Financial warfare being waged against Italy

[suffragette]

Anyone else noticing the descriptions of the way the financial sector is treating Italy is being described in warlike terms?


Does Italy Deserve Bond Vigilante Attack?
http://www.cnbc.com/id/43735901

Italy flays ‘speculative attack’ as EU stocks tank
http://www.hindustantimes.com/Italy-flays-speculative-attack-as-EU-stocks-tank/Article1-720346.aspx

Has The ECB Left The Italian Rearguard Wide Open To Speculative Attack?
http://www.businessinsider.com/has-the-ecb-left-the-italian-rearguard-wide-open-to-speculative-attack-2011-7


Italy MPs struggle to hold back eurozone debt crisis
By David Willey
BBC News, Rome

http://www.bbc.co.uk/news/world-europe-14124603

Silvio Berlusconi has said Italy is "in the front lines of an economic battle"

Under persistent attack by speculators on international bond and security markets, Italian politicians are scurrying to improve their image at home and abroad, and their country's financial credibility.

Embattled Economics Minister Giulio Tremonti dashed back to Rome on Tuesday - abandoning an EU finance ministers' meeting in Brussels - to confer with the government and opposition leaders about his proposed 40bn euro (£35bn; $56bn) austerity package, which was unveiled to howls of protest by industrialists and workers alike two weeks ago.

~~~


People phoning in to a radio talk show on the state broadcaster RAI on Tuesday were alternately panicky and angry at the government for failing to come to grips with the dire economic picture being painted every day in the local media. "If we are the victims of speculators in both near and distant countries, can this be called democracy?" one woman listener asked.

[MADem]

1. Probably because Hairplugs Silvio is encouraging that sort of language

Silvio Berlusconi has said Italy is "in the front lines of an economic battle"....

[sabrina 1]

'Weapons of Economic Destruction'. That is what have been

used to bring down the world economy. They are at war with the people of nearly every country in the world. I guess Berlusconi is just being honest about it.

[suffragette]

12. I think it's more about financial sharks circling Italy

and less about any language Berlusconi is wanting used.

I can't stand Berlusconi, but I feel for the Italian people who are suddenly being shoved into a similar leaky boat of austerity next to the ones of the Greeks and Irish and these boats are surrounded by and being pounded by financial sharks smelling the blood in the water.

[FLAprogressive]

15. and guess what, we're next!

[suffragette]

17. That's sure what it looks like which is why I think it's crucial

to look at what's been happening there as well as indications it will happen soon here..

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1458909#1459213

[dkf]

2. Well at least the vigilantes are occupied there.

And not here.

[sabrina 1]

3. You think so?

[dkf]

4. They start with the most vulnerable then work their way up.

We are farther up in quality but they'll get to us one day.

[sabrina 1]

5. We just had an economic meltdown that cost this country

trillions. I'm not sure that's being farther down the list. The current 'budget battle' is an attempt to implement the same 'austerity/share the sacrifice' policies being implemented in European countries. They've dropped the 'austerity' language here, although I do still hear the 'share the sacrifice' propaganda from time to time.

We are imo, at the top of the list. It will depend on Democrats to make sure they do not succeed.

[dkf]

6. Oh they were going for the banks alright.

But not the treasuries.

[sabrina 1]

8. I'm not sure what you mean by that.

'Going for the banks'? The banks should have been allowed to fail, imo. It was all about saving them at the expense of the American people. Which makes it the same game being played in Europe, Italy and elsewhere. It's all about the Banks. Only one country has refused to bail them out, and oddly, it is the only country whose economy is on the rebound.

[xchrom]

7. +1

[suffragette]

13. You mean the ones like Tepper who cashed in on the bank bailout?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1388416&mesg_id=1390874

Maybe for the moment but that kind of greed is not sated for long.

[dkf]

18. Pension plans invest in hedged funds you know.

That is where the money is...institutions.

[suffragette]

19. Looks to me like the money is siphoned to a few's pockets

Regulation would help with that, but prosperity for a few at the immense sacrifice of austerity for many is what is being done with those pensions being raided by the same people creating these "crises."

[dkf]

20. Desperate Public Pension Funds Double Bets in Hedge Funds

http://m.cnbc.com/id/43419144/Desperate_Public_Pension_Funds_Double_Bets_in_Hedge_Funds

Public pension funds managing the retirement and health care benefits of teachers and firemen are pouring money into hedge funds, as much as doubling the money they allocate to the industry, in a desperate attempt to bridge the funding gap in their plans.

“Our team met with several public pension plans, representing in excess of $200 billion in assets under management,” stated a Deutsche Bank prime brokerage report intended for hedge fund clients obtained by CNBC. “Many of these are planning to double their hedge fund allocations over the next 12 to 18 months.”

[sabrina 1]

22. Do ordinary people have any say in this? I know a teacher in

Texas whose pension funds were invested in Enron, along with many others. And everyone knows what happened to those people. He did not have any say in where his pension funds were invested.

Deutsche Bank? I would not put $100.00 in that Bank.

[badtoworse]

23. Just out of curiosity, why not?

[dkf]

25. Through their union i imagine.

They are beneficiaries after all so whoever runs their funds has an obligation to them.

[suffragette]

30. So, they are using other people's pension funds for this gambling?

That's even worse news, I think.
http://www.reuters.com/article/2011/07/06/uk-hedge-fund-giants-are-coming-up-small-idUSLNE76502920110706

As Sabrina noted below, Enron comes to mind.

edit to add people's

[dkf]

21. Pension funds pump 55% more into hedge fund strategies

Direct investment in hedge funds was up 75.6% to $77.8 billion, while hedge fund-of-funds investments increased 20.8% to $31.9 billion, according to Pensions & Investments' survey of the largest U.S. retirement plan sponsors.

Part of the enormous growth in hedge fund assets in P&I's 2010 survey is the result of more complete reporting by 10 corporate and public pension funds. Those new plans added an aggregate $17.7 billion to P&I's hedge fund investor rankings over the previous survey period.

http://www.pionline.com/article/20110207/PRINTSUB/302079989

[pampango]

9. Poor little right-wing Silvio. Sure would be a shame if Italian decided they are better off with

someone more progressive leading their country. Silvio has been prime minister for 8 of the last 10 years, so it's no wonder he would like to blame Italy's woes on foreigners. Surely his own right wing policies can't be to blame. (I'm sure Bush would like to blame our economic problems on someone else also.)

"...proposed 40bn euro (£35bn; $56bn) austerity package, which was unveiled to howls of protest by industrialists and workers alike two weeks ago."

Sounds like his proposed "austerity package" is not going over very well on the left of the right.

[suffragette]

16. Supposedly Berlusconi and his Financial Minister are not in agreement about the austerity

I hate Berlusconi but think this is about much more than him and feel for the Italian people in this situation.

Greece and Spain don't have right-wing governments, but they are being subjected to a similar process.

Greece first, then Spain and Ireland, now Italy.

The austerity and privatization measures, which I am opposed to, look to be in large part agreed to by the G20 last year. The target dates being put out there of 2013 and 2014 are from the G20's general calendar for this, with some room having been given for different countries doing this at different times, but overall in accord with the general timeline proposed:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1458909#1459213

And where for the people it is crisis, the financiers are viewing opportunity:

http://www.morningstar.co.uk/uk/markets/newsfeeditem.aspx?id=148573656399845
Some investors are ratcheting up bets on how much Europe's companies and single currency will struggle as fears mount that bigger economies like Italy and Spain could succumb to the region's confidence crisis.

~~~
"Europe is offering a lot more opportunities for hedge funds," says Louis Gargour, chief investment officer at LNG Capital, whose fund is up 8.5% this year.


http://www.business-standard.com/india/news/hedge-funds-betwider-european-debt-crisis/441976/

Hedge funds had been reluctant to discuss any bearish trades they made for fear of sparking protests from regulators who view the investors as vultures. On July 5, European lawmakers called for restrictions on traders’ uses of credit- default swaps to profit from failures on sovereign debt they don’t own. Credit default swaps are a type of insurance that makes investors whole if a borrower fails to pay.

Now that an immediate Greek default has been avoided, investors are looking for ways to play continued distress among countries including Italy, the euro-area’s third-largest economy, and Spain, its fourth. The extra yield investors demand to hold Portugal’s 10-year bonds over German bunds slipped 41 basis points today to 974 basis points from a euro-era record of 1015 basis points yesterday, when Moody’s cut the country’s credit rating four levels to Ba2, below investment grade.

http://seekingalpha.com/article/279403-warnings-from-greece-beware-the-successful-italian-bonds-auctions
It seems like the market is enjoying the "success" of the Italian bond auctions.


http://www.expatica.com/es/news/spanish-news/-no-logic--to-market-pressure-on-spain-italy-minister_162515.html
'No logic' to market pressure on Spain, Italy: minister

Spain's Finance Minister Elena Salgado said Tuesday there was no logic to the market turmoil swirling around Spain and Italy because both countries had strong economies.
Long-term interest rates spiked and stocks dropped heavily in Italy and Spain amid fears of contagion from the eurozone sovereign debt crisis. The euro skidded, too.
"There is no logic to Spain or Italy being affected by the market instability," Salgado told Spanish radio Cadena Ser.
"We have strong, diversified economies which have always faced up to the problems and so if we are capable of transmitting that determination to everyone, reasonably the markets have to calm down."


As someone who's not an economist, I've been trying to understand these machinations and keep coming back to G20 pushing the austerity and privatization and the financiers both pushing the countries over the edge and cashing in, just as they did with the bank bailout.
People like Tepper, who profit from this disaster capitalism:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1388416&mesg_id=1390874

[sabrina 1]

27. I just read today that Greece is going to default anyhow.

So, the 'penal austerity' program forced through just a few days ago, did nothing to stop the default. Now they are all fighting over how to prevent it from affecting the rest of Europe.

Seems like maybe they should be looking for whoever caused this. Failure of this magnitude should not go unpunished imo. And where did the money go?

I see the same formula for Italy, selling off its 'assets' also. They are creating financial havoc, then rushing in to buy up countries at bargain basement prices.

Who needs armies anymore?

[suffragette]

32. They are creating "financial havoc"

in which some profit while the people pay the true cost.


I wonder if they are still going to sell off Greece's public assets with a default looming. Looks like by agreeing to the austerity plan, they are getting the worst possible outcome.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201107131158dowjonesdjonline000416&title=imf-temporary-greek-default-possible-but-private-sector-help-appropriate

MF: Temporary Greek Default Possible, But Private Sector Help Appropriate


By Ian Talley, OF DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- A temporary Greek default may be unavoidable if private bondholders voluntarily participate in a new financing program for the beleaguered country, the International Monetary Fund said Wednesday.



The "if" in that sentence caught my eye. If written correctly, then the private financiers participation is what is causing the new situation?

[Starry Messenger]

10. Class war.

It is real war.

[leveymg]

11. It will become a real war, if the people continue to lose the economic and political rounds

This can lead to a bloody shooting war in the ruins of several nation states, like 1919.

[MADem]

26. I don't think "will" is the best word, but your thesis is not outside the realm of possibility.

It is a sad truth that war is good for economies. It fires up the winning team, and even the losers get a little postwar bounce, generally speaking.

[pampango]

14. The only class war Silvio would lead would be on behalf of the rich. n/t

[suffragette]

31. Sure does look that way Starry.

Thanks for your response.

[KamaAina]

24. Find out which EU (Esp. German) politicos stand to benefit from an Italian (or Greek) default

like our very own Eric Cantor would from a U.S. default resulting from not reaising the debt ceiling.

[sabrina 1]

28. That would be interesting to know.

[suffragette]

29. That would be good to know. On the bank side, I also

wonder if Ackerman will be benefiting as he has from Greece:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1344099&mesg_id=1344717