Italy's Austerity Package is a Joke!
The markets went up big again today after the news that Italy passed an austerity package and economics reforms. You realize that this rally was false enthusiasm when you look closer at the details. They agreed to increase the retirement age 2 years many years from now. They agreed to sell off about 13 billion worth of real estate and to sell off some government owned enterprises over the next 3 years. Wow that is a decent gesture but it does nothing about their deficit now. Italy's bond yields skyrocketed over the last week or so because they have 120% debt to GDP and no plans on how to balance the budget. The only way Italy can get out of their crisis is to balance the budget now and not try to rely on half baked economic reforms to stimulate the economy. The ECB has stabilized Italy's bond yields by buying bonds but they also stated that they can only legally do that for a short time and they don't have enough funds to handle a large bailout anyways. I went short again because there is no solution to Italy's problems on the horizon. I am going short again.