Rome is Burning

Back when the debt ceiling was unresolved, I had said it would only be a matter of a week or so before Europe was back in the headlines.

Yesterday Berlusconi held a press conference to try to prop up the Italian market. Today the Italians said they had more funds in the treasury then had been anticipated, so they have cancelled debt auctions, which is likely a move to prevent further damage as the bond vigilantes focus in on Italy. Perhaps they learned a lesson from Greece, Ireland and Portugal?

At 9 a.m. the ECB stepped in and started buying Italian Bonds to try to prevent a rout.  That didn't last long as Italian and Portuguese bonds started selling off almost immediately.

Then this morning news broke from Reuters that Italian prosecutors have seized documents from Moody's and the S&P rating's agency, citing "anomalous" fluctuations in Italian shares... ?!?!?

Around 10 a.m. the entire FTSE MIB market went in to suspension!