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Italy: Another Eurozone Stress Test?

  • Written by Syndicated Publisher No Comments Comments
    February 27, 2013

    The initial turmoil stemming from the Italian election comes at a bad time for Italy and Europe in general. With much of the continent in recession, the markets certainly won’t benefit in the near term from the potential domino effect of the clash between the forces of anti-austerity and the powers that be.

    On the other hand, European markets are probably (hopefully?) closer to a secular bottom than they were five years ago. Here is a snapshot of the EURO STOXX 50 to illustrate my point.




    Ditto the index for the country now in focus, Italy’s FTSE Milan.



    The Italian index has a pair of troughs since its 2007 all-time high, first in 2009 and again last year. Unfortunately, the trend between the two probably increases the odds of another trip to the minus 72% area.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.