Here we go again on the euro: The bad news is that Italy’s financial crisis is political

Here we go again on the euro: The bad news is that Italy’s financial crisis is political

The good news is that the European Central Bank, thanks to the global financial crisis and the Greek debt crisis, has mechanisms in place to support Italian bonds, Italian banks, and the Italian financial system. The bad news is that an Italian government has to ask for that help after swearing to be fiscally responsible. At the moment there is, once again, no Italian government. A bid by the populist parties that came in ahead of the field in the latest election was rejected by Italy’s president. And these parties aren’t likely to meet the European Central Bank’s requirements for help.

Haven assets in demand after day of heated rhetoric on North Korea and nukes

Haven assets in demand after day of heated rhetoric on North Korea and nukes

Not surprisingly haven assets such as gold and the Japanese yen are up today. So are volatility measures such as the CBOE S&P 500 Volatility Index (VIX.) Surprisingly, the rush to safety hasn’t been as strong as you might expect after a day when U.S.President Donald Trump threatened North Korea with fire and fury and that country responded by threatening to nuke Guam.