Where is the Bee—
Where is the Blush—
Ah, said July—
Where is the Seed—
Where is the Bud—
Where is the May—
- Emily Dickinson, Answer July
If there is one month to fear this coming year, it would have to be July.
The financial sector is very unstable and all hell could break loose at anytime, but July has special problems.
Via FT Alpha, below is a bar chart put together by Barclay Capital's Barry Knapp. It shows the money that the PIIGS will have to raise this year.
If we somehow make it past the money needs of Greece in April and May and that is a big if, the next significant money raise will need to be done by Italy
In addition to a sizable money raise in March, Italy needs to raise significant amounts of money in June. It won't necessarily be the easiest thing to get done, but FT tells us:
Italy, apparently, has a “robust domestic banking system,” meaning there should be no problem absorbing the due supply of Italian government paper
Don't bet your house on this, even if it is underwater, but maybe the Italians can pull it off. Remember the head of Italy's central bank, Mario Draghi, is a former Goldman man.
Following the heavy Italian money needs comes Spain. Let's put it this way about Spain, Spain does not have a “robust domestic banking system,” where the money will come from. The best FT can do is say that the global economy will be out of recession by the time Spain needs to raise its money. It won't. The month of the Spanish money demands? July.
Back on the domestic front, Los Angeles faces a budget shortfall of nearly a billion dollars. The first hurdle is a $200 million deficit that some how has to be funded. The month of this deficit? July.
I repeat, the entire global government connected financial sector is teetering and could collapse at any time. But July seems to have more intense problems. Indeed, where is the hay, July?