Markets Live

Guadian Live: Reports that the London market is expect another sell off tomorrow of around a hundred points. Folks have this feeling it could be a lot more than that, the US job figures come out tomorrow, expected to be bad, also the article states that Germany, France and Spain will hold emergency talks tomorrow to discuss the market crisis, thus expect Europe to have a major sell off day, its going to get darker folks, a lot darker.

The Markets TUMBLE

BBC News: Reports on the major slides in Shares in the UK and US, the fault line is the bad US economic news and the sovereign debt crisis in Europe. At close the FTSE-100 was down 191.37, that’s 3% down folks, in the US the Down Jones is down by 4%, nearly 500 hundred points down. The question that has to be asked is what has happened to our politicians, in the UK the House of Commons is in recess, also the US Congress. The UK PM David Cameron and his Deputy Nick Clegg are on holiday and in the US, President Obama is celebrating his birthday, the economic structure of the West is going down the drain and our politicians party, God help us all.

Silvio Berlusconi = The Speech that failed

Guardian: Reports that a Speech by the Italian PM to the lower House of the Italian Parliament has failed to sooth the markets, the article states the following on the speech, “ ..contained neither an appeal to the nation for painful sacrifices …..(or )..radical, structural reforms that most economists believe Italy badly needs. ” Lets be honest Mr Berlusconi with his various Court cases should not be PM of Italy at this minute, there are rumours of disagreements within the Government between the PM and the Finance Minister, hardly something that will calm the markets. Also if you’re a politician in trouble and Mr Berlusconi is in legal trouble you cant afford real harsh measures that would destroy your political base, just ask Obama how popular he is with his base after the debt ceiling agreement. Thus it can be postulated that the Berlusconi Government wont push the tough economic reforms that Italy needs and thus will need a bailout from the EU/ECB and the IMF. Thus the future default of Italy is down to its politics not its economy.

The Rescue - ECB

Telegraph: Reports that the European Central Bank is expected to announce on Thursday that it will buy the bonds of at risk countries such as Italy and Spain. The question that has to be asked will it be enough for the markets, should ECB not rescue Spain and just give limited support to Italy. What even if the ECB buys the bonds of Italy and Spain and it does not solve the problem, just crating more bad debt in the system, it might just give these Countries some economic relief over the next few months, but is it a long term solution, from 2008 European Government bailout out banks, but all it did was move the debt from the banks to the state, this is part of the reason that the Europe faces a Sovereign debt crisis. At some point the debt will be to much folks, when that shoe drops it will cause major disaster in Europe.

Italy to DEFUALT

BBC News: Reports that the Centre for Economics and Business Research a UK think tank has predicted that Italy will default due to its debt, it has predicted that Italy will have a debt of 150% of its GDP, while Spain will avoid default due to the fact that its debt is well below 100% of GDP. In other words the advice to markets, start to sell Italian debt, for any bailout of Italy the Germans will demand that the private debt holders take a major hit, thus markets its in your interest to sell Italian debt and not buy any more bonds. As Italy is a lost cause, the markets should support Spain, there debt = to GDP is 75%, thus this can be managed by the EU/IMF and the markets. At its most basic folks, the Market is the Doctor in A&E, it has two patients, both are damaged, but one will just about get through, the other wont, you have to make the right decision, keep the patient that going to live and let the more damaged patient go, it’s the hard fact we face today folks, Italy is a goner, there are no silver lining in the clouds folks.