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ZeroHedge
Baseline Scenario
Managing that portfolio is Maria Cannata’s job, the public officer in charge of selling Italian government bonds on the market.
Possible reasons for optimism on Italian treasuries:
Let’s hope for the best, June and August 2010 are the worst months in terms of redemption of Italian government bonds, with over €45 billion coming due.
Why Italy could even say “our debt, your problem”. We have a primary surplus!
When Italian bonds come due, a little front-loaded … via The European Crisis In Eight Simple Charts | zero hedge
Hot Italian summer coming via Surging Libor-OIS And Cross Currency Basis Swaps Indicate Europe’s Response Is Too Little Too Late
After reading Citigroup Global Market Report “Sovereign Debt Problems in Advanced Industrial countries” and the BIS working paper “The future of public debt: prospects and implications (pdf)”, I feel a little better about Italy, mostly because we have a primary (i.e. before interests) budget surplus, we didn’t overspend in stimulus programs and age-related government spending has been in part already reformed (see image below).
Finally, if worse comes to worse, a primary budget surplus also means that Italy does not need to tap capital markets after a unilateral default on the debt mountain.
CDS of Italian banks 30-40 bps below sovereign CDS. via Playing The Contagion II: Goldman Recommends Betting On Contagion Risk In Portuguese, Spanish And Italian Banks | zero hedge
Greece’s (and Italy’s) addiction to corruption is undermining the credibility of the whole Eurozone.
