BTPs Break 7% Again On Italian Downgrade Rumors

Tyler Durden's picture

Chatter across European bond desks that a sovereign downgrade is nigh has sent BTP spreads and yields soaring. ECB buying earlier is now under-water once again.

and BTP spreads to Bunds breaks back above 525bps

2s10s is bear flattening also - not a good day for Monti...

Chart: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
mayhem_korner's picture



I remember when 7% interest was kinda normal.

mayhem_korner's picture



I also remember when "sovereign" meant something different than "dependent upon everyone else papering over your lack of discipline."

High Plains Drifter's picture

 a sovereign is a very nice gold coin..........

Oh regional Indian's picture

Here in India, it is still normal.

Connedsumers pay 11-15% for home loans, 10-12% for vehicles.... governmant debt is just in the sub 10% range.

Different worlds.


Mandelbrot Magic

spanish inquisition's picture

Selfish bastards! If you would lever up on your economy, rates would drop and GDP would increase along with taxes. You could then buy European government debt to support them and take the pressure off Mario for a day or two. Sounds like India is just backward enough to still think that gold is money. (hehe...)

Oh regional Indian's picture

Hah! Indian's do. India? As in Goobermint? Don't think so.

Same old Deficit Spending, Keynesian bullshit with a huge dollop of corruption for taste.


ItsDanger's picture

I remember when countries didnt have so much debt.

Buck Johnson's picture

It broke and stayed over the 7% and this was considered the final straw for other economies that needed bailing out.  But also France and Spain interest rates on bonds are going up also, I think the death spiral is increasing and they are playing this day by day now.

slaughterer's picture

S&P had another server slip-up?  

Ancona's picture

Put some sauce on it's done.

slaughterer's picture

Bring back Bunga Bunga.  

Gandalf6900's picture


Mark123's picture

at least his name sounded like a precious metal.

Cdad's picture

So...are risk managers at BLK tapping Larry Fink on the shoulder just now?

oogs66's picture

its only a loss or bad decision in the real world, not in merkozyville

dereksatkinson's picture

I don't think we see a downgrade until after Monti has had a few weeks.  Rating agencies aren't going to put their nuts on the line when governments are already this hostile towards them.   Even if Italy DESERVES to be downgraded, I think the downgrade will come in the form of higher rates and NOT some rating agency.

a growing concern's picture

Egan Jones might.  They're like the honey badger.  They just don't give a shit.

SheepDog-One's picture

Honey badgers really dont give a shit, if its hungry, its eating something, it just takes what it wants.

The Crazy Nastyass Honey Badger (original narration by Randall) - YouTube

Jean's picture

This represents a big opportunity for Egan Jones, they keep calling spades, spades while the big guys maintain their "working" relationships with governments - soon they will be the goto rating and the others a Car and Driver like window dressing.

a growing concern's picture

I think it's clear that no one besides Egan Jones has any amount of credibility anymore.  They are just the paid mouthpieces who happen to do something unfavorable in their ratings just often enough to keep up a slight veneer of credibility.

taraxias's picture

Forget the rating agencies, the bond markets have already rated these deadbeats.......UP UP AND AWAY with yields baby.

Jean's picture

Do they still have a prescence in Italy, or did they pull up stakes after they got raided?

DeadFred's picture

When I read the ratings reports countries get scored on a lot of attributes that sort of sum up to an evaluation of "is this a third world banana republic trying to support its regime through manipulating the economy or is it a free market". Banning short selling, CDSs, putting politcal and legal pressure on the rating agencies, calling a default voluntary... I think the fruit flies will like the smell.

rubearish10's picture

That's alright, the US Faux economic turnaround will make the pain disappear. Thank you big corporate and all that offshore profit bulldozing!

AngryGerman's picture

7%. who cares? let it go up to 15%. nobody will give a shit. country is broke anyway, they rely on germany for funding in the future. realize. accept. move on. please, bitch!

Taterboy's picture

I know exactly what Europe's problem is....NO FIVE GUYS!

Jean's picture

and we can't seem to pull off Moules-frites as cheap fast eats, wtf

Stack Trace's picture

Shows us all how ineffectual the "leadership change is good" story has been. Euro is toast and the US "faux recovery" revealed for what it is.

Never mind $100 oil, z-super-duper-dud-kommittee, aging demographics, increasing protests, continued unemployment....on and on. But hey, time to be bullish.

SheepDog-One's picture

Yep, bullish on equities which havent even budged, inflation adjusted, in over 20 years. What the bulls are all excited about, I have no idea.

homersimpson's picture

Let's throw some FAZ on that bad boy!

Hedgetard55's picture

Is this why BAC is up 3% today?

d00daa's picture

well golly you better jump in with both hands buying then, right????   bwahahahahahahahahahaha!  let me know how that works out for you.


Ivanovich's picture go green.  Some one or some thing is holding these things up.  A day like today should force everything (inclusive of the Euro) into the red.  Who is the magic hand supporting it all?  Banana Ben?

SheepDog-One's picture

Yea theyve worked for years to implode the system, now spend all their days keeping it up...what are they waiting for? Do they have cold feet? Or has something gone wrong?

I dont really give a shit, Im a honey badger, Im going to go eat some larva and a cobra.

Ragnar24's picture

Yeah I'm not sure how some slightly positive econ data fully offsets the seriousness of the Europe tragedy unfolding... especially considering the qualifying factors of said data, e.g. retail sales likely driven by iPhone frenzy and possibly some inflation.

Peter K's picture

Sounds like time for a EUR/USD positive rumor? The fixing of interest rate ceilings isn't doing what it was supposed to today. I suggest the ECB splits into a good bank and bad bank. And unlimited PIIG debt buying of course:)

topcallingtroll's picture

Yeah I hope so.

Reality is interfering with my Santa rally thesis.

vegas's picture

The talking heads must really love this shit now. They were ga-ga over yields at 6%. Can't wait to see how much love they are in when it gets over 10. Attention money honeys at CNBC: yields are high for a reason.

BlueStreet's picture

This market sucks out loud.  Starting to wonder if it isn't time to stick a fork in the year.  

mayhem_korner's picture



Do you think next year will be better?  I think so because I believe PMs and other real stuff will have another 25%+ gain in 2012.

dereksatkinson's picture

Given the climate, no rating agency is going to be stupid enough..  Governments will destroy the people at these agencies. Both personally and professionally.


If Egan jones or any other rating agency downgrades a sovereign in this environment, i'd fully expect rape accusation or child porn charges to be thrown against their CEO.  Governments are in FULL attack mode.

SheepDog-One's picture

Yep, the FED pulled out the last of its dry powder with a lame announcement that ZIRP is now permanent policy far as the eye can see, and didnt even get markets green? Too funny. Gold and oil continue to rise though.

HelluvaEngineer's picture

These markets are so thin, wonder when we will go bidless?  Even bulls don't seem to give a shit.

vote_libertarian_party's picture

Higher interest's a sign of STRENGTH!!!


buy buy buy.....yepper