Events

I tried to keep you up to speed on weekend events, but they are coming in faster then I could even link them. The most important events other then what has already transpired, include the following:

The EU road map/empty box of dreams, plan, whatever it is, is not doing what it was supposed to do as of yet. The thought was that bonds would immediately get some support and lower borrowing costs for the EU countries in trouble, that lasted 1 day while the German borrowing costs went up. Italy sold more 10 year bonds that priced at a multi decade high yield of 6.153 (higher then before the entered the Euro) until ECB buying brought the yield back down to 6.122%. With Italy being the 3rd largest EU economy and the bond vigilantes still or rather are stepping up their demands on yields, this does not bode well for further contagion as already discussed, the EFSF is large enough to take care of Greece and hopefully head off further contagion, as Bloomberg suggests, it's about 1/3 the size it needs to be (3 trillion Euros) to be truly effective. An Italian default is not within the means of the EFSF.

As for "A" EFSF bond buyer, Japan, they have stated they will continue buying the bonds, however, the pace at which they do will likely slow. That's pretty much the opposite of what was intended in creating the EFSF and "plan".

Get ready for the Greek riot cams as Greece says they have paid out about $8 billion euros in fraudulent pensions and intend on recovering every penny from those that received it. Throw on top of that the pension fund being cut in half roughly via "the plan" and we should see Greek strikes resuming shortly.

As for economic data from the EU, not so good...


German retail sales 0.4% M/m vs est. 1.0%
 Italian unemployment 8.3% vs est. 7.9%
Norwegian retail sales -0.5% M/m vs est. +0.2%