WALL STREET YOURNAL THAT WELL PLANS EUROPE BUT AND THE USA

Which will the next record of the European domino be in falling for the crisis? In the last two years, the widespread opinion has been that Spain is the most vulnerable nation after Greece, Ireland and Portugal, but the attention of the investors is centered more and more in Italy.  

The breach among the profitability of the Spanish and Italian funds has decreased in half this year in the face of the fear to that the problems of Rome could be more difficult of approaching that those of Madrid. The two countries confront difficult challenges. Spain registered a high deficit in 2010, of 9,2% of the GDP, and it should restructure its boxes of savings. But their ratio debt / GDP is below the stocking of the euro zone, and the growth has begun to recover.  

Italy, on the other hand, has a low budgetary deficit of 4,6% and he/she has not needed to bolster to its banks. But you grieve it has grown in one decade, and their ratio debt /PIB in 2010, of 119%, it was only overcome by that of Greece. For the time being, the markets are more concerned for Spain, given the uncertainty on their deficit and their bank system.  

The government funds to 10 years produce 5,64%, 2,71 percentage points more than the German debt, while the Italian paper offers a yield 2,36 points superior to that of Germany. The smallest profitability on the Italian debt also reflects partly its biggest liquidity: the size of the market of funds of Italy, with a value of 1,6 trillion Eurus, is almost three times that of Spain. But while Spain has taken decisive measures this year, the long term challenges of Italy have become more evident. It suffers a chronic problem of growth, and it is expected that the debt stays very above 100% of the GDP during years.  

This is putting on approval the patience of the investors in a moment in which Italy still has to collect around half of its total requirements of financing that ascend to 222.000 million Eurus this year; Spain only has to obtain other 40.000 million Eurus. The European politicians should take note: a loss of trust has more than enough Italy it would be truly alarming.  

I have warned before. Europe is dead you don't become nervous the markets will lose everything, and better to worry that Obama gets money otherwise before August we will laugh all.