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Summarizing Italy's Catastrophic Predicament In 15 Simple Bullet Points

Tyler Durden's picture


The irony about the blow up over the past month in "all things Italian" is that the facts about its sovereign debt and viability profile have always been available for anyone to not only see, but make the conclusion that the situation is unsustainable. The fact that so few dared to do so only confirms that affirmative confirmation bias that dominates within 99% of the investing population. Sites such as Zero Hedge and others had been warning for over a year that the Italian "contagion" (which is a misnomer: Italy's lack of viability is perfectly-self contained: it does not need Greece or Portugal to blow up, and can do so perfectly well on its own, but the punditry certainly needs a scapegoat, in this case the incremental layering of "revelations" about how insolvent Europe is) and we have long presented primary source data confirming just how precarious the house of cards is not only in Italy but everywhere else too. Regardless, no matter how conventional wisdom got to the big picture revelation of just how ugly Italy's reality is (and don't think for a minute that Spain is any better) the truth is that the cat is not only out of the bag, but is widely rampaging through the china store (no pun intended), high on speed and methadone. So for everyone who still wishes to know why the Italian jobs is very much hopeless absent the ECB stepping in an bailout out the country, below is a succinct list of 15 bullet points courtesy of The Telegraph, which explains all there is to know about the country's current predicament. In retrospect we certainly can not blame Tremonti for wanting to get the hell out of there.

The truth about Italy:

  • Morgan Stanley estimates net issuance should total 35 billion euros per year in 2012-2013, less than expect annual coupon payments of around €45 billion per year
  • A total of €157 billion in Italian government paper will fall due by the end of the year. Redemptions will peak in September, when €46 billion of BTP CTX bonds mature
  • Italy has raised €277.4 billion euros in debt so far in 2011, or 65.3% of its full-year target, the Treasury said - suggesting further issuance of €147.4 billion, according to Reuters calculations
  • Italy's public debt stood at €1,890 billion at the end of April, according to Bank of Italy figures. The public debt figure includes postal savings
  • Italian government bonds and short-term bills totaled €1,583 billion at the end of June according to Italian Treasury data. Their average term was 7.09 years
  • A one percentage point increase in Italy's debt yields adds about €3 billion euros to interest payments in the first year, and twice that in the second, the Bank of Italy has said
  • Italy forecast in April that 2011 debt servicing costs would total 4.8% of GDP, or about €77 billion
  • The International Monetary Fund estimated in April that 47% of Italian 2010 government debt was held abroad. Morgan Stanley last week estimated foreign holdings at 44%
  • Banks domiciled in Italy held €192 billion in Italian government securities at the end of May, Bank of Italy data showed last month. In the first quarter of 2011 they also held €589 billion euros in government securities on behalf of their clients
  • European Banking Authority data showed in July that Italy's five lending retail banks had a net direct exposure to Italian sovereign debt of €159 billion. Intesa Sanpaolo is the most exposed with €57.6 billion, followed by UniCredit with €47.5 billion
  • Morgan Stanley said domestic banks and insurance companies could quite easily buy net €60 billion a year in Italian government debt for the next few years
  • JP Morgan analysis said Italian banks will have to refinance €53 billion of maturing bonds in wholesale markets next year
  • The €600 billion Italian pension fund and insurance industry has increased its holdings of domestic government bonds by 10% in the last three years to 32% of assets, according to JP Morgan
  • Analysts estimate that an increase in the average cost of Italian public debt drives a similar rise in the cost of banks' bond issues
  • JP Morgan and Morgan Stanley analysts estimate Italian banks' holdings of government bonds at around 6% of their assets - a higher figure than 5% for Spanish banks and second only within the euro zone to Greek banks' 10%

Source: Telegraph


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Thu, 08/04/2011 - 18:12 | 1524894 Careless Whisper
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bullet point 16:

* Jersey Shore season 4


Thu, 08/04/2011 - 21:36 | 1525291 disabledvet
Sat, 08/06/2011 - 11:13 | 1530348 HCSKnight
HCSKnight's picture

Sardonic sagacity.  Well played sir.

Sat, 08/06/2011 - 11:12 | 1530349 HCSKnight
HCSKnight's picture

Sardonic sagacity.  Well played sir.

Thu, 08/04/2011 - 18:12 | 1524896 FinalCollapse
FinalCollapse's picture

In 2011, they planned to issue debt of around 360B euros, which is $500B ??? Since their GDP is around $2T, this means that they planned issuance of 25% of their GDP. If this is true, they are fucked royally, and their debt/GDP ratio goes to moon, and they can join Greece on the beach.

Thu, 08/04/2011 - 18:17 | 1524903 gratefultraveller
gratefultraveller's picture

Texted my son living in Italy to draw down as much cash as he could from his account at the local coop bank, both before and after midnight, just in case - with the low interest the banks pay on cash deposits it doesn't make any difference if you keep the money at home anyhow. Better safe then sorry...

Thu, 08/04/2011 - 18:19 | 1524911 Row Well Number 41
Row Well Number 41's picture

What happens when you drive a Fiat into a brick wall?


Thu, 08/04/2011 - 19:58 | 1525052 New_Meat
New_Meat's picture

Never could figure out how to start mine.  - Ned

Thu, 08/04/2011 - 21:08 | 1525221 Floordawg
Floordawg's picture

Fuckin' Italian Atempt at Transportation!

Thu, 08/04/2011 - 23:31 | 1525568 ViewfromUnderth...
ViewfromUndertheBridge's picture

Fix It Again Tony...

Loved 'em...Bambino 500 w/sunroof, 128 w/ sandbag in front (still went off the road twice in front wheel skids), then Alfas x 3..."itsa sleevas again" headgaskets galore!

and my Jeep Liberty engine blew at 48,000mi...I think it's me.

Merc. No more.

Thu, 08/04/2011 - 18:17 | 1524912 buzzsaw99
buzzsaw99's picture

There may be a few who don't want to roll their IT-bills this fall. lulz

Thu, 08/04/2011 - 18:25 | 1524918 CrashisOptimistic
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Additional bullet point:

Country has a history of suicidally backstabbing the only source of oil that its refineries can handle.

Fri, 08/05/2011 - 03:01 | 1525865 Ghordius
Ghordius's picture

Of all the slanted views - this is the worst! Hey, so Italy is singlehandedly "suicidally backstabbing the only source of oil..." - hello? Who is having a small little bombing party in Africa?

Blood is in the water, the big boyz are circling the whale - TBTF Banks show their Killer Whale face. But it is not over. This is just the start and I'm not so sure as ZH about how it is going to end.

Those mountains of italian Debt are concentrated in Italy and France - the TBTF "reverse marketing" is a CDS operation which could just go the other way.

The truth is that the TBTF banks have received additional liquidity for their casino and they are betting on everything to just fix their balance sheets and build up their beloved bonuses. This is a sideshow which could just dry up. Wait for ZH articles about how the European Sovereigns "fight back with dirty, unfair and unconventional means". :-)

Fri, 08/05/2011 - 02:48 | 1525874 Ghordius
Ghordius's picture

Additional "bullet point": Italy has a balanced budged and is mired for austerity - which is a "dirty word" for bankster, I know. Still, it's a good oldfashioned sign for a debtor.

Thu, 08/04/2011 - 18:26 | 1524921 walküre
walküre's picture

Bank Run rumors are silly.

Everyone knows that banks are closed now in Italy.

Tomorrow is a holiday in Italy. The holy day of the debt free virgin or something.

Thu, 08/04/2011 - 19:50 | 1525046 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Run little boys! The priest will have the day off.

Thu, 08/04/2011 - 21:48 | 1525324 Terminus C
Terminus C's picture

Bank machines bitchez!

Fri, 08/05/2011 - 00:12 | 1525679 scratch_and_sniff
scratch_and_sniff's picture

I dont know about a holiday, but there will be a few prayers said today for sure.

Thu, 08/04/2011 - 18:34 | 1524935 bogbrush
bogbrush's picture

Methadrine would be preferable to Methadone if you were planning on rampage (or any kind of activity actually...)

Thu, 08/04/2011 - 18:33 | 1524939 janus
janus's picture






Thu, 08/04/2011 - 18:44 | 1524955 janus
janus's picture

Mr. Durden,

I'm not shittin you.  At the opening of the NBC evening news, just now, they plastered your avatar right smack-dab in the middle of the screen for quite a bit.  You just went big time, chief...or should we say that the old kings are tipping the hat to the new?

I salute you, my liege.

oh when the saints/

come marchin in/

oh when the saints come marchin in/

oh i want to be in that number/

when the saints come marchin in,


Thu, 08/04/2011 - 19:10 | 1524995 Careless Whisper
Careless Whisper's picture

Why are you wasting your time watching NBC Nightly News?

Thu, 08/04/2011 - 19:19 | 1525018 janus
janus's picture

sometimes i watch ARE the father, bitchez!

But i haven't had cable TV in over a decade; so i only see the rest when i'm on the road

when you make a study of humanity, it's important to take a fully-orbed view, my man.

PS, I like your name,, Careless Whisper -- cause Truth doesn't make a noise.


Thu, 08/04/2011 - 20:04 | 1525062 New_Meat
New_Meat's picture

yanus-ZH went big-time a long time ago.  Certainly before Ableson cited Tyler and gang in Barrons, that has a) a hell of a bigger audience and, (well. prrospectively) a more aware audience.

I guess you are among the 89 viewers ;-)

- Ned

{OT, I'm testing formatting <ol> this is a test </ol> end test.}

{{ed. didn't work, the fricken overstrke doesn't work for me, does show in the comment window, but not in the final my karma I guess}}

Thu, 08/04/2011 - 20:08 | 1525084 New_Meat
New_Meat's picture


Thu, 08/04/2011 - 20:17 | 1525107 nonclaim
nonclaim's picture


Thu, 08/04/2011 - 21:24 | 1525262 Freddie
Freddie's picture

This is why Obama is running so many 2012 banners on ZH.

Thu, 08/04/2011 - 19:21 | 1525017 buzzsaw99
buzzsaw99's picture


Thu, 08/04/2011 - 19:22 | 1525024 janus
janus's picture


Thu, 08/04/2011 - 20:07 | 1525080 smlbizman
smlbizman's picture

i really do not want to share my hedge....if you were to fuckin stupid, and you know who you are, to follow the hedge when everything appeared rosy...please don't get on my bus now, ....i knew the day would come when the hedge became mainstream, and the tylers deserve everybit of admiration and financial rewards they get...but for us this is the worst thing that could happen...

Thu, 08/04/2011 - 21:05 | 1525161 vast-dom
vast-dom's picture

You meant "too fucking stupid", stupid.


And is Tyler on teevee 'cause he and Graham know where to get $350/oz gold? Because allow me to give you some unsoliticted advice Ty - and let me qualify it by saying i am an avid follower of ZH - that these glitches and guest posts really do cheapen the cause. 


But WTF do i know? I can't get me no $350/oz of gold and I ain't met no leprechauns either.


Thu, 08/04/2011 - 20:15 | 1525110 Boston
Thu, 08/04/2011 - 23:33 | 1525570 CompassionateFascist
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Limbaugh, who has 20 million listeners/wk, mentioned Zerohedge as "the" go-to economic site a while back and is a regular reader.

Thu, 08/04/2011 - 18:40 | 1524950 wang (not verified)
wang's picture



NBC Nightly News 

did not mention by name but showed the Happy Birthday Mr. President headline along with Tylers Mug



Thu, 08/04/2011 - 18:53 | 1524968 Atomizer
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Ditto. Congratutions Tyler. It was hit & miss for me getting on your site today. How much do you need from each of us to upgrade your server? Not joking, give us a number. I'll send you my share.

Thu, 08/04/2011 - 19:05 | 1524987 hedgeless_horseman
hedgeless_horseman's picture

Why anybody would watch television, especially network news, in 2011 is beyond my limited intelligence.

Tonight, I am taking my family to an outdoor production of Othello.  The kids need to learn more about racism, lies, and murder.

Thu, 08/04/2011 - 19:14 | 1525002 TJ00
TJ00's picture

Racism, lies and murder? Watch the politicians on TV, they are great at all three!

Thu, 08/04/2011 - 19:15 | 1525006 janus
janus's picture

not that i'm not jealous...othello outdoors is othello outdoors, afterall.

but outdoors in the big H in august? 

it's vital to watch; how else will we know what to deprogramm?

Thu, 08/04/2011 - 21:23 | 1525260 wang (not verified)
wang's picture

Have the kids read ZH they will learn just about everything they need to know

as for network television, it's flirting with the darkside, risky but necessary

Thu, 08/04/2011 - 21:31 | 1525283 Freddie
Freddie's picture

TV is for suckers and sheep.  Comcast, Direct TV and Dish or any of them will never get a nickel from me.

I watched the NBC/Comcast/GE/Al Waleed/Obama network video and they interview two Obama types in chicago. One a liberal white woman, the other was a fat young black man hipster.   You two voted for the Hope and Change fvkkers.

Maria looks older and skankier than 87 year old Sophia Loren.  She should get a gig on Jersey Shore with cookie or stookie or whatever.

Thu, 08/04/2011 - 22:55 | 1525483 scatterbrains
scatterbrains's picture

I'd give you a few dollars for a dish... trying to build a solar cooker.

Thu, 08/04/2011 - 23:35 | 1525583 CompassionateFascist
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"Dark rams...and white Ewes".  Will shoulda called 'em...Mudsharks.

Thu, 08/04/2011 - 23:03 | 1525511 sagerxx
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Indeed:  I salute TD/ZH and have much gratitude for all I learn here.  Well-deserved notoriety has finally arrived. On the flip -- damnit, I *hate* when the Philistines catch on.  When does the new, double-secret ZH site go live (so we can escape the oncoming Philistines)? On the Busted Server Tip:  just made my first donation.  The Server Is Dead...Long Live The Server!!!!  (So I can reliably get on ZH on days like today...) Viva -- Sager
Thu, 08/04/2011 - 19:12 | 1524997 MsCreant
MsCreant's picture


I saw that headline and wondered if someone would stick that shit in the president's face.


Thu, 08/04/2011 - 20:05 | 1525072 New_Meat
New_Meat's picture

Hey, Ms--good to see you around these parts ;-) - Ned

Thu, 08/04/2011 - 20:43 | 1525164 janus
janus's picture

Army Strong, MsCreant?

Sat, 08/06/2011 - 13:31 | 1530949 MsCreant
MsCreant's picture

My husband was a low level spy in the service so I can't help it.

Thu, 08/04/2011 - 18:55 | 1524970 ReallySparky
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All I can say is hit the Donate Button, where else can you get news like this??????????  Pony Up you free loaders!

Thu, 08/04/2011 - 19:02 | 1524983 Atomizer
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Settle down sparky. I know operating without a budget is the new Obamanomics norm. If Tyler needs X amount of money to upgrade, then we understand his expense needs and can donate accordingly.


Thu, 08/04/2011 - 19:41 | 1525030 Bastiat
Bastiat's picture

Put up one of those fundraiser thermometer thingies and we'll blow the top off it in days!

Thu, 08/04/2011 - 21:28 | 1525274 dark pools of soros
dark pools of soros's picture

You can't eat servers and you can probably dig 'em up for $5

Thu, 08/04/2011 - 18:53 | 1524971 Stuck on Zero
Stuck on Zero's picture

How would you like your pension fund to be invested in Italian government bonds?

Thu, 08/04/2011 - 20:07 | 1525079 New_Meat
New_Meat's picture


"How would you like your pension fund to be invested in Italian government bonds?"

... invested in US Treasury Bonds..."

Fixed it for ya.

- Ned

Thu, 08/04/2011 - 18:59 | 1524977 macholatte
macholatte's picture


The Euro is finally beginning to crash .......again, trading at around 1.406

Whatever had been hodling it up might be going away.


 Bank of New York Mellon Corp told some of its biggest depositors this week it does not want their money.

Thu, 08/04/2011 - 19:20 | 1525015 walküre
walküre's picture

Whatever had been holding it up?

The German GDP growth numbers of course. Germany actually still produces shit the world wants.

Most Americans can't afford a decent car but that's another story for another day.

Trade against the EUR at your own peril.

December call for EUR/USD 1.55 on QE3, $8 trillion additional debt and China's and Russia's commitment to trade all things Euro.

Thu, 08/04/2011 - 20:16 | 1525113 THE DORK OF CORK
THE DORK OF CORK's picture

I vant teutonic goods but can't afford it - Germany needs to spend on its domestic fixed capital investments  , soon it will have no export customers in Europe.

Thu, 08/04/2011 - 19:02 | 1524982 putbuyer
putbuyer's picture

Time to donate to ZH. I can't live without it. Did very well playing the VIX and FAZ today. ZH must need to add more firepower servers ASAP. Please donate or click. These guys have been amazing for the last 3 years. Give up a little coin.

Thu, 08/04/2011 - 19:14 | 1525001 dickizinya
dickizinya's picture

I'm long on pasta fazul

Thu, 08/04/2011 - 19:19 | 1525009 doomandbloom
doomandbloom's picture

Any Italy is not Greece Tshirts? hmm?

Thu, 08/04/2011 - 19:36 | 1525029 American Dreams
American Dreams's picture

I wonder if Brad Pitt will now send a cease and desist order for use of his image.  Or maybe just a bill.  Good Times... good times

there be no shelter here

Thu, 08/04/2011 - 23:21 | 1525544 sagerxx
sagerxx's picture

I bet he's a fan. Any CnD will come from whatever stude produced FC.

Thu, 08/04/2011 - 19:40 | 1525032 Mr.Kowalski
Mr.Kowalski's picture

"Tomorrow will be a key day. If the ECB and/or EFSF {or someone else} don't step up and do something before the European markets open, there is a fair chance that all hell will break loose at the open. If this is the case, I look for The Fed to step in {in some fashion} to help calm the markets"

Thu, 08/04/2011 - 21:55 | 1525343 CrankItTo11
CrankItTo11's picture

Asian stocks are getting masacred.

Thu, 08/04/2011 - 19:52 | 1525043 Atomizer
Atomizer's picture

What's funny is the series of IMF issues and pleas by IMF to Korea.

IMF: Board Confident Lagarde Can Effectively Carry Out Duties As IMF Chief

South Korea buys gold for first time in 13 years

Korean economy shifted from recovery to expansion, but further tightening and rebalancing needed.

IMF urges S. Korea to raise interest rates

Largarde: If I was to write to my mother today, to say that I'm over my head.. she would be happy if she were alive.

Thu, 08/04/2011 - 19:59 | 1525057 Atomizer
Atomizer's picture

FSB <<--- click for report:Peer Reveiw of Italy Jan 2011


Thu, 08/04/2011 - 20:09 | 1525087 jkruffin
jkruffin's picture

Folks better either know, or better start learning......this collapse is going to change America...

Thu, 08/04/2011 - 21:16 | 1525246 PolishErick
PolishErick's picture

+1000 for that tune...


Maybe Im paranoid but I think the collapse might wreck the whole world and send it back to the dark ages (and fuck me I dont have a castle on a hill or a suit of plate armor)... It won't only "change America"... We will see in the next days/weeks if this is the big one or if the kleptocracy can kick it down the road.

All eyes are going to be on Italy for now- I bet... But there are other things that can pull the old world down- over here in Poland it wont take much- If the Swiss Frank keeps appreciating against the Zloty there is going to be 700 thousand families out on the street- lotsa mortgages in swiss paper... If Fiat goes down with the ship and pulls back their plant here- 6000 jobless people in my town and the ones around it... Everywhere I look I see something just waiting to fall and burn because of the ripple effect from this shitstorm- and I bet its like that around the world... all of it is interconnected... Well hoorah for globalization!

Thu, 08/04/2011 - 22:05 | 1525363 Freddie
Freddie's picture

Well Erick it could be worse.  You could have Obama/Mugabe leading your country (to ruin).  That is worse.  A lot worse.

Fri, 08/05/2011 - 09:50 | 1526570 janus
janus's picture

oh, make no mistake, HWjr is well prepped.  he lives on @600 secluded acres about 80 miles south of here...four generators with over 250,000 gal fuel storage; and guns? bitchez, hank gots some guns.  don't really need to store food round here, there's critters as far as the eye can see...and some of em's tasty

so don't ask me hank why do you drink/

to get drunk/

why do you roll smoke/

to get stoned/

why must you live out the songs that you wrote/

to get laid!/


Thu, 08/04/2011 - 20:10 | 1525089 MAGICWIZARD

italy is toast in the morning......

Thu, 08/04/2011 - 20:11 | 1525104 Atomizer
Atomizer's picture

April 13, 2011: future structuring of Italy.

PRESS RELEASE 4 August 2011 - ECB announces details of refinancing operations with settlement in the period from 12 October 2011 to 17 January 2012

Given the renewed tensions in some financial markets in the euro area, the Governing Council of the European Central Bank has today decided to conduct a liquidity-providing supplementary longer-term refinancing operation (LTRO) with a maturity of approximately six months. The operation will be conducted as a fixed rate tender procedure with full allotment. The rate in this operation will be fixed at the average rate of the main refinancing operations (MROs) over the life of the supplementary LTRO. The operation will be announced on 9 August 2011, with allotment on 10 August 2011 and settlement on 11 August 2011, and will mature on 1 March 2012.

The Governing Council also decided to continue conducting its MROs as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the last maintenance period of 2011 on 17 January 2012. This procedure will also remain in use for the Eurosystem’s special-term refinancing operations with a maturity of one maintenance period, which will continue to be conducted for as long as needed, and at least until the end of the last quarter of 2011. The fixed rate in these special-term refinancing operations will be the same as the MRO rate prevailing at the time.

Furthermore, the Governing Council has decided to conduct the three-month LTROs to be allotted on 26 October, 30 November and 21 December 2011 as fixed rate tender procedures with full allotment. The rates in these three-month operations will be fixed at the average rate of the MROs over the life of the respective LTRO.

European Central Bank
Directorate Communications
Press and Information Division
Kaiserstrasse 29, D-60311 Frankfurt am Main
Tel.: +49 69 1344 7455, Fax: +49 69 1344 7404

Reproduction is permitted provided that the source is acknowledged


Thu, 08/04/2011 - 20:47 | 1525167 Reptil
Reptil's picture

Isn't that too late? It's happening now, not in a month or so, and it won't work anyway. The hole is too big: Greece wrote a page about cronyism, Italia bella has a centuries old library.

Thu, 08/04/2011 - 20:47 | 1525173 straightershooter
straightershooter's picture

Bullet #16


The more the ECB propounds to stabilize Italy, the deeper and quicker Italy sinks.


Bulllet #17

The Japanese, The korean, The swiss and the rest of the world are well trained by one Ben Bernanke in transitory policy response: My digipress versus your digipress and see whose digi is egregiously bigger and faster. So far, Bernanke 2 and the rest of the world: 1 and 1/2.

Bullet #18

No one takes seriously at Moodys', S&P, fitch, rat agencies. No one takes seriously at Congress for its ledgerdemain show in Con artist: The cut you saw is really not a cut, but a name of cut.

Bullet #19

The exponent function, or compounding, is the final destination VI of the US debt problem. The debt will always secure its payback, dead or alive.


Thu, 08/04/2011 - 21:02 | 1525210 chump666
chump666's picture

EZ is falling apart, if yields on the 10yr Italian/spanish bonds hit 7%, you can 100% lock in that the EU/EZ will kick out Greece, which is sucking funds out of that bailout fund.

Thu, 08/04/2011 - 21:03 | 1525214 chump666
chump666's picture

...which Greece will never pay back

Fri, 08/05/2011 - 09:57 | 1526600 janus
janus's picture

which the greeks didn't want.  Greece, you don't owe anyone a goddam thing; save, of course, the blood of your betters.

keep it safe for now, we want to spill it on wall street.  there's got to be a symmetry to these things, don't you know.

'while the springtime turns slowly into autumn...'


Thu, 08/04/2011 - 21:18 | 1525249 wang (not verified)
Thu, 08/04/2011 - 21:24 | 1525269 dark pools of soros
dark pools of soros's picture

So now I get zee Prada and Maserati cheap, no?

Fri, 08/05/2011 - 02:57 | 1525878 FinalCollapse
FinalCollapse's picture


Thu, 08/04/2011 - 21:39 | 1525297 JustACitizen
JustACitizen's picture

If Italy and France are "pillars of your economic union" then you should be worried...

Thu, 08/04/2011 - 22:08 | 1525377 Freddie
Freddie's picture

Well France and Italy have one thing. 

They don't have Obama and an idiot populace who voted for him or a news media who fawns over him.

Fri, 08/05/2011 - 04:44 | 1525964 falak pema
falak pema's picture

It makes me laugh to see you guys on the other side of the pond bashing away at EU misery. Granted its a cess pool. But nothing compares with the immense black hole of finance that is the US economy. So all this 'you'll fall first' ranting is sterile and irrelevant. The whole system will fall and the bigger you are the harder the fall!

Italy went through the Renaissance. They invented it. They'll survive the next melt down. Resilient people. Hope its true all over the world.

Thu, 08/04/2011 - 21:39 | 1525307 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Why Speculators Should Sell Their Gold Now

Four Factors That Could Stall Gold’s Price Rise.....

OT: hilarious 2 min video.....

Thu, 08/04/2011 - 21:57 | 1525309 wang (not verified)
wang's picture



and meanwhile from Zurich

Faber expect a 50 point snapback as market is extremely oversold


he smells qe3 which would mean even more upside but no new highs this year

Thu, 08/04/2011 - 22:04 | 1525360 Stoploss
Stoploss's picture

Unfortunately, i do realize some may need to sell some gold and silver.

Fortunately, i had already raised an absolute shitload of frn's to trade for more..

Unfortunately, CNBW was looking like CNBS, right up until the time it went off the air.

Fortunately. i have zero hedge to rely on...

Thu, 08/04/2011 - 22:10 | 1525371 agrotera
agrotera's picture

it is all theater...take a look at Patrick Byrne's the movie to see that the market was flooded  with bear stearns and lehman stock certificates 3 days before they went down,(FAIL TO DELIVER FTD) yet the SEC has no interest in stopping the thieving.  The market run up last month, was just a little getting ready for the big slam.  Just wait, a few months from now, we will see the magic of front running when the holy TOOSANCROSANCTTOFAIL banks somehow and magically "weather" this downturn...

Just like Lehman being a sacrificial lamb to save the bankrupt wallstreet toobigtofail brethren, this downturn is life blood for the frontrunning scum in the president's working group...just sayin.

Fri, 08/05/2011 - 00:20 | 1525701 janus
janus's picture

My Lovely,

When I saw your Ikon...well, i guess you could say it was all bright-white light breaking through the clouded sky.  or maybe like noah spotting his promise-dove over bleak-like seas...again, perhaps stout cortez surveying the lonely pacific sky at night and finding a brand new twinkly, lusterous sparkler invading his ken...i don't want to overstate the point or anything, but i've missed you.

toosancrosancttofail...and you callin janus the poet.

you know, i went back and read some of the stuff you've posted...and, shucks, i'd just be tellin you stuff you already know -- you're a smart one, Agrotera...and so I offer tribute of earth and water:

Earth -- my apologies.  I lost something valuable you gave me; and i aim to get it back.  I'll figure out some charming way of resecuring it, and then i'll put my infalible plan into any good at ciphers?

Water --





Fri, 08/05/2011 - 00:36 | 1525722 agrotera
agrotera's picture

Wondering where you have been janus.  So glad to hear your magic words again!  No need for cousins to give offerings, remember?  Yes, usually i am good at riddles, so here you go:  my name with dot az @ you know where.  So, give ur cuz a hollar any ole time!  In the meantime, dear janus, show us the way with your bright light!

Thank you for the nice song!



Fri, 08/05/2011 - 01:01 | 1525755 janus
janus's picture

i think i've got it...let me know if you got my message.  I've got lotsa stuff to tell you. 

Fri, 08/05/2011 - 01:47 | 1525813 janus
janus's picture

well, while i'm waiting on you to confirm receipt of my emil, janus will bless you will another song.

BTW, this band, Big Star, is a tragic story of almosts and bad timing and eventually drug abuse...all the same, they made some great music...oh, and this is of course incidental for folks like you and i (wink, wink), but they're from the Delta's queen city, Memphis, TN.  without further ado, Stroke It Noel:

keep an eye on the sky/

will they come/

oh the bombs/

do you wanna dance?/

easy now...,


Thu, 08/04/2011 - 22:26 | 1525414 besnook
besnook's picture

the msm paying homage to tyler is not a good thing. it is like an invitation to the dark side with an appeal to ego. it is also an admission that the msm is losing the information war. if they can just get an acknowledgement from tyler they will be considered cool and if tyler would just tone down his rhetoric(truth telling) he might enjoy some of the wealth and privilege of the realm. the snake beckons with a surrogate offering the apple.

Thu, 08/04/2011 - 22:28 | 1525418 besnook
besnook's picture

i maintain my thesis that germany will own vast parts of europe by the time the dust settles.

Thu, 08/04/2011 - 23:34 | 1525574 FeralSerf
FeralSerf's picture

But it won't be worth much then if they do.  There also won't be anyone left that can afford to buy that German car, except for a few Russian mafia types.   Hello German unemployment.

Fri, 08/05/2011 - 00:55 | 1525752 besnook
besnook's picture

they could form a new axis with russia and china to exchange assets for debt acting as the enforcer of of german style economics.


seriously, i cannot see germany passing up the opportunity to do something that secures the financial stability of the eurozone and therefore germany by doing an asset for debt swap.

how does the saying go, "in for a penny, in for a coupla trillion"

Fri, 08/05/2011 - 01:16 | 1525775 janus
janus's picture

they do own a large part of europe; it's called europe, or eroica when i'm done with it. 

their holdings stretch into the bospherous, too

Thu, 08/04/2011 - 22:53 | 1525485 Atomizer
Atomizer's picture
Charles Hugh Don't Fight Bet On The Fed
Thu, 08/04/2011 - 23:34 | 1525571 Reese Bobby
Reese Bobby's picture
Summarizing Italy's Catastrophic Predicament:

in six words: Italy was given very cheap credit.

Thu, 08/04/2011 - 23:37 | 1525582 FeralSerf
FeralSerf's picture

It was the only way to get them to buy all that cool German stuff.

Thu, 08/04/2011 - 23:48 | 1525608 Reese Bobby
Reese Bobby's picture

Beer and their famous sense of humor I guess...

Thu, 08/04/2011 - 23:50 | 1525613 punketo
punketo's picture

does this mean the colosseum is for sale now? 

Thu, 08/04/2011 - 23:53 | 1525617 AlephZero
AlephZero's picture

Have you noticed how the dominoes are falling in approximate order of their socialist/communist tendencies?  How appropriate is that?

Thu, 08/04/2011 - 23:51 | 1525618 AlephZero
AlephZero's picture

Have you noticed how the dominoes are falling in approximate order of their socialist/communist tendencies?  How appropriate is that?

Fri, 08/05/2011 - 01:33 | 1525798 Poetic injustice
Poetic injustice's picture

Simply Italy has more meat on bones to share between wolves.

Portugal does not have. And yes, it is not socialist tendencies but but irresponsibility on all levels.

Fri, 08/05/2011 - 02:11 | 1525836 Troy Ounce
Troy Ounce's picture


Does Italy have a solvency or liquidity crisis, the latter argued by Credit Writedowns?

Fri, 08/05/2011 - 02:37 | 1525860 Dick Darlington
Dick Darlington's picture

08-05 2:14: Credit Suisse's Garthwaite says ECB/EFSF must buy Italian and...


Banker panic imminent. One fool after another from these TBTF institutions are begging more of the same medicine that has made things WORSE since the onset of the crisis. With a big multiple.

Fri, 08/05/2011 - 03:05 | 1525881 FinalCollapse
FinalCollapse's picture

/ES=1188. Tomorrow on CNBC, Lies-man will be masturbating while dreaming about QE3.

Fri, 08/05/2011 - 05:16 | 1525987 matte1975
matte1975's picture

I don't know if anyone has given a look at how bis/imf data is calculated (I think they are used by MS as well).

In the case of Italy in the last 10/15 years we have had a flow of domestic funds from domestic mutual funds to foreign mutual funds usually managed by some foreign entity of an Italian bank. 15 years ago the ratio was 70% gdp in domestic and 15% abroad, now is 70% abroad and 15% domestic.

In my case a switched my bond part of the personal portfolio from some Italian btp and bunds to the equivalent etf on European gov. bonds (which is France based).

How bis/imf data treat this movement. It shows an increase in net foreign debt of Italy but not of France. Bis/imf consider the ownership of mutual funds/etf as equity ownership. At the same time, it consider the btp owned by the foreign based fund/etf as external debt. So what was a domestic debt become a foreign held debt.

To sum up, in the case of Italy, a foreign mutual fund owned by Italians that buys btp will be seen as:

-          a foreign entity;

-          the debt of Italy is seen as foreign held;

-          the shares of the fund are seen as equity so they are not seen as debt of the country where the fund is domiciled.

I do not know how important this way of computing data is, but the effect is not negligible. Moreover, if you take in consideration the small country of Europe where there is no mutual fund industry, you will find that bis/imf data overstate foreign held debt (because all the citizen of the small country probably own the debt indirectly through some foreign mutual fund).

Finally the balance sheet of the ecb (not the consolidated one) is considered as it was all imputed to Germany (…eventually it will).


Here I paste the relevant passage of the bis/imf document describing their way of computing data:

Gross external debt is the amount, at any given time, of
disbursed and outstanding contractual liabilities of residents
of a country to nonresidents to repay principal,
with or without interest, or to pay interest, with or without

2.9 To qualify as external debt, the debt liabilities
must be owed by a resident to a nonresident. Residence
is determined by where the debtor and creditor
have their centers of economic interest—
typically, where they are ordinarily located—and not
by their nationality. The definition of residence is explained
in more detail later in this chapter and is the
same as in BPM5 and the 1993 SNA. Clarification of
the determination of residence for entities legally
incorporated or domiciled in “offshore centers” is

2.13 Debt liabilities of residents that are owed to
nonresidents are to be included in the presentation of
an economy’s gross external debt position. Debt liabilities
owed to residents are excluded. Hence the definition
of residence is central to the definition of external
debt. In the Guide, as in the BPM5 and the 1993
SNA, an institutional unit—that is, an entity such as a
household, corporation, government agency, etc., that
is capable, in its own right, of owning assets, incurring
liabilities, and engaging in economic activities
and in transactions with other entities—is a resident
of an economy when it has its center of economic interest
in the economic territory of that country.

2.16 In essence, an institutional unit is a resident of
the economy in which it is ordinarily located. For instance,
a branch or subsidiary is resident in the economy
in which it is ordinarily located, because it engages
in economic activity and transactions from that
location, rather than necessarily the economy in
which its parent corporation is located. Unincorporated
site offices of major construction and similar
projects, such as oil and gas exploration, that take
over a year to complete and are carried out and managed
by nonresident enterprises will, in most instances,
meet the criteria of resident entities in the
economy in which they are located, and so can have
external debt (although the claims on the office by the
parent might well represent an equity investment).6

2.18 Similar issues can arise with “brass plate companies,”
“shell companies,” or “special purpose entities”
(SPEs). These entities may have little physical
presence in the economy in which they are legally incorporated
or legally domiciled (for example, registered
or licensed), and any substantive work of the
entity may be conducted in another economy. In such
circumstances, there might be debate about where the
center of economic interest for such entities lies. The
Guide attributes external debt to the economy in
which the entity, which has the liabilities on its balance
sheet, and so on whom the creditor has a claim,
is legally incorporated, or in the absence of legal incorporation,
is legally domiciled. So, debt issues on
the balance sheet of entities legally incorporated or
domiciled in an offshore center are to be classified as
external debt of the economy in which the offshore
center is located. Any subsequent on-lending of the
funds raised through such debt issues to a nonresident,
such as to a parent or subsidiary corporation, is
classified as an external asset of the offshore entity
and external debt of the borrowing entity.

2.21 A regional central bank is an international financial
organization that acts as a common central bank
for a group of member countries. Such a bank has its
headquarters in one country and usually maintains national
offices in each of the member countries. Each
national office acts as central bank for that country
and is treated as a resident institutional unit in that
country. The headquarters, however, is an international
organization, and thus a nonresident from the
perspective of the national central banks. However, for
statistics relating to the economic territory of the
whole group of member countries, the regional central
bank is a resident institutional unit of this territory.

3.19 Portfolio investment (Table 3.2) includes
traded securities (other than those included in direct
investment and reserve assets). These instruments
are usually traded (or tradable) in organized and
other financial markets, including over-the-counter
(OTC) markets. When they are owed to nonresidents,
of the portfolio investment components, debt
securities—that is, bonds and notes, and money market
instruments—are included in the gross external
debt position. Equity securities, including share investments
in mutual funds and investment trusts,4
are not included in the gross external debt position.


Fri, 08/05/2011 - 07:01 | 1526087 janus
janus's picture

very helpful, thanks

Fri, 08/05/2011 - 06:37 | 1526061 Roger Knights
Roger Knights's picture

"In retrospect we certainly can not blame Tremonti for wanting to get the hell out of there."

Or Geithner, for wanting to get out of here.

Fri, 08/05/2011 - 06:59 | 1526079 janus
janus's picture


Fri, 08/05/2011 - 09:27 | 1526498 falak pema
falak pema's picture

where do you go when you run...cos a bank run always out runs you. And you never know which bank will tank and run its stockings down to its ankles; like an old lady without underpanties. Naked is  he that nobody can afford to hide or save from the running tide.

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