Time for Super Mario to show Italy the full Monti

When Mario Draghi (now ECB President), had oversight of the Italian bank system as Bank of Italy Governor, the Italian bank Monte dei Paschi di Siena (Italy's third largest bank) hid information on the derivatives transactions between 2006 and 2009. This information is just now out, and shares of the bank have plunged 22% in a few days. Mario Draghi ought to be under fire, but he says it's a "Matter for the Italian Authorities". The Mish translation is "It's a Matter for the Italian Authorities, to Sweep Under the Rug".

LONDON – Prime Minister Mario Monti helped stabilize Italy at the most perilous moment of its financial crisis, and he gets credit from many for starting the country on a long road of necessary structural reforms.  

ROME/MILAN — Italian Prime Minister Mario Monti’s imminent resignation drove up the country’s borrowing costs on Monday, as markets took fright at the prospect of a return to an old-style Italian political crisis. The spread between Italian BTPs and German Bunds widened to 349 basis points from 325 late on Friday and BTP future shed more than a point on concern over Monti’s departure.

ROME — Italy’s crucial elections appeared to be heading toward gridlock Monday, initial results showed, with the centre-left forces of Pier Luigi Bersani moving toward victory in the lower house of Parliament and the camp of former premier Silvio Berlusconi gaining the upper hand in the equally powerful Senate. The upstart protest campaign of comic-turned-political agitator Beppe Grillo was also showing a stunningly strong result in both houses of the legislature, confirming its surprise role as a force in Italian politics.

Merkel Hardens Position The EU summit is a day away and pre-summit bickering is so intense that it will be difficult if not impossible to get any major agreements. Two days ago, in a speech in German parliament, Bloomberg reported Merkel Hardens Resistance to Euro-Area Debt Sharing

Sovereign bond yields in Spain and Italy have been climbing across the board, not just the longer durations. Please consider Italy pays dearly to issue one-year debt. Italy sold €6.5bn of one-year debt at the highest cost since December, underscoring how one of the world’s biggest bond markets has been dragged back into Europe’s debt crisis.

Amazing discrepancies in small business employment in Italy vs. the rest of the EU will go a long ways towards explaining why Mario Draghi's OMT plan to "save the euro" cannot possibly work. I pieced the following analysis together after reading some interesting comments on Eurointelligence in today's Daily Morning Briefing.

Financial Terrorism Reader Andrea from Italy (who now lives in France) has some interesting comments regarding my post on Saturday Italy Deploys 20,000 Law Enforcement Officers to Protect Individuals and Sensitive Sites; Anecdotes From Italy via Canada: Taxed Out of House and Home. Andrea writes ... Hi Mish,