As hope fades of an ECB-funded lift to their bonds, Spain's Rajoy and Italy's Monti skip hand in hand to a press conference where they just agreed that water is wet and the sky is blue and that:
- *RAJOY: WE WANT BANKING UNION, FISCAL UNION SOON (and ponies)
- *RAJOY SAYS WE ARE ASKING GREAT SACRIFICES FROM CITIZENS
- *RAJOY SAYS SPAIN, ITALY CONVINCED ON NEED FOR BUDGET CUTS
But, as the market is indicating - no request for a bailout (why would they need that?) - and so Italian and Spanish bond yields are soaring and EURUSD is plunging further. It seems the Kubler-Ross model remains front-and-ceter with denial critical as beggars once again believe they can be choosers but the inexorable belief that they can magically grow their way out of over a decade of debt-fueled excess remains. (Spain 10Y Spread +65bps now from pre-Dragi and Italy +62bps)