Euroland- Fantasyland

As mentioned earlier regarding concerns over Italy as their economy is in the red-zone and the Spanish Banking Bailout becomes a huge drag on Italy, it seems bond traders are wasting no time, not wanting to be caught in a subordinated position with their holding's like Spanish Bond holders saw this week as an unintended consequence of a not so well thought-out (2.5 hours to be exact for $100 bn Euros) Spanish banking rescue. Italian Yields are rising today with Spain running right along with them.

Bond traders have figured out the name of the game from the Greek debt restructuring/Bond holder hair cut- buy Spanish English law bonds, short Spanish law bonds.

Just about an hour ago, some not so surprising news came out of Cyprus which has been hinting for days they are in trouble and may need extraordinary assistance (bailout), however it seems the new fashionable term for a bailout is a "Banking Sector Bailout".

• CYPRUS LIKELY TO HAVE TO SUPPORT ONE OF ITS BANKS, SHIARLY SAYS
• CYPRUS GOVERNMENT IN CLOSE CONTACT WITH EU ON BANKS: SHIARLY
• CYPRUS'S BANKING SYSTEM AT CRITICAL TURN, SHIARLY SAYS
• CYPRUS PREFERS PRIVATE SOLUTION TO EU BAILOUT FOR BANKS:SHIARLY

I'm sure they do prefer a private solution, but I think that boat sailed about a month ago when China announced it was giving up on the EU and seeking new opportunities in Africa.

I wonder if anyone remembers the "point of no return" post of about 3-4 weeks ago with Lehman as an example? Two bailouts now within a week?!

I think it is fair to say contagion is running amuck throughout Euroland. I'm just wondering how the Troika/Finance Ministers will mess this one up? And Suddenly Nigel Farage dosen't look like such an alarmist as the EU has clearly dismissed his warnings as attention seeking rants, they are quite entertaining, but the man speaks the truth.