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Financial crisis: Italy could tip euro into abyss + Sharemarket set for 'wild ride'

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posted on Aug, 6 2011 @ 08:07 PM
So sharemarkets tomorrow (AEST) are gonna get walloped by a double whammy?

Financial crisis: Italy could tip euro into abyss

The relentless plunge of financial markets will lurch into a more dangerous phase that could take the global economy over the brink of disaster, unless the European Central Bank starts to buy up Italian debt.

The eurozone's central bank has not yet clearly signalled it is ready to move to buy up Italy's stressed government bonds amid deep divisions and opposition led by Germany's Bundesbank.

As European stock markets racked up their biggest losses for three years on Friday, Italy's government was forced into rash promises it might not be able to keep.

The alternative to pledging the rapid imposition of bitterly opposed spending cuts, as one Italian minister observed this weekend, was for Italy's government bonds to become as worthless as waste paper when the markets open on Monday.

Sharemarket set for 'wild ride'

THE Australian sharemarket is expected to suffer another horror day tomorrow after rating agency Standard & Poor's downgraded the US's credit rating and issued a scathing critique of Washington's ability to deal with its economic woes....

As Washington absorbed the demoralising decision, the downgrade was expected to send shockwaves through global financial markets still reeling from a volatile week fueled by concerns over a worsening debt crisis in Europe. Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy will call an emergency G7 meeting this week to discuss measures to tackle the debt woes destabilising European economies.

I wondered if people where hoping that the downgrade was already priced into the sharemarket with the recent activity we seen. Perhaps that was concerns over the Eurozone crisis? Which, incidentally, continues to worsen particularly Italy in focus. I guess this week will tell what further damage the downgrade, together with the Euro crisis, will wreak, and perhaps any other triggers that is anyone's guess at the moment.

posted on Aug, 6 2011 @ 08:20 PM
I don't think we will see so much blood on the floor this week.
Lets see, how the 'big guys' trade markets.

posted on Aug, 6 2011 @ 09:40 PM
reply to post by surrealist

There arent enough SDR's to go around. Yes and to add Italy and Spain to the list. Europe is being held together with duct tape!

posted on Aug, 6 2011 @ 10:25 PM
reply to post by wonderworld

Not even real duct tape, it's the generic brand!

Whether it's the IMF or the ECB Italy is now doomed to severe Greek style reductions in spending, axing mostly social programs...

I expect riots and strikes across Italy next week.

I've also heard rumors that the ECB may push for Euro consolidated Bonds, essentially taking the sovereign debt from actual Nations and making it a Federal matter..

Europe you've been warned .. destroy the EUR and the ECB or face the eventual certainty that disasters will be used as a proxy to destroy national rights and consolidated a Federalist system in Europe. you DONT want to be like America!

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