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Is Italy Next?

Once again the positive sentiment that propelled banks higher proved to be short lived.

This time investors ran for the exits in the XLF after new reports suggested the financial woes of Italy were quickly escalating.

“I have found it reasonably easy to not get too worried about the debt dynamics of Ireland, Portugal or Greece but Italy is a different topic,” says Jim O’Neill, chairman of Goldman Sachs Asset Management and father of the BRIC acronym.

That’s largely because Italy is the 3rd largest economy of the Eurozone and investors are the global are largely unsure how events could ripple across world markets.

What should you make of it?

The problem in Italy is that GDP isn’t growing fast enough to pay back the interest rates on their bonds, explains Brian Kelly. It calls into question who is the buyer of last resort.

Looking at weakness in US banks - the thing about contagion fears is that they aren’t always rational, says Karen Finerman, but that doesn’t matter. I think we need clarity and I’m hoping we get some clarity as banks reports earnings.

I’m concerned about Morgan Stanley, says Pete Najarian. It seems like the stock has no bottom.






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Trader disclosure: On July 11, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (GOOG); Karabell owns (GS); Karabell owns (GE); Karabell owns (AAPL); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Adami owns (INTC); Pete Najarian owns (AAPL); Pete Najarian owns (ACI); Pete Najarian owns (C) ; Pete Najarian owns (F) bonds; Pete Najarian owns (MS); Pete Najarian owns (MOS); Pete Najarian owns (MRVL); Pete Najarian owns (PFE); Pete Najarian owns (GE); Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman owns (BAC); Finerman's Firm Owns (JPM) Leap, Finerman owns (JPM); Finerman's Firm owns (CMI), Finnerman is short (CMI); Finerman's firm owns (CAT) calls; Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts

Brian Kelly
Accounts Managed By Brian Kelly Capital Own (KRE)
Accounts Managed By Brian Kelly Capital Own (WFC)
Accounts Managed By Brian Kelly Capital Own (ANDE)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (FCX)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (UGA)
Accounts Managed By Brian Kelly Capital Own (RTH)
Accounts Managed By Brian Kelly Capital Own (SLV)
Accounts Managed By Brian Kelly Capital Own (TBT)
Accounts Managed By Brian Kelly Capital Are Short the British Pound
Accounts Managed By Brian Kelly Capital Are Short the Yen

For Zachary Karabell
River Twice Capital is short (XLF)
River Twice Capital and Karabell own (BIDU)
River Twice Capital and Karabell own (POT)
River Twice Capital owns (MON)

For Dennis Gartman
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Long the Australian Dollar
Funds Managed By Dennis Gartman Are Long WTI CRUDE
Funds Managed By Dennis Gartman Are Long the Canadian Dollar
Funds Managed By Dennis Gartman Are Long the Swiss Franc
Funds Managed By Dennis Gartman Are Long Corn
Funds Managed By Dennis Gartman Are Long Soybeans
Funds Managed By Dennis Gartman Are Short Brent
Funds Managed By Dennis Gartman Are Short the Yen
Funds Managed By Dennis Gartman Are Short the Euro
Funds Managed By Dennis Gartman Are Short the BRITISH POUND SILVER
Funds Managed By Dennis Gartman Are Short COPPER
Funds Managed By Dennis Gartman Are Short the S&P 500 INDEX
Funds Managed By Dennis Gartman Are Short the DOW JONES

For Mary Ann Bartels
**No Disclosures

For Nick Bennenbroek
**No Disclosures



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