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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Careless Whisper's picture

bullet point 16:

* Jersey Shore season 4


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.

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...

Row Well Number 41's picture

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


New_Meat's picture

Never could figure out how to start mine.  - Ned

Floordawg's picture

Fuckin' Italian Atempt at Transportation!

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.

buzzsaw99's picture

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

CrashisOptimistic's picture

Additional bullet point:

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

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". :-)

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.

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.

Vampyroteuthis infernalis's picture

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

scratch_and_sniff's picture

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

bogbrush's picture

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

janus's picture






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,


Careless Whisper's picture

Why are you wasting your time watching NBC Nightly News?

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.


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}}

Freddie's picture

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

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...

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.


CompassionateFascist's picture

Limbaugh, who has 20 million listeners/wk, mentioned Zerohedge as "the" go-to economic site a while back and is a regular reader.

wang's picture
wang (not verified) Aug 4, 2011 6:40 PM



NBC Nightly News 

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



Atomizer's picture

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.

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.

TJ00's picture

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

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?

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

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.

scatterbrains's picture

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

CompassionateFascist's picture

"Dark rams...and white Ewes".  Will shoulda called 'em...Mudsharks.

sagerxx's picture
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
MsCreant's picture


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


New_Meat's picture

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

janus's picture

Army Strong, MsCreant?

MsCreant's picture

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

ReallySparky's picture

All I can say is hit the Donate Button, where else can you get news like this??????????  Pony Up you free loaders!

Atomizer's picture

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.


Bastiat's picture

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