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Italy Back In Spotlight After S&p Says One In Three Chance It Will Cut Ratings In Next 24 Months

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http://www.zerohedge.com/article/italy-back-spotlight-after-sp-says-one-three-chance-it-will-cut-ratings-next-24-months

Despite Announced Austerity Measures, Italy Still Faces Substantial Risks To Debt Reduction

The Italian government has introduced additional fiscal measures for 2011-2014.

Italy's weak growth outlook remains the key downside risk to the government's debt reduction plan.

LONDON (Standard & Poor's) July 1, 2011--Yesterday, the Italian government introduced additional fiscal austerity measures that aim to reduce the general government deficit by €47 billion (3% of 2011 GDP) by 2014. Despite these measures, however, we believe substantial downside risks to the government's debt-reduction plan remain, primarily due to Italy's weak growth prospects.

So after fixing Greece we still seem to find more holes that need plugging.

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Italy is greece lite.

All the loss of competitiveness which fubar'd the greeks italy has also suffered, just on a (for now) lesser scale. The gap between the two will continue to widen as germany continues to increase its productivity faster than do the italians. Give it a few more years and italy will be as bust as greece.

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could be a lot of work for young dutch lads in the not too distant future............

Angela Knight says Dutch benefits are too generous for the lads to take that kind of work. It's a job for the dykes.

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http://www.zerohedge...-next-24-months

So after fixing Greece we still seem to find more holes that need plugging.

Given what's happened in the last few years, why does anyone give a stuff about what ratings agencies say?

The impression I get is that lenders lend on the basis of the rating supplied by these agencies. However that rating is always reactive e.g. that's how it is now. Has nothing to do with how it will be then when the loan needs paying back. Surely a loan should be based on some semblance of history (Greece: not good) and a forecast of the future (go back to 2006; again, Greece: not good)

What is it that compels financial institutions to take any notice?

Or are the ratings agencies simply part of the game: that is, to push debt, whether affordable or not?

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Given what's happened in the last few years, why does anyone give a stuff about what ratings agencies say?

The impression I get is that lenders lend on the basis of the rating supplied by these agencies. However that rating is always reactive e.g. that's how it is now. Has nothing to do with how it will be then when the loan needs paying back. Surely a loan should be based on some semblance of history (Greece: not good) and a forecast of the future (go back to 2006; again, Greece: not good)

What is it that compels financial institutions to take any notice?

Or are the ratings agencies simply part of the game: that is, to push debt, whether affordable or not?

The FED are using the rating agencies to lob a Euro directed stink bomb into the money pits to hide the stench emanating from the US. Without this action the dollar hegemony dies and the ZIRP policy implodes.

Ratings agencies made a ton of money in commissions rating all the crap dururing the noughties.

All markets are becoming increasingly fake and driven implictly by moneytary policy or promises of more QE (or otherwie) and more low rates and cheap money. One day either the stockmarket, commodities market or treasuries market will implode, the gearing is rising, the level of investment diminishing and HFT trading dictating the lot. Even more unstable than before 2008.

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The FED are using the rating agencies to lob a Euro directed stink bomb into the money pits

Lately, they do appear to target the next country for a hit. And they do have power.

Downgrades trigger all sorts of nasties for nations, innocuously called 'credit events'.

There are plenty of equally indebted countries, so how did Italy become the next in line? Wasn't it supposed to be Spain? Or might the indignati - plus the 20 plus percent unemployed - create another round of bad publicity for banks?

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Lately, they do appear to target the next country for a hit. And they do have power.

Downgrades trigger all sorts of nasties for nations, innocuously called 'credit events'.

There are plenty of equally indebted countries, so how did Italy become the next in line? Wasn't it supposed to be Spain? Or might the indignati - plus the 20 plus percent unemployed - create another round of bad publicity for banks?

Yes they do have power, rightly or wrongly. Regulated funds are often obliged to invest in a portion of their monies into bonds with a certain rating. Change that rating and suddenly a huge amount of demand for those bonds is stripped from the market place.

Dont Politicians realise that a forced buyer or seller always gets a much worse price for what they are trading in?

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Italy is fecked.

One reason:

(Reuters) - Italy has developed increasingly close ties with former colony Libya in recent years.

Flush with petrodollars, Libya has been buying stakes in Italian companies, while Italian companies have clinched contracts for energy and infrastructure projects in the North African state. Libya supplies a quarter of Italy's crude oil needs, and is also a key provider of gas.

Following is a list of Libya's main Italian investments and Italian companies with investments in Libya.

ENI

Italy's biggest oil and gas company has extensive operations in Libya, including long-term take-or-pay contracts. The company, which has operated in Libya since 1959, has said it plans to invest as much as $25 billion there. Libya accounts for about 13 percent of its entire production.

Libya has also expressed its interest in buying a stake in Eni, but has not specified how much it holds.

IMPREGILO

Italy's biggest builder Impregilo was expected to be a big gainer from Berlusconi's push to develop ties with Libya and is vying for a piece of a Libyan motorway project financed by Rome that is worth as much as 5 billion euros.

Impregilo has also been cited in the past as a possible target for Libyan investment.

SAIPEM

A consortium led by oil services company Saipem, which is controlled by Eni, won a 835-million-euro contract for the first part of the Libyan motorway project. The consortium also includes engineering and construction firm Maire Tecnimont.

ASTALDI

Italy's No. 2 builder Astaldi has also expressed interest in the Libyan motorway project.

FINMECCANICA

Italian aerospace and defense company Finmeccanica SpA and Libya in 2009 agreed to cooperate on aerospace and other projects in the Middle East and Africa. Under the deal, a 50-50 joint venture between Finmeccanica and the Libya Africa Investment Portfolio will be created and act as the main vehicle for investments.

Finmeccanica has also won Libyan contracts, including a 247-million-euro rail contract last year, and has said it is eyeing more orders from the North African state.

The Libyan Investment Authority also holds a 2.01 percent stake in the company, regulatory filings showed last month.

UNICREDIT

Libya's stake in banking group UniCredit stands at a total 7.6 percent after the Libyan Investment Authority (LIA) acquired a 2.59 percent stake in Italy's biggest lender.

Libya's central bank is a shareholder in the bank, with a 4.988 percent stake. A row over Libyan stake-building in the bank cost former CEO Alessandro Profumo his job last year.

FIAT

Libya came to the rescue of Fiat in 1977 at the invitation of the head of its founding family, Giovanni Agnelli, with the Libyan Arab Foreign Investment Company (Lafico) buying a stake of about 15 percent in what was then a struggling carmaker.

The investment attracted criticism. Lafico sold its stake in 1986, but in 2002 it bought just over 2 percent. Currently its stake is less than 2 percent.

SOCCER

Lafico has 7.5 percent of the soccer club Juventus, which is controlled by the Agnellis. Gaddafi's son, Al-Saadi Gaddafi, used to sit on the Juventus board and was even a player for Perugia and Udine. Libya at one stage considered bidding for the Roman club Lazio and also poured money into Triestina.

TEXTILES

Lafico holds 21.7 percent of Olcese, according to the textile company's website.

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ImgLire500000_1997_Fronte.jpg

I don't think this is a very good past credit reference.

A 1997 500,000 Italian lira bank note which is the equivalent to 253 euros or £233

A 19th century 20 lira gold coin, current bullion dealers metal price 190 euro/ £185, the face value being 1 euro cent!

20_lire_marengo_1883.jpg

Edited by Take Me Back To London!

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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