This morning we have the Chinese news agency xinhuanet.com reporting Italy may be next to request EU bailout. We have some news from Australia about Monti's mounting Italian challenge , but not much else in the English speaking press.
I'm thinking I agree with you. The English speaking press understands that Italy is not "too big to fail", it's too big to save. If Italy defaults, then not even the combination of EU plus the US can save the EU system from collapse.
And that scares the crap out of them.
I agree that Italy is “too big to save”.
For me, the question is will a systemic banking failure trigger an EU-wide systemic banking failure (owing to European banks being generally quite under-capitalized) which in turn triggers a global systemic banking failure?
That’s the SHTF moment. And as the Circle Jerks once sang, “’We all gotta duck when the s**t hits the fan’”.
Oops. Make that a “systemic banking failure in Italy” triggering a systemic EU-wide banking failure, etc., etc.
Glass Steagal is the key to protect customer accounts. Unfortunately we have the illusion of Frank Dodd which does not address an MF Global type bankruptcy that allows the failing bank to last minute ransack customer accounts to pay off big powerful creditors before folding. Leaving the customers robbed and last in the line of creditors during a bankruptcy procedure. Even worst Pres Obama via exec order placed US taxpayers on the hook for any derivative losses incurred by Wall Street bankers in the future.
The EUSSR will go down in flames and it won’t take long...