Topic: Italian Banks-Crash is Coming (Read 1240 times)

will you give even a penny to rescue Monte Paschi

https://www.theguardian.com/business/2016/dec/11/monte-dei-paschi-siena-emergency-cash-injection-european-central-bank

EBC is big banks service,euro is political weapon.In a case of Monte Paschj it will be third bailout from 2009
Point is that Italy is on the edge of new election,if Grillo  will win,he will launch his New Begining
First what he will order will be referendum,do italian want to stay in EU and do italian want to stay with euro currency,than we have election in France and Germany

The ECB made the problem worse because it didn't act like a central bank in the first place like the US Fed did. Buying up bonds / QE wasn't their job. Things went south very quickly and they only acted within their role. Not until Draghi delivered his 'whatever it takes' speech did they act like a central bank.

The way they got into this mess? While Spain and Ireland had real estate bubbles, many French & Italian banks made big mistakes. Pre - Euro they could buy government bonds with yields around 15%, which is phenomenal. But, after the Euro came into being, Euro area bonds began behaving like a bloc and gravitated to German yields (around 2%). For a long time, the Euro bond acted like a German bund. So, the banks that had been getting 15% yield, leveraged up significantly to offset the lower yields. But sometime in 2011 (?), when Greece began to wobble yields began behaving individually again, and as the threat of large losses on Greek govt bonds rose, banks looked to sell out of Portuguese debt before everyone else did, creating a spike in Portuguese yields. Contagion. The ECB didnt step in until the situation was dire.

edit: For Italy, like Monte Paschi, they made a shit deal that got wiped out. Many of their junior bondholders are retail Italian investors so the government wants to bail them out but the new ECB rules say no bail out. So, if no bail out for Monte Paschi, then Italy says no bail out for Deutsche bank.

There will be a bail out when Monte Paschi gets low enough.

...

Mighty Jim Rickards (author of the brand new book The Road to Ruin, as well as other similar finance books) says that BAILOUTS will be the response, especially once the problems get really big.

A "Cyprus" can get "bailed-in" (depositors and/or bondholders pick up the tab = take the losses), not so for a huge player like Italy.

This does not mean there are no risks for depositors however.  If a small bank goes (perhaps like Monte/Siena), depositors could lose their money.  If Deutsche Bank is about to go down, they will bail it out.

If something really dangerous (to the world financial system) really happens, they will BAILOUT the banks (by QE, raw money printing or whatever).

Count on it.


EDIT:  Just hit the wires at Zero Hedge:

http://www.zerohedge.com/news/2016-12-11/monte-paschi-scrambles-last-minute-capital-increase-avoid-nationalization

If you want to know what is happening in Europe,watch dollar-euro pair
euro is now on critical bottom level 1.05,if will break down we will see euro below 1 to 1 level.,it will be official begining of the end of euro currency and begining of big trouble for Germany
Bailout is not permited in EU

For this reason banks won't crash, because they'll have an alternate solution to overcome the issue. European union avoiding to support during the hard days is to make the situation worse in the economy of the country's growth.

If Italy goes down, we will see a domino affect right across Europe, because they are closely linked to the economies of other countries

invested in their debt. When Greece was in trouble, a lot of other countries including Italy suffered. There are already rumors that Rome has

been putting together emergency proposals to nationalise or part-nationalise Monte dei Paschi {3rd biggest lender} ..but this will get strong

opposition from the government. As usual governments will jump in to rescue the banks... how pathetic. 

   EU economy is going down fow a while. Its not just Italy, Greek story doesnt have ending, and in that time Italy and Spain was marked like next countries with upcoming economy crash. With brexit EU have just one more problem to solve in sea of other problems.
   In the end tax payers are the one who give the most, working class will have one more tax to pay, and low salaries will be even lower.

European politicians say that there will be no bailout. I'm pretty sure we'll see one for the Italian banks this month or sometime in 2017. It is just a question of time. They are a big risk. Not just for the European economy, but for the global economy. It they are a major risk for the further existence of the Euro currency. The taxpayer will have to rescue the banks in Italy.

Maybe this is the decline of the current financial industry. Maybe we are witnessing the turn of the century. Where we will see that the financial institutions we see today will fall and the rise of decentralized currency is upon us. The whole world might shift to other securities such as bitcoin and other currencies that the government or other private entities can't control.

All of these banks problems, how could it occurred in the first place? Because of debt or someone corrupt? I mean for all of the banks that comes to collapse. That's why we can't really trust and saving our money there (most of it), I believe people need to divide their money into several investment including bitcoin, thinking and decide by yourself.

We make so much speculation regarding bitcoins and the current financial markets of the whole world, but lets first remember that Bitcoins are not even 1% of the financial market of the whole world (or even the US). I don't think any of these are yet to be really connected with the rise of bitcoin. Probably only  partially as maybe those who distrust banks has been moving to other securities like bitcoin.

The problem is it's not just any one country but on a global scale where these predictions are coming. I've seen the same thing said for America and many other European countries. When will people learn that all fiat is the same!

Whatever happens in 2017 I hope bitcoins go on a wild ride (up )!

I think this is the right way, a bailout from their government to save its banks and will not affect the citizenry. The population will be much affected here if no intervention were made.It will cause hunger,higher unemployment rate etc it has domino effect. I read before articles in Spain,greek where there are poverty incidents.

Also, hope and pray that it will not affect other country's economy.

I just read an interesting piece in Barron's (the financial newspaper that comes out on weekends) today (Sat., USA).  The author said that at least now it is not likely that the Italian banks would crater (be destroyed), including the very weak Monte Paschi Siena bank.  They would be bailed out, and Italy always has some come of crisis or other going on.  "Business as usual."

[My *guess* is the author is understating the problem, but he is likely much more knowledgeable about Italian banks than I am.]


Perhaps from Italy or otherwise knowledgeable would advise us of the Bitcoin scene in Italy now?  Whether or not it is catching on?  BTC ATMs there?

Well you might be right about your prediction of the Italian bank crash but I bet to differ if that will have any serious impact or ramifications on BTC because the Italian central bank isn't independent of the other European Union central banks and I'm aware there are measures in
Place to check them individuals; unless the entire euro currency falls flat BTC wouldn't be affected negatively.

Bailouts have always worked like this. Spain, Ireland, Portugal, France, etc., bailed out their banks. Then when some of these countries couldn't get money on the markets due to their debt, they had to be "saved", then later the ECB finally started to buy these countries' bonds. The ECB couldn't do it before because it isn't supposed to do it, and Germany was against it.

What I found interesting is that the European Central Bank refused to delay the matters any more and prompted the Italian government to clear their own mess by bailing out the troubled bank themselves. But if a big crash is really coming the ECB will surely step in and provide a big cash injection to stop the fall.

That was really a decent post. I like to no more about the coming Italian bank crash. Thank you so much for this post.

The banks are probably going to experience a lot of bad news over the next few week,s but I don't know if there is actually going to be anything happening anytime soon.

If anything, a bailout is expected, like all other impending pieces of economic doom. There will likely be very little to come out of this, and it is doubtful there will be many lasting effects until the next total collapse (like 2008).