Posts Tagged ‘ Italy ’

S&P cuts Italy’s credit rating, outlook stays negative

Could this be putting pressure on the Italy finance ? I believe this could start another Euro crisis?

My blog on -Could Italy be next for EU bailout ? Strike 2 in new credit crunch .

S&P cuts Italy's credit rating, outlook stays negative.

Standard & Poor’s announced yesterday that it lowered Italy’s credit rating to BBB, only two levels above junk, on the back of expectations of weakening economic prospects and the nation’s impaired financial system.

In a statement late yesterday, S&P analysts said that even with unprecedented easing by the European Central Bank, real interest rates for non-financial companies in Italy exceeded the level before the financial crisis.

S&P said, “The rating action reflects our view of a further worsening of Italy’s economic prospects coming on top of a decade of real growth averaging minus 0.04 percent. The low growth stems in large part from rigidities in Italy’s labor and product markets”.

Moreover, the austerity measures had continued to deepen the Italy’s economic slump, even if they briefly enabled Italy to reduce its deficit to within European Union limits.

The Italian economy is headed for its eighth quarter of contraction and joblessness, the highest since at least 1977.

However, Economist Roberto Perli assured that, “This is still two steps away from junk, so that’s reassuring…I can see some short-term volatility but not a lot more than that

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Could Italy be next for EU bailout ? Strike 2 in new credit crunch .

Italy’s former PM Silvio Berlusconi has been sentenced to seven years in jail and banned from public office for having sex with an underage prostitute.This was the main headline out of Italy but there was also another that didn’t get much attention .Mediobanca, Italy’s second largest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs,less supply demand high = HIGH price )

The Italian macro situation has not improved over the last quarter, it has actually gotten worst . With a new anti austerity government , looks to get even worst .

Italy has €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan.but is only the world 8th largest economy .

Rank Country/Region GDP (Millions of $US)
1 United States 14,991,300
2 China 7,203,784
3 Japan 5,870,357
4 Germany 3,604,061
5 France 2,775,518
6 Brazil 2,476,651
7 United Kingdom. 2,429,184
8 Italy 2,195,937
Source -Wiki

Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signalled last week that it will begin to withdraw QE and the ECB Mario Draghi has also been pulling liquidity . The cracks has started with Sibor in China last week , could this be the start for round 2 of the global crisis ?

Mediobanca is particularly concerned about the gap that between yields on short-term bills (BOTs) and longer-term bonds (BTPs) near maturity that expire at the same time. BOTs retiring on July 31 are trading at a yield of 0.48, while the equivalent BTP is trading at 0.74pc. The reason is that BOTs are protected from debt restructuring.

Italian 10-year yields spiked to 4.8% .

The key number before was 6/7% that meant a country needed a bailout . Looking at the situation 5% / 5.25% is looking more realistic .

Could it be time to call ” Super Mario “ back again to sort it out . We could but the problem is in a democracy is voters vote with their heart and not there head which is totally understandable people need to live today as tomorrow is just a promise .

Lets see but I am calling this strike 2 , first one was China credit problem my blog on it :

1.Is the Chinese bubble bursting ?! Perfect storm ahead

Cash is king ,

Regards

Tony Evans
Tokyo

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deVere looking for individuals for global expansion – 13th April 2013 London preview

I am pleased to announce Nigel Green CEO of deVere Group will be having an invitation only preview on 13thApril 2013 in centre of London ( This is an invitation only event )

If you would like to attend read the below and if your interested in hearing more email me at : tony.evans@devere-group.com

I have personally worked for deVere for over 8 years and all I can say is , deVere gives you the opportunity to succeed . All they request is hard work , intelligence and willing to learn’

This is a very rare opportunity to sit and speak to our CEO about what roles are available .

https://www.devere-group-careers.com/page/CareerOpportunities.aspx

This is a interview of our CEO talking how he wants 200 offices !!

http://www.youtube.com/watch?v=l5zJQzScE04

The deVere Group Graduate Scheme provides both new and recent graduates the chance to learn about the industry and provide them with an ample platform to create business with the onsite training in our London office. We provide a full introduction to the financial services industry to ensure that our graduates have a strong platform to build on to become a successful financial planning consultant.

https://www.devere-group-careers.com/page/GraduateScheme.aspx

The deVere Group is the largest independent international group of international financial advisors which provides expatriates and global international investors financial advice for their medium to long term investments. We typically assist clients in retirement and education planning as providing for the future has become more important than ever.
With 70,000 clients worldwide and $9 billion of funds under administration, the deVere Group is expanding. We work closely with a number of leading fund houses to provide a top quality service to all of our clients globally and as a result of some major successes we continue to grow. This is why we want to hear from you.
As we continue to expand, we are looking for exceptional international financial advisors in order to continue our global expansion. We are looking for those motivated and determined individuals who strive to achieve their goals and targets.
If you are looking for your international financial advisor role to allow you:

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As an international financial advisor with the deVere Group you have the opportunity to build a solid foundation for your career with great training and development skills provided. We encourage our financial advisors to grow within the company.

Opportunity in :

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Italy credit downgrade – uncertainty of election result

On Friday Fitch downgraded Italy’s sovereign debt rating by one notch to “BBB+” from “A-” , also stated the outlook is negative .

The problem is the election didn’t have a clear winner and as such no new Government could be formed .
One thing markets hate more than anything ells is uncertainty .With good reason Italy is the 8th largest economy by GDP in the world but is the 3 largest issuer of sovereign debt ! This year Italy has $414 billion in debt maturing and needing finance ! Thus the uncertainty will possibly increase interest rate it need to ay on its debt , diverting billions of much needed money from the economy to debt payment .Fitch noted it expected Italy public debt would peak at 130% of GDP increased from previous estimate of 125% . An extra $100 billion! The financial crisis has desensitised people of the magnitude of a billions ! The media talk today as its not a big thing !

Fitch noted that Italy’s ongoing recession “is one of the deepest in Europe,” and warned that “the increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy.”

Reminds me of quote by Adam Smith :
”It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense… They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will”

Tags : Europe , credit downgrade ,Fitch , GDP , Italy ,Election ,Adam Smith

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