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Warning: Italian Debt Breaking Down

Wednesday, November 9, 2011, 7:44 AM
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Okay folks, the alert I sent out is close to being validated this morning. I am watching Italian debt yields spiking in real time. Just a few weeks ago, the world was wringing its hands over Italian debt breaching the 6% mark. By late yesterday there was growing concern that Italian debt had climbed past 6.5%, and there was speculation that it might even -- gasp! -- be headed towards 7%.

Well, this morning Italian debt roared right through the 7% mark, and as of 5:37 a.m. (the time of this writing) we are seeing these shocking yields: Italy 10-year 7.37%; 5-year 7.64%; 2-year 8.03%.

What can I tell you? Simply that the game is entering a new phase, one that includes the risk of a massive, systemic banking failure as a possible feature.

 

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