Is Italy under blackmail? The hedge fund-Financial Times case
The Financial Times reports on the mega bearish bet by hedge funds on Italian public debt securities. Italy – with no room for maneuver in terms of budget policy – is a country under blackmail in view of the vote? Giuseppe Liturri's comment
"The markets will teach Italians to vote in the right way". It was the unfortunate exit with which on May 29, 2018 – in the midst of post-election tussle, with Carlo Cottarelli wandering wandering between the Colle and Palazzo Chigi in vain search for votes and with the spread rising by 80 points in a few hours – the commissioner UE Gunther Oettinger commented on the events.
A little more than 4 years have passed and it seems that the same ballet has already started. In fact, it has been for some days that articles with an alarmed tone have appeared in the major international media ( Bloomberg , Reuters , Financial Times ) on the possible reactions of the markets towards an electoral outcome that would see the right prevail with its Eurosceptic ideas.
Admitted and not granted that both of these things are true (the victory of the right and the ideas attributed to it), the show offered by the large foreign media is boring and reveals the usual blackmailing methods by those who wisely fool them, A cloying script which we have already seen on stage in May and October / November 2018, not to mention the last months of 2011.
The first signs came with the articles that commented on Mario Draghi's speech at the Rimini Meeting, all dominated by the call for Italy to respect the commitments undertaken at European level, regardless of the government in office.
The markets appeared to be speaking through Draghi, acting as spokesperson.
But the most incisive thrust came this morning, when the Financial Times exhibited on its home page an article referring to the mega bearish bet of hedge funds on Italian public debt securities.
The total value of these positions amounted to around 39 billion, the highest since 2008, even exceeding the level reached in 2018.
Underlying all this, there are several orders of considerations:
- the particular vulnerability of our economy to the energy crisis in general and, in particular, to further restrictions on Russian gas supplies;
- The gradual exhaustion of the bond purchase program by the ECB and the lack of confidence in the new instruments announced in order to contain the increase in the spread.
- The fears of the future government's economic policy choices, oriented towards a more expansive budgetary policy than the debt reduction path requested by Brussels.
Regardless of the greater or lesser validity of the reasons that would have led to the establishment of those bearish positions and the now recognizable method, the bitter conclusion to be drawn is that Italy – without a central bank and room for maneuver in terms of policy budget – is a country under blackmail. And those who hold us hostage are keen to remind us before going to the polls, like a South American republic in the 1970s.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/litalia-e-sotto-ricatto-il-caso-hedge-fund-financial-times/ on Thu, 25 Aug 2022 13:41:26 +0000.