Monday, November 28, 2011

Italy

I think the Italian story is make or break. Either this gets fixed or Italy defaults in less than six months. The default option is not really an option that policy makers would consider. If Italy can’t make it, then there will be a very big crashing sound. It would end up taking out most of the global lenders, a fair number of countries would follow into Italy’s vortex. In my opinion a default by Italy is certain to bring a global depression; one that would take many years to crawl out of. The policy makers are aware of this too. (Bruce Krasting)

Italy has Euro 300 billion of maturing debt in 2012 -- interest rates have nearly doubled in the past 30 days.  There is no market solution for Italy.  Pick your poison; ECB or IMF -- otherwise is default.  Cannot wait to see how Ms. Merkel plays this card.  After all, she's worked very hard at painting herself in a corner "there will be no ECB bailout"  I would be surprised if she survives this.  In fact, I would be very surprised if any politician in any OECD country survives this crisis.

Steven Harper (Canada) must be happy he got an election in May, he is probably the only safe politician (unless we get a depression).

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