Get Your Money Out of Italian Banks Now! Austerity and Bail-Ins Fan Populist Flames
Interest-Rates / Credit Crisis 2015 Dec 30, 2015 - 02:21 PM GMTBy: Mike_Shedlock
Austerity and Bail-Ins Fan Populist Flames
The Italian economy is growing, albeit barely. But Italy is still saddled with massive amounts of debt.
Citizens are upset about a recovery that has passed most of them by. For example, youth unemployment is a whopping 39.8%.
That's a lot of potential voters rightfully upset about things. For them, promises are many, and gains are nonexistent.
Topping off the discontent, Italy Bank Rescues Spark Bail-In Debate as Anger at Renzi Grows.
Italy's 5-Star Movement to Challenge Renzi
With the above bailout and unemployment backdrop, it should not be surprising to see the eurosceptic Five Star Movement on the Rise.
Get Your Money Out of Italian Banks Now!
The goal is always to bail out the banks at any expense, especially that of taxpayers. The bail-ins in December are a huge warning shot at what's highly likely in 2016.
If you have money in weak banks after this mess, you are crazy. Cyprus, Greece, and Italy have all provided warning shots. I have been warning about these setups for years. And in 2016, banks can go right after depositors if necessary.
It will be very interesting to watch target2 imbalances (a measure of capital flight) following this bail-in debacle. The political scene looks interesting as well. Renzi's days may well be numbered.
If the Renzi government falls, it's highly likely it will be to a eurosceptic party. In this regard, Greece was a sideshow. Italy is the real deal.
By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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