When Stress Tests Fail – Italian Banks Are Collapsing

When Stress Tests Fail – Italian Banks Are Collapsing (ZeroHedge, Oct 27, 2014):

Despite the ban on short-sales – which has never worked in the past to do anything but instil fear in traders’ holding long positions – Italian banks are in free-fall following the utter failure of Draghi’s stress tests to encourage confidence in the European banking system.

  • INTESA, UBI, UNICREDIT, MONTE PASCHI SUSPENDED IN MILAN, LIMIT DOWN

Given the post-“whatever-it-takes” world of domestic sovereign bond-buying, it is no surprise that Italian govvie risk is jumping higher and the FTSEMIB is plunging.

“A relief rally would not be justified,” said Michael Woischneck, a portfolio manager at Lampe Asset Management in Dusseldorf, Germany. “There are still a lot of problems to fix, and Italian banks still have a lot of work to do. Even for the banks that passed, what is there to be relieved about? They still have to find a business model and figure out how to get unanswered questions that a stress test just cannot answer.”

1 thought on “When Stress Tests Fail – Italian Banks Are Collapsing

  1. It is these broken nations that ought to warn all…..a chain is only as strong as its weakest link. This is one more indication the EU is likely to break apart, and if the basket of currencies look more attractive, nations like Italy are likely to abandon the EU, the IMF, who they will likely blame for all their troubles……..who wants to take responsibility for their own mistakes?

    All it will require for Putin to get his claws into the EU will be a couple of broken countries like Italy. When the EU starts falling apart, the dollar will collapse, and that is Putin’s goal. Much of the world is behind him due to the endless attacks, bullying, and other horrors the US has launched on the world. We have no friends left, and even worse, we support Japan and Israel, the most despised nations on the globe. Japan’s lack of effort to stop the wreckage wrought by Fukushima has destroyed the lives and incomes of millions who used to take their lives from the now dead Pacific Ocean.

    Israel is so evil that it requires no discussion.

    Our bad leaders have destroyed us. Putin is winning not because he is so greatly loved, but because the US has become universally hated.

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