. But since their decline, we have employers who have taken away every benefit they can get their hands on. That is why we are becoming the temp employment culture - because temps don't get squit.

 

I can also remember when this shift to non-employees began; everyone was going to make it by setting up their at-home office (SOHO anyone?). Well, you see how that worked out. It was nothing but a scam by TPTB to shut off benefits, and drive wages down to the lowest possible bid.

 

So for those anti-unionists out there - how's that non-union cultural working out for you? The economy is dropping like a rock because consumption is dropping like a rock - first. People don't have any money because they have no collective organization to keep wages and benefits high.

 

In short, the anti-anti-unionists are being hoisted on their own petard . . .

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Mon, 07/23/2012 - 13:53 | 2643225 blunderdog
blunderdog's picture

I'm largely in agreement with you, but the fundamental "problems" we have to solve here can't even be DISCUSSED in any kind of public forum.

In my view, there's one major issue: the dole has to end.  The government cannot remain the sole source of survival for hundreds of millions of individuals and millions of businesses.

I've always favored unions--if corporations can bargain collectively, the only way any negotiation can be at all fair is if the employees can as well--but many unions today are the same sort of "do-nothing" businesses that just collect employees' money for nothing.

Thing is, given that there is not one single politician (or even charismatic populist demogogue, heh) who is talking about cutting Medicare and/or SocSec, you can be dead-certain this ain't gonna change any time soon.

Mon, 07/23/2012 - 07:44 | 2641883 Gmpx
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What Businessinsider's sake collapse? Lira will return and Italy will live happily ever after remembering crazy EUR experiment with jokes. Collapse is when land becomes contaminated with radiation like in Japan. In Italy, collapse is impossible.

Mon, 07/23/2012 - 07:46 | 2641889 Peter Pan
Peter Pan's picture

They say that for every letter of complaint received by a business, there are at least another twenty complainants. So by my reckoning there at least 200 Italian cities in trouble.

Any Italan politician willing to bet against me?

Mon, 07/23/2012 - 08:01 | 2641922 A Man without Q...
A Man without Qualities's picture

It's not just Italy, it's a global phenomenum.  I was reading recently that in San Franscisco, the average pension for retired public employees ($34k) is higher than the average private sector income ($32k)...

Mon, 07/23/2012 - 07:51 | 2641897 PoorByChoice
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"Mario Monti tried to sweep under the rug by demanding the local governor resign"

You know it's the end when they are shooting their own messengers

 

The Telegraph reports there is still very strong demand for privately owned island hideouts for the super rich:

http://www.telegraph.co.uk/finance/financialcrisis/9418701/Super-rich-shell-out-for-island-paradise.html

Why am I not surprised....  Wonder if Monti's in there bidding high on a spot in the USVI?.....

 

Mon, 07/23/2012 - 07:55 | 2641898 francis_sawyer
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Reggio Calabria has been financially collapsed since even before fiat...

Napoli hasn't partied since Maradona left...

& Palermo... Well, last day they celebrated was when Patton rolled into town

~~~

Note to tourists: You drive the AutoStrade south of Lazio at your own risk...

Mon, 07/23/2012 - 07:52 | 2641900 razorthin
razorthin's picture

But I keep seeing pics of relatives on FB, boozing it up and enjoying their second month of vacation on the beach in Catania.

Merda!

Mon, 07/23/2012 - 07:54 | 2641907 A Man without Q...
A Man without Qualities's picture

I wonder how many of these have been using swaps to create off balance sheet borrowing?

Mon, 07/23/2012 - 08:04 | 2641931 Ivanovich
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Hey, is it just me or does Italy actually resemble a boot that is kicking at Sicily??

Mon, 07/23/2012 - 08:08 | 2641937 Randy Goodnight
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I spent a month in Sicily last year and spoke with a few locals in variety of towns about the economic "crisi".  They just chuckle and refer to their history, having been ruled by just about everyone throughout the ages.  Greeks, Normans, Arabs .. . . People there just know how to survive anything.  Most have some type of small business, network for barter, grow a garden and pull fish from the sea. We Americans are not so prepared for what will eventually hit us.    

Mon, 07/23/2012 - 08:12 | 2641942 silverdragon
silverdragon's picture

Gut govt and throw them in jail if they spend more than they take in.

Mon, 07/23/2012 - 08:35 | 2641954 spanish inquisition
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Things must be getting serious in Italy, the link article just had words and and a picture of a building. I was expecting ladies from each city pictured in states of undress based upon the severity of their finances.

Mon, 07/23/2012 - 08:35 | 2642008 falak pema
falak pema's picture

let them eat pasta! and live off tourism. 

Its time for the hot money to come back to Italy. The italians should stage the GIRO next year in Swiss land and in the process just take over all the Swiss banks. Then repatriate all hot money back to Italy.

That should solve ALL the problems. 2T euros of hot money with a one off 60% fine and Italy is home and dry.

1.2 T bonanza!

Free pasta for all of Italy and Bunga Bunga in prison for the Oligarchs; by Congolese inmates with king kong's appendix. 

Free tickets in the Coliseum for that binge! Watch the Oligarchs impaled to the black shard of Roman delights.

My poetic justice and subsequent monetary liberation is the best pizza combination in town. 

Fri, 09/21/2012 - 06:38 | 2817146 Ar-Pharazôn
Ar-Pharazôn's picture

you're not even funny.

 

they bring here in Switzerland their money for a reason. that reason it's called taxation.

 

certain business are forced to pay up to 65% in taxation. and they are moving here in Switzerland those business.

 

try another time

Mon, 07/23/2012 - 08:55 | 2642089 Bahamas
Bahamas's picture

Since all the wealth in the world is expressed in fiat monetary units, which are nothing but debt, everybody is liable to be dubbed insolvent anytime, just whenever the NWO agenda thinks it opportune.

Mon, 07/23/2012 - 09:04 | 2642113 THE DORK OF CORK
THE DORK OF CORK's picture

The massive decline of oil consumption in Italy .... now 15% YoY is screaming something very dramatic happening in Italy.

omrpublic.iea.org/demand/it_tp_ov.pdf 

 

Diesel consumption is diving even further (Diesel consumption is a very good indicator of commerce & fixed capital formation)

omrpublic.iea.org/demand/it_dl_ov.pdf
Mon, 07/23/2012 - 09:06 | 2642114 THE DORK OF CORK
THE DORK OF CORK's picture

Double post

Mon, 07/23/2012 - 09:54 | 2642285 marathonman
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Having not been to Italy yet, where should I look to shop for property once the inevitable ensues and Italy goes on sale?

Mon, 07/23/2012 - 10:21 | 2642406 Bahamas
Bahamas's picture

Depends of what you like: if you like mountains and skiing, find something in the dolomites area.eg Corvara. If you prefere the seaside, Italy is not only a peninsula, but also has many islands, small and big. But if you like something that looks like any other Big city go to Milan.

Mon, 07/23/2012 - 10:49 | 2642527 Chaos_Theory
Chaos_Theory's picture

Lago di Garda.  It is heaven on Earth.  Sirmione is a wonderful walled medieval city at the South end of the lake.  Less than 45-minutes to Verona, 1-2 hrs to Venice, or world-class skiing in Cortina, 4-5 hrs to the West you have places like Genova, Cinqueterra, Milano, Torrino, and the French Riviera/Monaco.  It's in the North of Italy, so more industrious and less corrupt than the South. 

Mon, 07/23/2012 - 11:51 | 2642795 Bam_Man
Bam_Man's picture

I am partial to Tuscany and Umbria myself. Especially the less "touristy" bits. Gubbio is one of the most breathtakingly beautiful towns you will ever ever visit. While there, stay at the Relais Ducale, a restored 14th century Duke's palace.

Mon, 07/23/2012 - 10:01 | 2642307 Will To Live
Will To Live's picture

I will scope it out for you.

Mon, 07/23/2012 - 10:28 | 2642438 paulie
paulie's picture

Do you know why they are attacking Sicily ?

Sicily has a special ruling whereby it's granted political autonomy to a point where they can print their own money. It's written in their autonomy constitution.

That could be an example other countries may want to follow and, in the eyes of the banksters, it's a potential danger that must be shut down immediately hence they blame its debt.

Mon, 07/23/2012 - 10:53 | 2642541 Bahamas
Bahamas's picture

They are attacking Sicily because this is a region with special authonomy. It could issue its own currency if it wanted. A local government issued currency free of the ECB load of debt. A mondialist like Monti, wants to take these special rights away from Sicily, thererfore the attack.

Mon, 07/23/2012 - 10:45 | 2642503 Grand Supercycle
Grand Supercycle's picture

SPX bearish weekly chart strengthens: an important development.

As mentioned on Friday, SPX downleg continues.

Useful SPX weekly chart at blog.

http://www.zerohedge.com/news/2012-12-24/market-analysis

Mon, 07/23/2012 - 12:38 | 2642965 MarsInScorpio
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Everyone has been saying since the advent of the Greek crisis that Spain, and then Italy would follow.

 

It's all priced in . . .

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