Saturday, October 01, 2011


At present, the blame is being laid at the feet of Wall Street Hedge Funds according to Euro Intelligence reports:

Italy is now under a speculative attack from a number of US-based hedge funds. 10-year Italian bond spreads have reached 2.446% this morning, and Spanish spreads 2.865%, levels that are not sustainable. The euro dropped by 2 cents to $1.4186.

Consob (the Italian market regulator) imposes short-selling restrictions on Italian equities and bonds. When this happens, you know it is serious. The Italian stock market regulator Consob yesterday imposed short-selling restrictions on Italian equities and treasury securities, requiring investors give notice of any short position they hold in Italian treasury securities. This is not a ban on short sales, only a transparency directive, which, according to La Repubblica, is in line with EU rules. The measure takes effect today, and will last until September 9. . .The purpose of the measure is to reduce the extreme volatility in recent share price movements.

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