Market forces will 'correct' the problem by pressuring Italian bonds (rising yields). Ultimately, this will create a response from a Eurozone that is increasingly reluctant to sacrifice good money and social order without Eurozone reform regardless of the number of wake-up calls issued.
Chart: Euro ETF (FXE)
- Red/yellow equals Euro downtrend
- Green/blue equals Euro up trend.
Headline: Will Italy Listen to Its Downgrade 'Wake-Up Call?
Italy's credit downgrade should be viewed as a "wake-up call" by the country's fractious government, analysts told CNBC - but they remained divided over whether the announcement would have any impact in Rome.
S&P lowered Italy's sovereign credit rating to BBB from BBB on Tuesday, citing the country's weak economic prospects. The new rating is two notches above "junk" status. The agency left the country's outlook at "negative" and said there was at least a one-in-three chance the rating would be revised down again this year or next. Italy's FTSEMIB (FTSE International: .FTMIB-GB) benchmark index fell after markets opened on Wednesday, and was 1.2 percent lower in mid-morning trading.
As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2013. This analysis will be revealed by an Insights key.
Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.