The Financial Landscape: Italy Under Stress; U.S. Social Safety Net In Danger

Tuesday, July 12, 2011
By Paul Martin

ByEamon Murphy
DailyFinance.com

The Boot Gets Kicked:As the eurozone sovereign debt crisis continues, focus is shifting to Italy — the continent’s third-largesteconomy– as the next potential victim. “In what Italian media dubbed ‘Black Friday,’”CNNMoney reports, “Italian stocks and bond yields plummeted at the end of last week, and trading was suspended for some Italian bank stocks following sharp sell-offs.” The chaos resumed on Monday, “amid fears that those banks won’t be able to pass eurozone stress tests — the results of which will be published Friday.”

Bloomberg reports that Consob, Italy’s market regulator, took emergency action against short selling after Black Friday, when “the country’s benchmark stock index fell the most in almost five months and bonds tumbled on investor concern the nation may be the next crisis victim.” Eurozone fears were expected to hobble U.S. stocks on Monday, but Bloomberg points to a potential silver lining for Americans — “The best currency forecasters say the dollar’s 13 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency.”

The Rest…HERE

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