Can We Get an Update Ema?

We have a member smack dab right in the middle, or rather the northern end of Italy. The US news is horrible as far as covering anything abroad, if you have ever travelled abroad, you would agree that European news overage of world events is much better then US coverage. We pretty much only cover countries no one in the US has heard of when we are dropping bombs from predator drones.

In any case, Ema, out Italian member has a good grasp on Italian politics which are fluid to say the least today.

As I posted this weekend, the ECB has made a lot of noise this weekend about halting purchases of Italian 10 years or any bonds if the country they are buying to support isn't dong their part. I think Silvio falling asleep several times at the G20 summit while Italy was under discussion may have been part of the catalyst for the weekend statement. However as I continue to point out, the PIIGS know they hold the trump card as the EFSF can't even raise $3 billion is bond purchases, much less a trillion! The EFSF was crafted mainly for Greece (whether they really want it or not, who knows), it doesn't have the size (even if the imaginary box is filled with $1 Trillion Euros) to do anything should Italy's borrowing costs look them out of the market, so no matter what Draghi says, Silvio knows if they let Italy fall, the entire EU falls.

From ECB warnings of no more purchases to 5 interventions today...

Here we have 5 ECB interventions in the Italian 10 year, yet the bond is now trading below all of the interventions making the ECB investment sort of worthless.

There's good evidence to suggest when the 6% threshold is broken and debt becomes "unsustainable" that it accelerates from there, just as Greece, Portugal and Ireland did. This means that focus is squarely off Greece in the bond market and squarely on Italy and Italy doesn't have much time and the EU doesn't have much time to get this under control. If Italy falls, as the 3rd largest EU economy, so goes Europe. Bonds aren't very interesting for equity traders, but this is a stark warning of things unravelling at an accelerating pace; which does have implications for equities.

Italian 10 years are now at 6.66% and the November 10th auction has been cancelled for obvious reasons.

So Ema, if you have any update as to what is going on politically or have access to Silvio's Facebook account, let us know. Something is certainly stirring the Italian bond market today, despite 5 ECB interventions.