Italian Yield

Until  can afford a Bloomberg Terminal (HA!) I'm looking at the latest headlines and all I know for sure is the yield is over 7% today as per IB Times. Additionally, as to what that means in real terms to you, here's some context.

"Portugal, Ireland and Greece all were forced to accept a rescue package once their national bonds reached that emergency yield.

Moreover, Italy has to roll over more than 360 billion euros ($491 billion) of debt in 2012."

In other words, we are approaching the EU end game fast, there are still volatile events that may occur, the most obvious is LCH back peddling on the margin hike, but Goldman Sachs seems to think the margin will be increased by another 10%, of course yesterday they said a floor on Italian bonds was put in and no doubt selling them to their clients, which as of this morning may already be former clients on the massive loss they took overnight. The second thing will be ECB printing, although Germany will likely throw a fit, I think the ECB may not have any other choice. That would cause some upward volatility, but keeping the big picture in sight, as we have learned here in the US over the last 3 years, printing more money hasn't done anything to resolve the crisis and thus would be a blip.

The fact is, Italy has crossed the threshold, trust is greatly diminished. The Berlusconi news yesterday is yesterday's news and the market is now grappling with option #3 I pointed out last night in Barclay's assessment. Should LCH pull their margin hike, again it will cause a volatile spike, but further undermine trust and without consistency, investors will back away from Italian debt ever faster.

Europe is approaching the end game and look at the speed in which it has happened. Several weeks ago the fears were centered on Greece, a few weeks later which is a nano-second in market timelines, Italy is about to bring the entire EU crashing down.