Photo: Wikimedia Commons
In recent weeks, Italy has come under the spotlight.In part it’s because with Greece bailed out, attention naturally turns to: who’s next?
It can’t be Ireland or Portugal, because they’re already bailed out. Spain’s issues are well known.
So: it’s Italy.
All the major ratings agencies have been discussing its sovereign rating, as well as its banks, owing to the fact that it’s economy is lackluster and its government is a mess.
Today its services PMI missed big, showing contraction.
And though most European indices are going nowhere today, Milan is off over 7%. Its short-term yields are widening (modestly), and the country’s premier bank, UniCredit is seeing more selling. That bank has also seen steady widening of its CDS.
The problem is: Italy is way too big to bail, with an economy that puts Greece’s, Ireland’s and Portugal’s to shame. Keep watching this one.