Posted on 12/29/2010 12:28:17 PM PST by bruinbirdman
Italy's borrowing costs have jumped to the highest level since the financial crisis over two years ago, raising concerns that Europe's biggest debtor may slip from the eurozone's stable core into the high-risk group on the periphery.
Yields on 10-year bonds rose 10 basis points to 4.86pc after a poor auction of short-term debt in Rome. The Italian treasury had to pay 1.7pc to sell €8.5bn (£7.2bn) of six-month bills in a thin post-Christmas market, up from 1.48pc a month ago.
The spike in rates came as money supply data released by the European Central Bank showed that real M1 deposits have collapsed at a rate of 2.8pc over the last six months in the EMU bloc of Italy, Spain, Greece, Ireland and Portugal, even though they are rising in northern Europe.
"This is comparable with the decline in early 2008 just ahead of the plunge into recession," said Simon Ward from Henderson Global Investors. "The eurozone periphery is locked into a 'double dip' that will undermine fiscal consolidation."
Italy's M1 contraction began later than elsewhere in southern Europe but is now accelerating. M1 typically gives advance warning of economic shifts by six to nine months.
Mr Ward said signs of recovery in the ECB's broader M3 money data is less reassuring than it looks since the gauge was temporarily boosted by flight to liquid assets on EMU debt worries.
The poor auction in Rome may be a warning sign that EU leaders offered too little to restore confidence at their Brussels summit two weeks ago.
German Chancellor Angela Merkel vetoed the creation of eurobonds or any serious move towards fiscal union, and shot down calls for an increase in the eurozone's €440bn emergency loan fund. The ECB has so far refused to step in to the
(Excerpt) Read more at telegraph.co.uk ...
If you’re in the Red Zone........Kick a field goal!..............
ping
What happened to Spain?
I had Spain in the Euro Dead Pool.
“Simon Ward from Henderson Global Investors. “The eurozone periphery is locked into a ‘double dip’ that will undermine fiscal consolidation.”
Today, the politicians are wishing they were not in office.
Belgium looked to be a dark horse in the pool. Maybe they will all jump together?
Spain will be soon
Newly Built Ghost Towns Haunt Banks in Spain
http://www.nytimes.com/2010/12/18/world/europe/18spain.html?_r=2&em=&pagewanted=all
Spain on the Verge of a Nervous Breakdown
http://www.foreignpolicy.com/articles/2010/12/03spain_on_the_verge_of_a_nervous_breakdown?page=0,0
Well, that makes it unanimous.
I had Spain in the Euro Dead Pool.
Greek bonds strengthen
10 year yield 12.49%
approaching all time high of 12.65%
Go Greeks!
http://www.bloomberg.com/apps/quote?ticker=GGGB10YR:IND#chart
Moral of the global debt story... Man cannot live by debt alone. Nobody can live forever on future income. At some point, the future shows up and demands its pound of flesh. Ask the Venetian merchants. They’ll tell ya!
Ask Germans crushed under the heel of WWI reparations (rape-arations?)
Marxism, the opiate of the intellectual.
yitbos
LOL!
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