Greece Is No Longer The Ugliest PIIG In Europe

For the first time since July 2007, Greece is no longer the ugliest PIIGS nation in Europe.

The last week has seen Italy sell 5.5 billion euros worth of 183-day bills at an average yield of 1.213% (the worst since Feb 2013) and Greece sell 1.625 billion euros worth of 183-day bills at an average yield of 0.85% (near its lowest since Oct 2009); meaning that Italian short-dated debt is perceived as more risky than Greece for the first time in almost 11 years...

European traders are noting that the front page of Italy's Corriere Della Sera is highlighting this historic moment for Italian risk...

Notably, Italy's next sale is scheduled for June 12 so prepare for more negative headlines if those yields stay elevated.


HominyTwin Fri, 06/08/2018 - 12:01 Permalink

"Perceived"? What bullshit. Tyler, I know sometimes that addressing you in comments is kind of pointless, but I mean, come on. The ECB determines the price of all sovereign bonds in the EU. If they choose to let up in their buying of Italian sovereign debt, then the price of the bonds goes down. So basically, your headline should state: "ECB buys less Italian government debt, more Greek debt, making Italy the ugliest PIIG in Europe until Italians learn their place and keep the status quo that is slowly destroying them."

itstippy HominyTwin Fri, 06/08/2018 - 12:33 Permalink

The U.S. 6 month T Bill is at 2.08% right now, higher than Italy or Greece.  Why would anyone but the ECB buy their crap paper?

What a farce the Central Banks have made of things.  Meanwhile, legions of assholes at the major banks are making big salaries "analyzing" the price action.  They have to jet around the World and stay at first class hotels to attend meetings so they can stay on top of government bond price action.  Hell, they might as well be handicapping pro rastlin'. 

There is no legitimate price discovery; assets are allocated based on political agendas, not economic principles.

In reply to by HominyTwin

Let it Go Fri, 06/08/2018 - 14:16 Permalink

With Italy's bonds taking a hit and the country facing political turmoil it is clear this did not occur overnight. All in all, it might be fair to say Italy is a European debt bomb waiting to explode.

Much like what happened in Greece the situation in Italy is not sustainable and will not go away.

Italy has been held together only because of the direct intervention of the ECB which made over 102 billion euros of Italian bond purchases in 2011-2012 alone. The article below presents an overall look at how things got this bad.

 http://Italy Update - How Italy Got Into Its Current Mess.html