End in Sight for Italy


Predaceous Stink Bug
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As reported on zerohedge.com

Euphoria may have returned briefly courtesy of yet another promise for a resignation that will likely not be effectuated for weeks or months, if at all, and already someone has done the math on what the events in the past several days reveal for Italy. That someone is Barcalys, the math is not pretty, and the conclusion is that "Italy is now mathematically beyond point of no return."

Summary from Barclays Capital inst sales:

1) At this point, it seems Italy is now mathematically beyond point of no return
2) While reforms are necessary, in and of itself not be enough to prevent crisis
3) Reason? Simple math--growth and austerity not enough to offset cost of debt
4) On our ests, yields above 5.5% is inflection point where game is over
5) The danger:high rates reinforce stability concerns, leading to higher rates
6) and deeper conviction of a self sustaining credit event and eventual default
7) We think decisions at eurozone summit is step forward but EFSF not adequate
8) Time has run out--policy reforms not sufficient to break neg mkt dynamics
9) Investors do not have the patience to wait for austerity, growth to work
10) And rate of change in negatives not enuff to offset slow drip of positives
11) Conclusion: We think ECB needs to step up to the plate, print and buy bonds
12) At the moment ECB remains unwilling to be lender last resort on scale needed
13) But frankly will have hand forced by market given massive systemic risk

Hint:Not Good.Sell EUR, Buy Gold

Thanks for the hint but most of us are way ahead of you... :gold:
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Your Host
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Momma mia, that's a spicy a meatball!

It's pretty clear that there will be no status quo solution to the Eurozone's collective debt problem. Whether one wishes to single out Greece, Italy, French banks, Spain, Portugal, etc. doesn't really matter IMO. You can focus on an individual country and pretend the others don't exist. Any solution you propose for one has to be extendable to all and there is just too much debt. It's a Gordian knot that's been years in the making. It's going to have to be cleaved with the dissolution of the Euro. There is no other path. $.02