OK, if that doesn’t win Best Italian Debt Crisis Headline at the Bloggies this year I give up.

Anyway, the situation with Italy’s banks is not so good.  The Chart of the Day I’ve put together looks at the FTSE Italia All-Share Financials Index (data via Bloomberg):

You can see the action in the last week accelerating the downtrend that began at the beginning of the year.  The whole thing looks and feels awfully Lehman-like.  Here’s the Wall Street Journal with some color from European trading this morning…

Intesa Sanpaolo SpA, Italy’s largest bank by assets, fell 7.7%, and UniCredit SpA, the second-largest lender, lost 6.3%. Other bank shares posted similar declines. Intesa and UniCredit held a total of €228 billion ($325 billion) of government debt as of the end of April.

Italy’s two largest banks have lost nearly 30% of their market value over the past three months, frustrating efforts to restore investor confidence through capital increases.

The risk here is contagion, but everyone says that so let me assign some actual numbers to what we’re talking about.  The only two Euro Zone nations that can hold everything together at this point are Germany and France.  But Fritz and Pierre are not entirely immune, you see.  Their own domestic banks have made Italian acquisitions in the lending sector and have made tons of loans directly into Italy and the other PIIGS countries.

According to the Bank of International Settlements (via WSJ), French and German banks have €689 billion worth of exposure to Italian government and corporate debt, and another €801 billion of exposure to Spain, Ireland, Greece and Portgual.

If any of this sounds eerily familiar, that’s because it is a very similar situation to what we faced when it turned out that all our banks and insurance companies were basically arrayed as a circular firing squad; Goldman shooting at AIG, Citi shooting at, well Citi, etc.

Many of us have looked at the Euro Debt Crisis as either a far-off event or a sideshow as we luxuriated in waves of Fed Capital floating our own stocks ever higher.  But I bet you’re paying attention now.




This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. immediate edge scam commented on Sep 22

    … [Trackback]

    […] There you will find 14972 additional Information on that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  2. is bitcoin loophole a fake? commented on Sep 27

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  3. bitcoin evolution hoax commented on Sep 29

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  4. bitcoin loophole review commented on Sep 29

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  5. 툰코 commented on Nov 13

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  6. functional testing commented on Dec 09

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  7. 마나토끼 commented on Dec 09

    … [Trackback]

    […] Here you will find 62160 more Info to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  8. rolex replica commented on Dec 21

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  9. rbc royal bank canada commented on Jan 03

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  10. Joe Manausa Real Estate commented on Jan 12

    … [Trackback]

    […] There you will find 81986 additional Information to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]

  11. quality engineering commented on Jan 18

    … [Trackback]

    […] Read More on to that Topic: thereformedbroker.com/2011/07/12/lehman-cello/ […]