The Death of Italy Football???

is 2011 the year which Italy football die?

Italian clubs perform very poorly during the season with all their Uefa Europa League contenders eliminated (last surviving club was Napoli which was defeated by Villareal). All 3 of Italy representatives in Uefa Champions' League, AC Milan, Roma and Inter lost their home game and are expected to be eliminated. Italy serie A is officially ranked number 4 in Europe behind Spanish La Liga, English Premier League and German Bundesliga. There are speculation that Serie A will fall behind French Ligue 1 soon.

I started watching football since 1990 and 1990's was the decade where Italy football is the king of the world. Some call it "world cup league". The greatest and best football player played there.

From 1990 to 1999, European football was dominated by Italian Clubs. Uefa Champions' League (previously called European Cup), Europa Cup (at the time it was called Uefa Cup) and European Cup winners' Cup (now cancelled) were superbly dominated by Italian teams. Of the 10 UCL finals during that decade, Italian clubs played in 8 of them (only 1991 and 1999 saw no Italian representative).

Domestically, Italian serie A was the most watched and most exciting football league in the world. During the time, there were 7 giant clubs that controlled the serie A and any of the 7 teams could win it. Juventus, Inter, AC Milan, Fiorentina, Parma, Lazio and Roma were all giant teams in Europe winning multiple championships. Competition in serie A at the time was fierce and colourful. Player like Zinedine Zidane, Gabriel Batistuta, lothar Matthaus, Roberto Baggio, Ronaldo, Alessandro Del Piero and countless others pushed serie A to the top of the football world by substantial margin.

Today, serie A is just a boring and lifeless league full with teams that have no chance of competing in Europe and heavily in debt. Even the big teams like Milan and Juventus failed to keep up with the rest of the world especially clubs from Spain, England and Germany.

Inter is the only good team in Italy, winning last season UCL. However since the departure of Jose Maurinho, Inter, under the hand of Rafael Benitez and Leonardo, is slowly move towards mediocre European club.

So how can Italian Clubs improve?

1) Financial Management. The main reason Italian football fell into today's slump is poor financial management. Teams overspent every year and eventually, they did not money to even pay the wages of players. Invest wisely for players, focus more on player development and most importantly, attract foreign investors that can inject large sums of money (remember how Chelsea become a giant today).

2) Balance domestic league and European competition. Italian clubs generally focus more on domestic league. Focusing on European competition can attract fans outside Italy and ultimately increase number of viewers for Italian football.

3) Constantly changing. teams in Italian football need to change constantly to keep up with the pace of Spanish and English football. Tactics, technique, skills, mentality etc. need to have constant changes.

4) Marketing. Football need fans and Italy alone do not have enough fans. Marketing will attract fans outside Italy and revenue from sales and TV rights will improve. English football is the prime example of excellent marketing. Before mid 1990's English football was far inferior compared to serie A but now, they are wee superior.

5) Winning matches. Ultimately, football is about winning and winning is the best way of attracting fans.

Can Italian football overcome their recent slump or will 2011 be the death of italy football? I favor the first.

What really cause the fall???

Recently financial market take a big hit. Except for certain commodity markets (energy, precious metal), markets around the world tumbling significantly. We all know about the Egypt problem, China rate hike issue and currently Libya issue. However are these issue the reason market take such a big hit?

NO!

Markets have been rising constantly since the crisis 2007/2008. US markets are around 15% of the high in October of 2007. Some markets even surpass the 2007 high with significant margin. Since we know stock market is the reflection of real economics, one must wonder are we near the economic condition of 2006 or even better than 2006?

NO!

We are nowhere near 2006. We are not even close to it. In fact global economy today is worse than 2001 or 1993. So the question is why global financial markets keep on rising?

HOT MONEY!

Markets rising are not caused by improvement in real sector or monetary market, but only caused by hot money generated by unresponsible central bankers and hugely leveraged commercial and investment banks.

So why now?

We had similar problem before this. Greek debt issue, Dubai default, China inflation concern...... none of these caused any problem to the overall markets. Markets merely sniffed and continue higher. So why Egypt and Libya can cause such a big fuss?

Markets responce significantly on such issues shows that there are weaknesses in the bullish trend that we are having in recently run. The Egypt and Libya issues are just a need "the straw that broke the camels back". Markets are heavily overbought in monthly scale with RSI of over 80 for most of stock markets. Dividend per price for stocks are at historical low. VIX index just had a double bottom indicating risk incoming and volume of hot money is in trillions. Real portfolio investment data around the world shows that increment of 100% since 2009.

So, even without the Egypt and Libya problems, it is very likely that markets will have a U-turn. At the moment it is unclear whether the middle east political problem can cause any significant contraction to financial markets globally but the reality is there: we will have a huge contraction or at least, a significant retracement that will bring us back at least 30% of current level.