On aeg teha lahti kirstu kaas, mida mitte keegi pole julenud, aga teavad et see võib tulla. Et kas nüüd on käes? Ei, aga kaugel me enam oleme? FT Alphaville vahendusel on Citigroup Matt King'i artikkel Itaaliast ja Itaalia probleemidest, mis on nii Itaalia enda reformimiste probleemide kirjeldus kui ka faktorid, mis tänu GPap ja Kreeklaste võimetusele kokkuleppida ja edasi minna, mõjutavad juba Itaaliat.
The Italian endgame is getting nearer and a crisis is “increasingly probable, and would do much to expose the inadequacies of the bailout mechanism as a whole”, warns Citigroup’s Matt King (he of the seminal “brokers are broken” thesis from 2008 that we put back together on Wednesday).
He’s also worried that the new EFSF is too big and and too weak but these aren’t top of the worry list. Italy is. King notes that “BTPs have been close to these yields before; spread levels have not”
We are also quite close to the point beyond which other sovereigns have found it very difficult to return, when yields breach 6% (Figure 3). This is partly because feedback loops kick in and additional widening could easily accelerate. For example, if spreads of 450bp on 10-year governments are exceeded for five consecutive business days, LCH haircut requirements for banks borrowing against Italian collateral will rise by 15%. If banks liquidate their BTP holdings, this will simply exacerbate the problem. If instead they choose to seek funding at the ECB (for example, if they are running short of collateral), publicity around different countries’ banks’ usage of ECB facilities seems likely to lead to more selling in both the banks and the countries concerned. This is part of the reason why when Portuguese spreads breached this point, not only did the sovereign yield quite rapidly back up further, eventually breaching 10%, but the rating agencies followed up with sovereign and bank downgrades for good measure. Admittedly this was all part of Portugal’s losing access to markets and applying for a bail-out, but we see no reason why the feedback loops should operate any differently for Italy.
Itaalia sündmused, mis eelnesid G20 kohtumisele. Probleemiks oli see, et G20, eriti Merkozy, eeldasid Berlusconilt kinnitatud tegevusekava. Läks nagu alati - siseriiklikult mindi raksu ja ei jõutud kokkuleppele.
Meenub kuu või poolteist tagasi FT tõlkelugu e24.ee peal, kus räägitakse nagu Berlusconi oleks Euroopa liidrite seas üksik, teda kuhugi ei kutsuta ja keegi temaga ametlikel kohtumistel rääkida ei taha. Ainus, kelle juures on ta teretulnud on Putini juures. Seetõttu ta seal puhkamas ka käib.
http://blogs.ft.com/the-world/2011/11/eurozone-crisis-live-blog-9/#ixzz1cj5TB3Bp FT Brussel Live Blog @ 02.11.11
10.35: Chris Adams, the FT’s markets editor, tweets about the Bank of Italy’s decision reportedly preparing an emergency operation to swap Italian debt held by domestic banks for pledge by them to buy more at longer maturities. ------------ 11.00: Reverse ferret. The Bank of Italy has denied the bond swap operation report and will be issuing a statement shortly. ----------- 19.25: To Rome, where Silvio Berlusconi has summoned his ministers for an emergency cabinet meeting to pass economic reforms which are supposed to be presented to the rest of the G20 leaders tomorrow. The FT’s Guy Dinmore reports:
“Umberto Bossi, blunt talking leader of the Northern League and a key ally in Berlusconi’s coalition government, says there is ‘no point’ in calling for the prime minister’s resignation. ‘Berlusconi won’t do it,’ he told reporters. Asked what he thought about opposition demands for an emergency government headed by a respected technocrat like former European commissioner Mario Monti, Mr Bossi was reported to have given a ‘raspberry’ which can be an Italian euphemism for Mr Bossi’s middle finger.
Last week Mr Bossi blocked moves by Mr Berlusconi’s People of Liberty party to reform the seniority pension system that allows workers to retire in their 50s if they have paid 40 years of contributions. Today he said such a move would ‘unleash a revolution’.
Meanwhile the committee for safeguarding financial stability, chaired by Giulio Tremonti, finance minister, concluded that Italy’s economic fundamentals and the banking system were sound. Officials scotched media speculation that Italy was about to go cap in hand to the IMF for emergency loans. Mr Tremonti was among various politicians trooping up the hill of the Quirinale today to meet Giorgio Napolitano, president, fuelling yet more rumours that the minister’s constant battles with Mr Berlusconi had persuaded him to discuss the possibility of a change of government.” ------ 22.23 This just in from Guy Dinmore in Rome
“Silvio Berlusconi failed on Wednesday night to overcome internal government divisions and push through immediate legislation on structural reforms ahead of Thursday’s summit of the Group of 20 leading economies.
“Italy’s prime minister had hoped to have a decree agreed by the cabinet in his hands to take to Cannes and to calm markets that have pushed Italian bond yields close to euro-era highs. But government sources said disagreements between Giulio Tremonti, the finance minister who is insisting on fiscal discipline, and Mr Berlusconi who was backed by other ministers, prevented a deal being reached.”
16.30: Guy Dinmore reports from Rome that Ignazio Visco, the new head of the Bank of Italy, has urged Silvio Berlusconi’s government to honour its commitments to the European Union by reducing high levels of public debt and introducing structural reforms “consistently and rapidly”.
“To regain investors’ confidence and achieve the lasting reduction of sovereign risk, to preserve the stability of the financial system, it is necessary to proceed resolutely with the consolidation of the public finances. With equal determination, the impediments to a sustained growth of the economy must be removed,” Mr Visco says.
Mr Visco’s first major statement as governor, contained in the central bank’s latest Financial Stability report, was issued as Mr Berlusconi’s cabinet prepared to hold an emergency session to draw up legislation on reforms. The Italian prime minister is to present his plans to the G20 summit in Cannes tomorrow.
While noting the significant increase in Italy’s sovereign spreads, Mr Visco points to strengths in the Italian economy, including “the trend towards the consolidation of the public accounts, the low level of private sector debt, the absence of imbalances in the real-estate market, and limited foreign debt.”
The rise in Italian bond yields “does not appear to take full account of the strengths of the Italian economy”, the report says. However it notes that a significant amount of government bonds mature in the first four months of next year, with a graph indicating a total of about 150bn euros.
The report says that if Italy meets its fiscal consolidation targets then the debt to GDP ratio should fall or stabilise “even if interest rates on government securities were to undergo significant increases.” However it does not define “significant”, with the report written before the recent spike in yields on Italy’s benchmark 10-year bond over 6.1 per cent.
The report warns that Italian companies are experiencing weakening economic activity with business surveys pointing to further declines and a worsening of terms for access to credit. “If these expectations materialize, the financial condition of many firms could worsen in 2012,” the report says.
On Italian banks it noted that their exposure to Greece, Portugal and Ireland is “very low” in securities and CDS markets. Italian banks have reduced their foreign exposure and shifted towards central and eastern Europe, it says. “Banks’ profitability is stable, but the prospects are clouded by developments in the real economy and the strains in the financial markets. The containment of costs will have to play a key role in recouping profitability.”
On Italy’s debt outside the public sector, the report notes that the total financial debt of households and non-financial firms amounted to 126 per cent of GDP at the end of 2010, compared with 168 per cent in the euro area, 166 per cent in the United States, and more than 200 per cent in the United Kingdom.
Kogu see hala "(finants)maailma lõpu" kohta on väga tuttav, vahetult enne Eesti krooni devalveerimist möllas ajakirjandus samamoodi. "Parem õudne lõpp kui lõputu õudus" "<Väga halb asi> juhtub <riigis X> juba 18 novembril!" ... Ajalugu kordub! :-)
10.17: To Rome, where there is confusion over conflicting reports out of Cannes this morning over whether or not the IMF is to take a bigger role in helping Italy through its debt-financing difficulties. The FT’s Guy Dinmore has been reading the smoke signals:
“An Italian government official tells the FT that officials are working on a ‘redrafting’ of a text concerning eurozone countries under stress, notably Spain and Italy. He said Italy was ready to accept ‘advice’ from the IMF on implementation of the conclusions of the euro group of 27 nations. Such ‘advice’ would be in parallel with the role of the European Commission, which is monitoring Italy’s progress towards implementing structural reforms promised by Silvio Berlusconi’s government but not yet delivered. The official denied reports that Italy had accepted ‘monitoring’ from the IMF. He also said he knew nothing about a reported offer by Christine Lagarde, head of the IMF, to Mr Berlusconi of a €44bn euro credit line, which the prime minister was said to have turned down.
Meanwhile Italy’s benchmark 10-year bond was trading little changed from yesterday’s closing levels at 6.2 per cent, with the spread over German bunds at just under 430 points.”
12.33: It is far from clear exactly what the IMF is to monitor in Italy or how it will do it (see 12.02 and 10.17). The Berlusconi government was supposed to agree a package of economic reforms to be presented to the rest of the G20. But the rifts between ministers proved unbridgeable – though Italy has given Europe various commitments to reform. Giulio Tremonti, a finance minister evidently fond of plain speaking, was quoted as telling Berlusconi:
“I am saying that on Monday there will be a disaster on the markets if you, Silvio, stay at your post and do not go. Because the problem for Europe and the markets, correct or not as it may be, is in fact you.”
----------- 13.26: In Cannes the FT’s Peter Spiegel has been going over Barroso’s comments on the IMF monitoring Italy (see 12.02):
“Barroso made clear that this would be much more intrusive than a traditional IMF Article IV review, which the fund does annually for all its members. Instead, Barroso said it would use as a baseline the 14-page letter Berlusconi sent to the EU last month detailing the initiatives he intends to implement, including raising the country’s retirement age to 67. ‘I see this as evidence of how important Italy’s reform process is for the country and for the eurozone as a whole,’ Barroso said.”
14.20: HOLD THE PRESSES!!! the IMF is not going to be monitoring Italy. Rather it’s going to be “certifiying” or “verifying” Italy’s reforms. Or so said Silvio Berlusconi at his post-G20 press conference.
Guy Dinmore, the FT’s Rome correspondent, has been following the press conference. He says the most interesting bit was when Giulio Tremonti, the finance minister – who to say the least has had a troubled relationship with Mr Berlusconi, and was sitting alongside his boss at the press conference – was asked to comment on reports that he believed Italy needed a change of government.
The prime minister jumped in to say the reply was not in doubt, raising laughs.
Mr Tremonti took the microphone and a deep breath and replied: “I have nothing to add to what the prime minister said.” Pressed later, Mr Tremonti said he had not had time to read the newspapers and saw no need to deny things he had not read. Mr Berlusconi leaped in again saying the press often reported the complete opposite of reality. Hardly a convincing demonstration of unity.
Defending the state of the Italian economy, Mr Berlusconi said it was the seventh largest in the world, that consumer spending was not declining, the restaurants were full, airlines were filling their seats, and holidays were booked. This is not a country in crisis, he said.
15.35: There’s been a bit of he-said-she-said going on with Mr Berlusconi saying Italy turned down an offer from the IMF of financial aid – in the form of a precautionary line of credit – and Christine Lagarde, the head of the IMF, saying the offer was never made. Whom to believe….?
Berlusconil vaatlejate arvates viimased päevad nüüd käsil valitsusjuhina. Parlamendis 2 MPd lahkus Silvio kambast ja nüüd on tal 314 häält 630st. Veel 6 siiani lojaalset MPd kirjutasid kirja soovitades tal uue valitsusega uut faasi alustada poliitikas sest praegusel valitsusel pole enam toetust mis võimaldaks lubaduste (IMFle, ELle) täitmiseks vajalike tähtsaid otsuseid läbi hääletada. 18 MPd olla valmis teiste parteidega liituma kui midagi ei muutu. Osad pakuvad right hand man Gianni Letta't sobivaks asenduseks. Pres. Napolitano kel võimu PM välja vahetada on kõigi põhiparteidega kombanud pinda Silviole alternatiivi leidmiseks. Eks näis, teisp. oluline eelarve hääletus ja juba neljap. võib-olla usaldushääletus. Kas ta "I will survive" saab laulda oma Sardiinia villa karaoke saalis 18 a. tüdrukutele?
PS. mis ta artisti nimi võiks olla ? (a la GPap): SillyB, SilBer, Berla, DJ BungaBunga, MC Silvio B.?
Vabandust OT pärast, aga winger, kas sul mingi muu tegevus peale siinses foorumis kirjutamise ka on? :) Postituste tiheduse järgi mingi muu asja jaoks aega küll ei tundu jäävat.
Itaalia augustis esitatud reformide kava, sarnaselt Kreeka reformikavale. Eile Itaalia lehele La Stampa ütles ECB Yves Mersch ECB arutab tõsimeeli lõpetada Itaalia võlakirjade ostmise, kuna Itaalialt pole näha muudatusi / reforme tulemas. Berlusconil aga pole enam reaalset võimu valitsuse üle, ega ka kellelgi teisel, mistõttu võib paberile kirjutad mida tahes, see ei rakendu. Itaalial aeguvad 2012 aastal €166bn eest võlakirju ja lisanduvad intressid. Lisaks G20 pressikonverentsi segadus, kus Berlusconi rääkis ühte ja Itaalia Keskpanga president teist juttu. Lisaks siis opexi poolt toodud opositsiooni surve Berluaconile. G20 eelne Berlusconi ja rahandusminstri vaheline arutelu läks vett vedama
Yves Mersch "If we observe that our interventions are undermined by a lack of efforts by national governments then we have to pose ourselves the problem of the incentive effect," Mersch said according to extracts of an interview with Italian daily La Stampa to be published on Sunday. Asked if this meant the ECB would stop buying Italy's bonds if it did not adopt reforms it has promised to the European Union, Mersch, who heads Luxembourg's central bank, replied: "If the ECB board reaches the conclusion that the conditions that led it to take a decision no longer exist, it is free to change that decision at any moment. We discuss this all the time."
Mersch said the ECB did not want to become a lender of last resort to help the euro zone solve its debt crisis and said it was concerned that its job could be made more difficult by governments that "don't meet their responsibilities." "Our job is not to remedy the errors of politicians," he said.
ZeroHedge vahendusel Itaalia võlakirjade struktuur ja intresside maksekohustused ning teemast laiemalt.
ZH teooria kohaselt on Berlusconi mõistnud, et tuleb küll ECB päästma, rääkigu mida soovivad.
Update (0845 UK time) Also, just a bit on additional margin for Italian bonds at clearinghouses… There’s been some focus on the 450bps spread “trigger” for margin on sovereign risk, applied to trades going through RepoClear at LCH Clearnet Ltd. It’s important to reiterate that this isn’t the spread of Italian debt to Bunds (which is already far north of 450bps) but to a specific benchmark index of French, German and Dutch debt. This spread remains at 419bps. Even then, that’s LCH Clearnet Ltd. LCH Clearnet SA is directly connected to the domestic Italian bond market by contrast so it’s difficult to generalise about how fresh repo margins would impair demand for Italian debt: facilities for clearing this debt are diverse. In any case it’s a bit of a red herring. At these levels (and volatility) quite simply Italian government debt is dying because real money investors are staying well away. Same as it was in July when Italy paper first jumped off a cliff, same as it is now.
