Italy made headlines earlier this month when Prime Minister Silvio Berlusconi resigned with the county’s debt crisis looming overhead and the fate of the euro hanging in the balance.
In discussing the issues in Italy, spread [differenziale], contagion [contagio] and crisis [crisi] have become the most popular words of the day. For a finance referesher, spread is the difference between a benchmark and the price of a fixed income security. It is measured in basis points, or bps (prounounced bips). 100 bps equals 1%. Contagion, in addition to being a movie, is an economics term used to describe the highly interdependent nature of financial systems, hence their relationship to each other is non-linear, like the spread of a disease.
Listen to a great summary of the impact of Berlusconi’s reign and his lasting legacy on NPR’s On Point. One of the guests, Beppe Severgnini, has written exentsively about Italian customs, vices, and the Itlian mind. His books are a good introduction to Italy and Italians.
In a moment [momento] of crisis, it’s important to learn more — pick up a book and read. (And don’t forget to think too).
