Dudu’, Berlusconi ‘s dog, may be the next FI #2 Two days ago the Naples court decided that Berlusconi will face a new trial for corruption: Italian senator De Gregorio was paid 3 million euro as a reward for voting down former PM Prodi. Today, possibly as a reaction, Berlusconi is launching a restyled “Forza […]

# crash probability

## Welcome to the Berlusconi Roller Coaster!

Whoopee! Welcome to the Italian Roller Coaster! For now, the spectacular U-turn of Berlusconi on the Letta government is pushing back the spectre of political paralysis (=elections with old electoral rules), what I called the Italian Crash Probability (see below what happens when the probability of the Letta survival rises from 0 to 50%). Is […]

## BTP-Bund Spread and Crash Probability

The rise in the likelihood of a disorderly dissolution (“crash”) of the Parliament , that I estimate to have risen from 0.52 to 0.65 since Friday last week following PdL ministers and MPs threat of resignations, is already affecting the BTP-Bund spread (today the spread opened around 290bp). If we assume that probability of an […]