The mess in Italian politics has helped to push the markets down in a big way on Tuesday with the Dow down -392 points or -1.6%. And it brought the tenuous nature of the European Union’s alliance back to the fore.
Eight years and three months ago, I wrote an article about the European debt problems. It took almost 14 more months to come to full crisis mode. Greece was the central problem and it remains a sovereign state in debt trouble to this day (though it’s largely been swept under the proverbial rug by a series of “loans” from the European Union).
But that country was not alone. Back then (wow – was it really more than eight years ago?), the acronym PIIGS was all the rage. It was used to talk about the government debt problems of Portugal, Italy, Ireland, Greece and Spain.
Let’s take a quick look that will help to paint this unusual picture and then draw some conclusions.
U.S. stocks took a nosedive on Tuesday as the political crisis in Italy stirred fears among investors. The populist politicians failed to form a government, and now Italy is getting ready for new elections. This could give radical parties an edge, causing the country to vote against participation in the European Union. Already, many people are referring to the country as “Quitaly.” As the third largest economy in Europe, Italy has a strong influence on the euro. It dropped 1% against the dollar on Tuesday, and a referendum by Italy could push it towards serious downside. Nevertheless, according to D.R. in this live appearance, this gives us a good opportunity to buy stocks on a dip. He also gives his opinion on Han Solo in the latest rendition of Star Wars. Click here to watch.