Quitaly - the Italians are next
Discussion
Otispunkmeyer said:
Related perhaps, I was reading a piece on that Steve Eismann guy (immortalised in the big short and by the billion dollars he made shorting sub prime mortgage bonds) and he's turned his attention to his next big short strategy... Italian banks. Banks with masses of non-performing loans on their books marked at what he thinks is too high a value. He reckons these loans are almost worthless but are on the books at 50 cents on the dollar.
Be interesting to see if he is right and pulls the same trick again.
If the film is anything to go by, his position was based on one thing alone; raw data. His strategy was to realise the markets could remain irrational for a long time, but not forever.Be interesting to see if he is right and pulls the same trick again.
I guess being short on Italy still does not, necessarily, equate to being short on the Euro; that in some way, shape or form, the currency will continue to be used, just perhaps by fewer and fewer economies as the weak drop out.
Enricogto said:
Where my thoughts are different is whether Italy would benefit from leaving the Euro, and here my answer is no. What Italy would need the most at the moment is a proper, well-thought simplification of the tax system, a public sector diet and an improvement of the legal system to make the resolution of disputes, especially business-related ones, faster and more efficient. Being in the Euro provides at the moment, the "discomfort" that could prompt reforms in that direction. Leaving the Euro would mean extreme uncertainty and possible mayhem (look at the uncertainty arising from Brexit, then multiply by 1000). In the long run, assuming that the benefits of a devaluated Lira would materialize, the newly found equilibrium would reintroduce the dreadful practices from late '80s/early '90s that inflated public debt and political mismanagement.
That's a fair point, and the reforms proposed in this current referendum would take the country a step closer to someone (or party) if so minded being able to achieve what you say.I think though that the media outside Italy are extrapolating too much when they say a defeat in this referendum would lead to Italy leaving the EU, the Euro or whatever, let alone trigger some sort of cataclysmic collapse of European institutions. The question is very much domestic and related to political procedure.
r11co said:
Enricogto said:
Where my thoughts are different is whether Italy would benefit from leaving the Euro, and here my answer is no. What Italy would need the most at the moment is a proper, well-thought simplification of the tax system, a public sector diet and an improvement of the legal system to make the resolution of disputes, especially business-related ones, faster and more efficient. Being in the Euro provides at the moment, the "discomfort" that could prompt reforms in that direction. Leaving the Euro would mean extreme uncertainty and possible mayhem (look at the uncertainty arising from Brexit, then multiply by 1000). In the long run, assuming that the benefits of a devaluated Lira would materialize, the newly found equilibrium would reintroduce the dreadful practices from late '80s/early '90s that inflated public debt and political mismanagement.
That's a fair point, and the reforms proposed in this current referendum would take the country a step closer to someone (or party) if so minded being able to achieve what you say.I think though that the media outside Italy are extrapolating too much when they say a defeat in this referendum would lead to Italy leaving the EU, the Euro or whatever, let alone trigger some sort of cataclysmic collapse of European institutions. The question is very much domestic and related to political procedure.
The propesed changes to the constitution are comical. There should be 2 sides: people who are going to vote YES to the changes and people who have actually read the revised 47 articles of the constitution who just can't vote other than NO.
Seriously I read all the revisions, it is a mess. Sadly all the Italian and International media talk only about consequences of the result that, by the way, are in large part absolutely unreliable forecast.
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
Anyway I am not that worried, if the Italy is going to leave the EU or the Euro I will move back again to France or Germany, I really prefer being paid in EURO...
Seriously I read all the revisions, it is a mess. Sadly all the Italian and International media talk only about consequences of the result that, by the way, are in large part absolutely unreliable forecast.
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
Anyway I am not that worried, if the Italy is going to leave the EU or the Euro I will move back again to France or Germany, I really prefer being paid in EURO...
matsoc said:
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
An interesting point of view, although quite selfish if I might say so. So you don't care about your fellow Italian citizens' lives being destroyed, the mass unemployment, the lost jobs, the personal misery, that the youngest and brightest are forced to leave and find work abroad, the political upheaval which threatens to break the nation in half? And all caused by the Euro doomsday machine...Still, so long as you're okay what does it matter?
Andy Zarse said:
matsoc said:
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
An interesting point of view, although quite selfish if I might say so. So you don't care about your fellow Italian citizens' lives being destroyed, the mass unemployment, the lost jobs, the personal misery, that the youngest and brightest are forced to leave and find work abroad, the political upheaval which threatens to break the nation in half? And all caused by the Euro doomsday machine...Still, so long as you're okay what does it matter?
Andy Zarse said:
matsoc said:
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
An interesting point of view, although quite selfish if I might say so. So you don't care about your fellow Italian citizens' lives being destroyed, the mass unemployment, the lost jobs, the personal misery, that the youngest and brightest are forced to leave and find work abroad, the political upheaval which threatens to break the nation in half? And all caused by the Euro doomsday machine...Still, so long as you're okay what does it matter?
The long lost jobs are mostly related to productions and industries that in the XXI century are no longer those of a 1st world economy. In a similar fashion you could then argue that welsh miners' jobs were a victim of the resolution by Thatcher to maintain the pound instead of fully adopting the Euro? The answer is no, and similarly you could argue that all they issues you mentioned have always been there, just hidden by the ability to devalue the currency at will. A bit like removing a steroids treatment makes autoimmune diseases manifest. The solution is to change, reform and innovate, all things that are possible within the EU.
stripy7 said:
Andy Zarse said:
matsoc said:
Anyway about the Euro I am for remain, I hope there is no way we are going back to our currency. Yes, it will bring back more jobs and growth but being in the Euro has created a postive filter and fueled expansions of the best companies. I work in a company that 10 years was 10 times smaller and had factories just in Italy, now has factories all over Europe and also in India and Brazil. Acquisitions wouldn't have been possible with the old lira currency. Yes, in the mean time a quarter of Italian Industries no longer exist but the best survived and grew.
An interesting point of view, although quite selfish if I might say so. So you don't care about your fellow Italian citizens' lives being destroyed, the mass unemployment, the lost jobs, the personal misery, that the youngest and brightest are forced to leave and find work abroad, the political upheaval which threatens to break the nation in half? And all caused by the Euro doomsday machine...Still, so long as you're okay what does it matter?
To be fair, many voters on both sides of the UK referendum (I think) set aside personal benefit to look at the bigger picture for the country. Take me for example. I have a wife and kid who are both immigrants to the UK from the EU, and not UK citizens. Technically, it is possible Brexit could see them expelled. And yet, knowing this, when I was in the voting booth my conscience just would not let me tick Remain (please don't tell the missus
)Andy Zarse said:
To be fair, many voters on both sides of the UK referendum (I think) set aside personal benefit to look at the bigger picture for the country. Take me for example. I have a wife and kid who are both immigrants to the UK from the EU, and not UK citizens. Technically, it is possible Brexit could see them expelled. And yet, knowing this, when I was in the voting booth my conscience just would not let me tick Remain (please don't tell the missus )
)
To be honest all this referendum talk is just not what Italy needs. Imo the biggest problem that Renzi needs to address urgently is all these thousands of immigrants that are make the lives of Italian citizens a nightmare, they are living in fear. Milan even has the army on the streets as there are parts of the town out of control, yet alone Turin and Rome. What a f
king disgrace, Renzi needs to help the italians now.
king disgrace, Renzi needs to help the italians now.cayman-black said:
To be honest all this referendum talk is just not what Italy needs. Imo the biggest problem that Renzi needs to address urgently is all these thousands of immigrants that are make the lives of Italian citizens a nightmare, they are living in fear. Milan even has the army on the streets as there are parts of the town out of control, yet alone Turin and Rome. What a fking disgrace, Renzi needs to help the italians now.
It seems a recurrent theme throughout the EU. Obviously, places like Italy and Greece cop worse deals by being on the EU frontline, but the ripples are felt in Germany, UK, France, Sweden nonetheless.king disgrace, Renzi needs to help the italians now.The lack of understanding of the risk and the failure to devise a realistic plan for this dynamic exposes the worst of the EU; sclerotic, clunking bureaucracy and imperious disdain. Ironic that this would seem to be one of the key drivers of the Brexit vote. If the EU was more dynamic and understanding, and if the immigration situation was managed to assuage fears, Brexit need never have happened.
Enricogto said:
... The solution is to change, reform and innovate, all things that are possible within the EU.
I guess if you want to change, reform and innovate to an economy that is on its arse, Germany doing really well out of it and youth unemployment running at 39%,the third worst in the EU, then the EU really is for you. I can see why others in Italy might want a different sort of change.
Digga said:
MarshPhantom said:
Do you not think Italy and Ireland might want to see how things go for or us before deciding to leave?
Not necessarily. Both countries have the backbone to do what they feel is best for themselves. They don't need the UK to show them the way.Paddy_N_Murphy said:
davepoth said:
Digga said:
MarshPhantom said:
Do you not think Italy and Ireland might want to see how things go for or us before deciding to leave?
Not necessarily. Both countries have the backbone to do what they feel is best for themselves. They don't need the UK to show them the way.I posted this a week ago but relevant here.
David McWilliams said:
The Bangladeshi selfie-stick hawkers are doing a brisk trade outside the Colosseum. Local chain-smoking lads dressed as gladiators prey on vulnerable tourists, while portly priests on their annual visit to Catholicism’s corporate HQ take time out from soul-searching.
Even the heavily armed soldiers, there to protect against a potential Italian Bataclan, are smiling in the Mediterranean sunshine. And as it is midday in Italy, everyone is checking out everyone else.
All looks quite normal, chilled out and as it should be.
But it is not. Italy is a country going through what could be described as a nervous breakdown.
After a decade of almost no economic growth, in two weeks Italians will vote in a referendum which will determine what direction this huge country of nearly 60 million people will take. The result will profoundly affect the EU.
Although the referendum is technically about the way Italy is governed, the country is split down the middle in a plebiscite that has come to symbolise something much bigger. Once again, like the Brexit vote and the Trump election, this referendum is about insiders against outsiders. It is about those who are the victims of inequality and globalisation and those who uphold the status quo.
On one side, you have the Italian political elite — the insiders embodied by Matteo Renzi, the youthful prime minister. He represents the people and institutions that have ruled Italy for decades.
On the other side, you have an unusual anti-EU coalition, the Left and the Right — the ‘Outsiders’ — who are united by a common belief that, after 10 years of economic stagnation, there must be another way.
We have the same picture we saw in the UK in June and in the US last week, where an elite is desperately trying to connect with the people and large swathes of the population are saying they have had enough.
In terms of the big picture, the Italian election can be seen as yet another domino in a year of falling dominos. First we had Brexit, then Trump, and the next big one for Europe after Italy is the potential rise of Le Pen in France.
Italy is the triplet in a quartet that will culminate in France, and, in my opinion, if the Italian elite loses on December 4th, Marine Le Pen will win in France.
This is a global phenomenon that can’t be seen in national terms but only in international terms. This is what happens in politics; what starts as a feeling becomes a reality at the ballot box, not least because every election that goes against the elite gives “permission” for the next bunch of popular ‘Outsiders’ to scent victory.
Ms Le Pen has said she will pull out of the euro the morning after she wins. There’s no delaying Article 50 in her book. The Front National’s policy is an immediate withdrawal from the euro for France. In Italy, the two main parties backing a No vote in the referendum, the left-wing Five Star Movement and the right-wing Northern League, both want Italy to leave the euro and reinstate the lira. Right now, the only consolation for the elite is that they are behind in the polls; anyone who wants to win an election may be better off trailing in the polls!
But the reality for Italy (as for many countries, including Ireland) is that the euro has been a disaster. For years Italy, the Eurozone’s third largest economy, was pre-eminent in fashion, design, sophisticated manufacturing and car-making. All this was predicated on periodic devaluations of the lira against the deutsche mark, which allowed Italy to compete. This was the deal and everyone broadly understood it.
Once Italy joined the euro, this traditional avenue was closed off to Italian industry and it started to become uncompetitive. Italian industry couldn’t compete with Germany and, as Europe’s biggest debtor, Italy began to lose control over its own destiny. Following the last euro crisis, Italy has become, from a macroeconomic point of view, little more than a protectorate of Germany. And it hurts.
Young Italians have less chance of getting a job than almost any other nationality in Europe. Unemployment for the under thirties is running at a staggering 35%. Seven out of 10 Italians under the age of 36 live with their parents and 100,000 educated Italians left the country in search of work last year.
Real wages have stagnated and corporate Italy is not investing. All the while, the debt-to-GDP ratio – the highest in Europe – is going in the wrong direction.
Is it any wonder, with this sort of economic performance, that people want an alternative?
Could Italy turn its back on the EU? Of course it could. In fact, why wouldn’t it? Any country that can change sides in a world war is politically capable of changing its currency, don’t you think?
It’s clear when you are in Rome that something serious is going on. Behind the designer sunglasses, the impeccable three-day stubble, and the beautifully coiffed hair, Italy is deeply divided. Italy is experiencing, as was the case in Britain and in America, a popular insurgency.
Far-off Brussels is firmly in ostrich mode, head stuck in the ground, planning a hard Brexit to teach other “deplorables” a lesson. But what it doesn’t understand is that ‘Deplorable Lives Matter’!
And — worse for the EU that has proved itself to be electorally tone deaf time and again — deplorables vote too.
Mr Renzi, the EU’s man, asked for looser fiscal rules, but Germany vetoed it. Mr Renzi asked to be allowed to bail out his bust banks, but Germany refused.
Now Italy is about to embolden Ms Le Pen in France, and who is to blame?
Clearly not the Italians who are expressing their democratic wish, but the EU officials who didn’t listen to Mr Renzi, their Roman legate, when he looked for help.
As I marvel at the Colosseum, I can’t help thinking that Vespasian, the Roman Emperor who built the Colosseum and conquered Britain in the west and Judea in the east, would never have left one of his own with so little ammunition to fight a popular insurrection.
Even the heavily armed soldiers, there to protect against a potential Italian Bataclan, are smiling in the Mediterranean sunshine. And as it is midday in Italy, everyone is checking out everyone else.
All looks quite normal, chilled out and as it should be.
But it is not. Italy is a country going through what could be described as a nervous breakdown.
After a decade of almost no economic growth, in two weeks Italians will vote in a referendum which will determine what direction this huge country of nearly 60 million people will take. The result will profoundly affect the EU.
Although the referendum is technically about the way Italy is governed, the country is split down the middle in a plebiscite that has come to symbolise something much bigger. Once again, like the Brexit vote and the Trump election, this referendum is about insiders against outsiders. It is about those who are the victims of inequality and globalisation and those who uphold the status quo.
On one side, you have the Italian political elite — the insiders embodied by Matteo Renzi, the youthful prime minister. He represents the people and institutions that have ruled Italy for decades.
On the other side, you have an unusual anti-EU coalition, the Left and the Right — the ‘Outsiders’ — who are united by a common belief that, after 10 years of economic stagnation, there must be another way.
We have the same picture we saw in the UK in June and in the US last week, where an elite is desperately trying to connect with the people and large swathes of the population are saying they have had enough.
In terms of the big picture, the Italian election can be seen as yet another domino in a year of falling dominos. First we had Brexit, then Trump, and the next big one for Europe after Italy is the potential rise of Le Pen in France.
Italy is the triplet in a quartet that will culminate in France, and, in my opinion, if the Italian elite loses on December 4th, Marine Le Pen will win in France.
This is a global phenomenon that can’t be seen in national terms but only in international terms. This is what happens in politics; what starts as a feeling becomes a reality at the ballot box, not least because every election that goes against the elite gives “permission” for the next bunch of popular ‘Outsiders’ to scent victory.
Ms Le Pen has said she will pull out of the euro the morning after she wins. There’s no delaying Article 50 in her book. The Front National’s policy is an immediate withdrawal from the euro for France. In Italy, the two main parties backing a No vote in the referendum, the left-wing Five Star Movement and the right-wing Northern League, both want Italy to leave the euro and reinstate the lira. Right now, the only consolation for the elite is that they are behind in the polls; anyone who wants to win an election may be better off trailing in the polls!
But the reality for Italy (as for many countries, including Ireland) is that the euro has been a disaster. For years Italy, the Eurozone’s third largest economy, was pre-eminent in fashion, design, sophisticated manufacturing and car-making. All this was predicated on periodic devaluations of the lira against the deutsche mark, which allowed Italy to compete. This was the deal and everyone broadly understood it.
Once Italy joined the euro, this traditional avenue was closed off to Italian industry and it started to become uncompetitive. Italian industry couldn’t compete with Germany and, as Europe’s biggest debtor, Italy began to lose control over its own destiny. Following the last euro crisis, Italy has become, from a macroeconomic point of view, little more than a protectorate of Germany. And it hurts.
Young Italians have less chance of getting a job than almost any other nationality in Europe. Unemployment for the under thirties is running at a staggering 35%. Seven out of 10 Italians under the age of 36 live with their parents and 100,000 educated Italians left the country in search of work last year.
Real wages have stagnated and corporate Italy is not investing. All the while, the debt-to-GDP ratio – the highest in Europe – is going in the wrong direction.
Is it any wonder, with this sort of economic performance, that people want an alternative?
Could Italy turn its back on the EU? Of course it could. In fact, why wouldn’t it? Any country that can change sides in a world war is politically capable of changing its currency, don’t you think?
It’s clear when you are in Rome that something serious is going on. Behind the designer sunglasses, the impeccable three-day stubble, and the beautifully coiffed hair, Italy is deeply divided. Italy is experiencing, as was the case in Britain and in America, a popular insurgency.
Far-off Brussels is firmly in ostrich mode, head stuck in the ground, planning a hard Brexit to teach other “deplorables” a lesson. But what it doesn’t understand is that ‘Deplorable Lives Matter’!
And — worse for the EU that has proved itself to be electorally tone deaf time and again — deplorables vote too.
Mr Renzi, the EU’s man, asked for looser fiscal rules, but Germany vetoed it. Mr Renzi asked to be allowed to bail out his bust banks, but Germany refused.
Now Italy is about to embolden Ms Le Pen in France, and who is to blame?
Clearly not the Italians who are expressing their democratic wish, but the EU officials who didn’t listen to Mr Renzi, their Roman legate, when he looked for help.
As I marvel at the Colosseum, I can’t help thinking that Vespasian, the Roman Emperor who built the Colosseum and conquered Britain in the west and Judea in the east, would never have left one of his own with so little ammunition to fight a popular insurrection.
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