Posted on 11/09/2011 12:52:26 AM PST by bruinbirdman
Italian Prime Minister Silvio Berlusconi, seemingly untouchable media magnate who has brushed off countless scandals and challenges to his rule, appears to have made his final stand. On Tuesday, he passed a crucial budget vote, but failed to muster a majority on the measure, leading to speculation that he will be forced to resign. The situation takes global proportions as the systemically dangerous $2.6 trillion Italian bond market is quickly reaching unsustainable levels with yields on benchmark 10-years surging past 6.7%.
If I must die, Ill do it in the House, said a defiant Berlusconi Tuesday, vowing to meet his traitors in Parliament. Hours later, he passed the key budget measure with 308 votes, seven short of majority, as 321 lawmakers abstained. Berlusconis failure to marshal a 316-vote working majority on the budget measure suggested he would fail to pass a confidence vote, leading to calls for his resignation. Italian bond yields surged, and U.S. equity markets plunged deeper into negative territory. Major U.S. banks like JPMorgan and Morgan Stanley fell, while Goldman Sachs and Citi remained in the green.
Opposition leader Pierluigi Bersani of the PD party took the floor to ask Berlusconi directly to quit, while Umberto Bossi, Il Cavalieres ally and head of the Northern League, asked the Prime Minister to step aside and make way for Angelino Alfano, secretary of Berlusconis own PDL party.Investors fear that Italys massive debt, one of the worlds largest, will become unmanageable for a country that, despite a 3% budget surplus, still faces slow economic growth and a debt-to-GDP ratio of about 120%, according to Barclays. News reports cite the psychologically important 7% barrier as the point of no return for Italys bond yields, while Barclays notes they must fall to 5.5% in order to keep debt financing
(Excerpt) Read more at forbes.com ...
Italy gov’t bond rates are soaring. The gold price will tell you (anyone) what the current fear factor is
Silver price to at a lesser extent
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