So it looks like Italy's 10-year bond yields have spiked to over 5.5%, their highest level since 1991. By comparison, US 10-year Treasuries yield under 3%.
Italy's problems
What does this mean? Well, smells like there might be contagion. Italy isn't Greece, but markets may be sending it down the same path. Greece had a whole bunch of big issues that I may detail in a future post, but Italy, while it has a lot of debt, also has a sustainable budget outlook (its budget runs fairly close to balanced). Their big issue economically is the Euro. Without an independent monetary policy to boost lagging growth, markets are starting to see them as another domino that could crumble if Greece goes. Still not necessarily likely, but definitely not an inviting thought.
Another casualty of the mess that was the Euro. Maybe I'll write a post about the Euro tonight or tomorrow...
No comments:
Post a Comment