After ravaging most of East European countries for the better part of the last four years, anti-EU movement goes mainstream. Italy is but the first of the big guns to catch the bug after the establishment's referendum is resoundingly defeated.
An election is likely to usher in a govt that will orchestrate an Italeave. Bank failures will make certain of that eventuality. It also makes sense from an economic perspective. Their banks have been getting a raw deal from the ECB and they won't draw any favors from them going forward. Back to the lira?
The doom loop between Italian sovereign bonds and banks is likely to get very strenuous as capital buffers get vaporized. The same pain will be exported to Spain and Portugal. Euro crisis part two coming up only this time it be a heck of a lot worse than in 2011/2012.
Spain somehow managed to keep the euro skeptic elements out of govt and it remains to be seen if France and Germany will succumb to the wave. The EU will be as good as dead if the govts of the latter two are over hauled by the skeptics.
2017 will most certainly be a torrid year for the euro. The referendum in Italy looks like the beginning of the end for the EU and the euro. Brexit could have been labeled an outlier due to its 'improbability/singularity' however, another walkout most likely by Italy creates a trend and sooner or later there is going to be a stampede for the exit door.
http://www.marketwatch.c...er_new&link=sfmw_tw
2016 is going out with a bang just like it started. Poetic markets.
The main purpose of the stock market is to make fools of as many people as possible.