Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Just back from 6 day trip for funeral......but, this is my quick take without much news sourcing for me: Italian gov't. (newly elected) formation problems.
I recall a verbal blip on radio regarding anti-Euro policy and monetary austerity. Keep in mind that the Euro central bank doesn't have the same legal mandates as is formed with our Fed.Res. or Treasury. IMHO, there remains a lot of financial slop remaining from the 2008 melt. Financial is financial and gets the shakes thinking about monetary problems; and yes, U.S. govt issues are having their day. Been a long time that money has actually run to this area. Perhaps all of this is overblown or a new beginning of phase 2. I don't know. Outta time here. Take care, Catch
Hey @Ted. What it is???? or how you do'in? The barcharts link is active update all day long, not just closing data. So, if I'm so inclined I take a peek to see.....
@Maurice An add article that may provide a better overview of the Italy problem.
And from a long ago favorite.....Gilda Radner
“It's like my father always said to me, he said to me, he said, Roseanna Roseanadana, it's always something. If it isn't one thing--it's another! It's always something.” -- Gilda Radner
I’m sure I’m not telling you anything you don’t already know, but financials tend to do better when interest rates are higher and rising and poorly with lower and falling rates. At higher rates banks can loan out money long-term at more attractive rates while the lower short term rates they pay to their savers generally lag behind for a while. Just caught the first few hours on Bloomberg today, but the 10-year was around 2.85% in the early morning hours after topping 3% only a week ago. While financials got hit, REITS had a very good day, since borrowing for real estate just got cheaper.
I’m anxious to get caught up in my reading to learn more about Italy and what’s going on in Europe. Taking a breather. But I do follow it from time to time and know they’re having a horrific issue with (impoverished / illegal) immigrants crossing the Med and moving north into much of Europe. The populace is reacting as you might expect and. hence, many governments are becoming less stable. Affects not only Italy, but also Germany and some of the Scandinavian nations, Makes our immigration issues look small in comparison.
(Added 5/30) Here’s an earlier “missing link” in all of this - As angst over immigration grows, the electorate turns more and more towards “strong man” leaders who more often than not tout nationalism and seek to withdraw from the European Union. I think it’s fear of a breakup of the EU that has investors concerned (frightened?) and plays into both rising rates in Europe and selling / losses among European equities.
Of course Italy has other problems. But, my sense is that the political upheaval is most related to the underlying immigration issue.
The immigration problem is surely exacerbating the underlying political morass, but it really isn't the driving force behind Italy's current disintegration. We are seeing what may be the death throes of a political and social system which has so divided and splintered the country that there is really very little left for any reasonable coalition to adhere to.
Italy has always had a major geographical division in wealth and opportunity between the north and the south. It is similar to the Philippines in that there is a national "official common tongue", but there are a great many local dialects which are still spoken as a primary language, and which are so different in construction that a Venetian cannot be understood by a Sicilian unless they agree to use "Italian", which is for the most part a modification of the Tuscan dialect which was adapted as the national "standard". My father, for example, spoke either Italian, Genoese, or of course American English depending upon whom he was speaking with.
In some respects the Italian political system, like the dialects, has become so fragmented that there is little agreement or even basic understanding of the many various issues. The government itself, not unlike our own, has become so splintered that it has been reduced to impotence. Corruption, graft, and outright incompetence permeates the entire administrative structure, including the judicial branches, to the point that the average citizen has lost all respect for the entire governmental "system".
In the last election none of the traditional "centrist" political parties received enough votes to do much of anything, even if they formed a coalition. Two of the more extreme groups (the "League", and the "5-Star movement") did receive enough votes to rule IF they could form a coalition, but some of the positions of these two groups are so far apart that this isn't easily workable either.
While both groups are anti-EU and anti-establishment, the League is a fairly new right-wing populist party that would further divide and isolate the country by favoring the wealthy northern cities and provinces. There is also a strong movement to leave the Euro, which is the main driver of the international repercussion. It's a real mess.
What you say is true re splinter parties. Heck, I had professors 50 years ago using Italy in class as a “model” of a failed (or failing) democracy due to the splintered approach to governing. The reasons it was so splintered were unclear to me at the time, and you’ve shed some bright light on them.
However, the immigration thing is now tearing several countries apart. Moderates like Merkel in Germany are facing increasingly fierce opposition from right wingers using the issue to rouse public sentiment. Some of the more moderate leaders in Europe embrace a humanitarian approach and have tried to accept a certain numbers of immigrants under a shared quota system. But they’re an easy target for the anti-immigrant forces.
@Hank- Oh yes, I didn't mean to play down the importance of the immigration problem. It's just that even without that Italy is in a very precarious position right now. You are absolutely correct that immigration is a major issue in much of the EU, and with respect to Italy and Greece, even more so because of their proximity to the sources of the immigration. The situation in Austria and some of the Eastern EU countries is also particularly bad, providing a platform for "the Trumps" of those countries to advance their divisive causes.
You know, it's just about long enough from WW2 for many folks to either forget or be completely ignorant of their history. Scary times, in a lot of ways.
Comments
Regards
Ted
Can't form a government.
https://www.thelocal.it/20180528/whats-next-for-italy-political-crisis
Other arse kicking indicated here:
https://www.barchart.com/etfs-funds/etf-monitor?orderBy=percentChange&orderDir=desc
I recall a verbal blip on radio regarding anti-Euro policy and monetary austerity.
Keep in mind that the Euro central bank doesn't have the same legal mandates as is formed with our Fed.Res. or Treasury.
IMHO, there remains a lot of financial slop remaining from the 2008 melt.
Financial is financial and gets the shakes thinking about monetary problems; and yes, U.S. govt issues are having their day. Been a long time that money has actually run to this area. Perhaps all of this is overblown or a new beginning of phase 2. I don't know.
Outta time here.
Take care,
Catch
Regards,
Ted
The barcharts link is active update all day long, not just closing data. So, if I'm so inclined I take a peek to see.....
An add article that may provide a better overview of the Italy problem.
And from a long ago favorite.....Gilda Radner
“It's like my father always said to me, he said to me, he said, Roseanna Roseanadana, it's always something. If it isn't one thing--it's another! It's always something.”
-- Gilda Radner
I’m sure I’m not telling you anything you don’t already know, but financials tend to do better when interest rates are higher and rising and poorly with lower and falling rates. At higher rates banks can loan out money long-term at more attractive rates while the lower short term rates they pay to their savers generally lag behind for a while. Just caught the first few hours on Bloomberg today, but the 10-year was around 2.85% in the early morning hours after topping 3% only a week ago. While financials got hit, REITS had a very good day, since borrowing for real estate just got cheaper.
I’m anxious to get caught up in my reading to learn more about Italy and what’s going on in Europe. Taking a breather. But I do follow it from time to time and know they’re having a horrific issue with (impoverished / illegal) immigrants crossing the Med and moving north into much of Europe. The populace is reacting as you might expect and. hence, many governments are becoming less stable. Affects not only Italy, but also Germany and some of the Scandinavian nations, Makes our immigration issues look small in comparison.
(Added 5/30) Here’s an earlier “missing link” in all of this - As angst over immigration grows, the electorate turns more and more towards “strong man” leaders who more often than not tout nationalism and seek to withdraw from the European Union. I think it’s fear of a breakup of the EU that has investors concerned (frightened?) and plays into both rising rates in Europe and selling / losses among European equities.
Of course Italy has other problems. But, my sense is that the political upheaval is most related to the underlying immigration issue.
The immigration problem is surely exacerbating the underlying political morass, but it really isn't the driving force behind Italy's current disintegration. We are seeing what may be the death throes of a political and social system which has so divided and splintered the country that there is really very little left for any reasonable coalition to adhere to.
Italy has always had a major geographical division in wealth and opportunity between the north and the south. It is similar to the Philippines in that there is a national "official common tongue", but there are a great many local dialects which are still spoken as a primary language, and which are so different in construction that a Venetian cannot be understood by a Sicilian unless they agree to use "Italian", which is for the most part a modification of the Tuscan dialect which was adapted as the national "standard". My father, for example, spoke either Italian, Genoese, or of course American English depending upon whom he was speaking with.
In some respects the Italian political system, like the dialects, has become so fragmented that there is little agreement or even basic understanding of the many various issues. The government itself, not unlike our own, has become so splintered that it has been reduced to impotence. Corruption, graft, and outright incompetence permeates the entire administrative structure, including the judicial branches, to the point that the average citizen has lost all respect for the entire governmental "system".
In the last election none of the traditional "centrist" political parties received enough votes to do much of anything, even if they formed a coalition. Two of the more extreme groups (the "League", and the "5-Star movement") did receive enough votes to rule IF they could form a coalition, but some of the positions of these two groups are so far apart that this isn't easily workable either.
While both groups are anti-EU and anti-establishment, the League is a fairly new right-wing populist party that would further divide and isolate the country by favoring the wealthy northern cities and provinces. There is also a strong movement to leave the Euro, which is the main driver of the international repercussion. It's a real mess.
What you say is true re splinter parties. Heck, I had professors 50 years ago using Italy in class as a “model” of a failed (or failing) democracy due to the splintered approach to governing. The reasons it was so splintered were unclear to me at the time, and you’ve shed some bright light on them.
However, the immigration thing is now tearing several countries apart. Moderates like Merkel in Germany are facing increasingly fierce opposition from right wingers using the issue to rouse public sentiment. Some of the more moderate leaders in Europe embrace a humanitarian approach and have tried to accept a certain numbers of immigrants under a shared quota system. But they’re an easy target for the anti-immigrant forces.
Here’s one ya really ought to take a look at re Sebastian Kurtz in Austria. Ring any bells?
“Make Austria Great Again” - http://www.dw.com/en/make-austria-great-again-the-rapid-rise-of-sebastian-kurz/a-40313720
You know, it's just about long enough from WW2 for many folks to either forget or be completely ignorant of their history. Scary times, in a lot of ways.