Italy is TBTF Too Big to Fail but it is also TBTS Too Big To Save [UPDATE] [UPDATE II]

nouriel roubini...

The worst case scenario for Italy is inevitable

Clearly unsustainable.

and thus spake dr.doom...

[UPDATE and BUMPED]

from the financial times...

Nouriel Roubini: Why Italy’s days in the eurozone may be numbered

With interest rates on its sovereign debt surging well above seven per cent, there is a rising risk that Italy may soon lose market access. Given that it is too-big-to-fail but also too-big-to-save, this could lead to a forced restructuring of its public debt of €1,900bn.

That would partially address its “stock” problem of large and unsustainable debt but it would not resolve its “flow” problem, a large current account deficit, lack of external competitiveness and a worsening plunge in gross domestic product and economic activity.

i don't know about you, but i'm getting the distinct feeling that something really, really big is about to happen...

[UPDATE II and BUMPED]

the collapse of the euro zone appears to be getting closer and closer... accordingly, i've added two more popcorn-eating icons to graphically demo just how interesting this whole thing is getting...



from the ft...

Market spikes eurozone’s guns

This week’s market upheaval in Europe has made it difficult to increase the firepower of the eurozone’s €440bn rescue fund to the €1,000bn that the bloc’s leaders had hoped for, the fund’s chief executive said on Thursday.

Investors have fled from bonds issued by highly indebted countries. Luring them back by offering insurance on losses – the centrepiece of a plan agreed in Brussels on October 26 – would now probably use up more of the fund’s resources, Klaus Regling, head of the European financial stability facility, said.

His concerns underline Europe’s difficulties in putting in place mechanisms to contain the sovereign debt crisis and, if necessary, help Italy cope with soaring refinancing costs.

pull up a chair... get comfy... we just might be about to witness an historic economic collapse which, if it does happen, is going to have a domino effect that we can't even imagine...

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