What if ALL PIIGs default and leave Eurozone?

B

benwm

So Italian 10y yields are above 7% and could be heading for double digits if the ECB buying is not enough to support the market. And the real possibility of all five of the PIIGs defaulting and leaving the Eurozone exists.

Which institutions will fail? MF Global might seem like small fry if the above scenario unfolds.

Whether "Rule 1.29" (http://www.forbes.com/sites/robertl...-6-3-billion-trade-without-informing-clients/) really allows segregated customer funds to be parked in European sovereign debt or not, we know that all kinds of entity from sovereign wealth funds to brokers/banks are heavily invested in this crap. Presumably when they started to buy up the PIIGS debt in prior years it was considered "risk free", and you can only imagine the extent to which positions were added to as better (higher) yields became available.

So how will events unfold if the PIIGS all default one after another, and how will policymakers react? More bailouts and money printing, or will the noises coming from the OWS crowd change the response this time?
 
Overall exposures to Italy:-
http://www.zerohedge.com/news/visualizing-where-pain-summary-biggest-exposures-italy

Bank exposure to Italy:-
http://www.zerohedge.com/news/italian-exposure-bank

Previously we showed what the sovereign gross level exposure to Italy is. Now, it is time to get granular and show the data at a discrete level. Below are the banks most exposed to Italy. Don't forget that courtesy of our wonderful fractional reserve financial system, with everyone's asset being someone else's liability, the question then becomes who has most exposure to these banks, and then most exposure to banks that have exposure to these banks, and so forth.

Intesa €60.2 BN
UniCredit €49.1 BN,
Banca Monte €32.5 BN
BNP Paribas €28.0 BN
Dexia €15.8 BN
Banco Popolare €11.8 BN
Commerzbank €11.7 BN
Credit Agricole €10.8 BN
UBI €10.5 BN
HSBC €9.9 BN
Barclays €9.4 BN
SocGen €8.8 BN
Deutsche Bank €7.7 BN
 
<p>
Quote from DT-waw: Nothing. Berlusconi will still bang some three hundred hot bitchez per month.
More...
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<p><img id="fullImage" src="http://i.thisislondon.co.uk/i/pix/2011/11/Silvio-Berlusconi-415.jpg" alt="Silvio Berlusconi" style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 6px; padding-right: 0px; padding-bottom: 2px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; border-style: initial; border-color: initial; max-width: 415px !important; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 11px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: center; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(239, 239, 239); " /><span class="Apple-style-span" style="color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 11px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: center; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(239, 239, 239); display: inline !important; float: none; "></span>
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<div class="caption" id="caption" style="border-top-width: 1px; border-right-width: 0px; border-bottom-width: 1px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 4px !important; padding-right: 4px !important; padding-bottom: 4px !important; padding-left: 4px !important; margin-top: 4px !important; margin-right: 0px !important; margin-bottom: 6px !important; margin-left: 0px !important; background-image: none; background-attachment: initial !important; background-origin: initial !important; background-clip: initial !important; background-color: rgb(239, 239, 239); border-top-style: dotted; border-top-color: rgb(0, 0, 0); border-bottom-style: dotted; border-bottom-color: rgb(0, 0, 0); display: block; font-weight: normal; text-align: left; width: 412px !important; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 11px; font-style: normal; font-variant: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-position: 0px 0px; background-repeat: repeat repeat; ">Romantic link: Berlusconi has a word in the ear of former TV presenter Francesca Pascale
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<p class="artfirstpara" style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 2px; padding-right: 4px; padding-bottom: 2px; padding-left: 0px; margin-top: 15px; margin-right: 0px; margin-bottom: 15px; margin-left: 0px; float: none; border-top-style: none; border-right-style: none; border-bottom-style: none; border-left-style: none; border-width: initial; border-color: initial; clear: left; font-weight: bold; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); ">Silvio Berlusconi's political career may have been going into meltdown but that did not stop him seemingly spending the night before a crucial parliamentary vote in the company of an attractive young woman.
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<p style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 2px; padding-right: 4px; padding-bottom: 2px; padding-left: 0px; margin-top: 15px; margin-right: 0px; margin-bottom: 15px; margin-left: 0px; float: none; border-top-style: none; border-right-style: none; border-bottom-style: none; border-left-style: none; border-width: initial; border-color: initial; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); ">Former TV presenter Francesca Pascale, 25, who has been linked romantically with Mr Berlusconi, 75, was seen driving into his official residence late on Monday night.
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<p style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 2px; padding-right: 4px; padding-bottom: 2px; padding-left: 0px; margin-top: 15px; margin-right: 0px; margin-bottom: 15px; margin-left: 0px; float: none; border-top-style: none; border-right-style: none; border-bottom-style: none; border-left-style: none; border-width: initial; border-color: initial; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); ">Video footage posted on several Italian newspaper websites showed her car - with a cuddly toy on the dashboard - arriving at the heavily guarded Palazzo Grazioli in Rome.
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<p style="border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; padding-top: 2px; padding-right: 4px; padding-bottom: 2px; padding-left: 0px; margin-top: 15px; margin-right: 0px; margin-bottom: 15px; margin-left: 0px; float: none; border-top-style: none; border-right-style: none; border-bottom-style: none; border-left-style: none; border-width: initial; border-color: initial; color: rgb(42, 42, 42); font-family: Tahoma, arial, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 14px; orphans: 2; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; background-color: rgb(255, 255, 255); ">A bodyguard by the wrought iron gate on the residence was seen nodding and smiling in acknowledgement.
</p>Witnesses said the car arrived shortly before midnight and did not leave until the next morning.
 
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