Put This in the Short Term Volatility/News Bin

The more I look at the short term vs the 10-15 and even 30 min charts today and consider the FX/Dow correlation that is so far off, the more I feel like there's a short term bullish move coming to be followed by a nasty bear move.


That's gut feeling...


Now to the point of the post, 


The "Full" Monti in Italy, or the new PM, has sent a letter to the EU about austerity measures to be implemented including:


300,000 public sector job cuts!!!
Raising the retirement age more rapidly
Tax system overhaul
Reintroduction of a property tax called ICI


Here is an email I just received from one of our members in Italy which was unsolicited.




"Here in italy, a lot of people are scared about the new taxes from Monti...

Very bad sentiment from the people..!

Ici (the property tax mentioned above) on all homes,  account withdrawals, etc.."

I'm trying to find out if he meant there's a tax on account withdrawals or he meant there's a bank run, I'll let you know soon.

As they say though, every boxer has a fight plan until the first punch is thrown. As for the reforms, they seem significant, whether they can actually be implemented is another story and the time it will take to see any meaningful financial change will likely be far too long with the way Italian bonds are trading, as if they are the next to seek a bail out. 

The key obviously is the ECB, until these fiscal measures, some of which will take 2 years to implement, start to take effect, only the ECB can save Italy and give it enough time, however as has been made clear by the ECB, the Germans and French, the ECB is NOT to be used in this manner.

Furthermore, the austerity measures being taken will have a dramatic impact on the Italian economy and GDP.