Zero Hedge: The much dreaded LCH margin hike came and went and while initially the market thought it was just a joke as nothing bad is ever allowed to happen anymore in these neverneverland markets, a few hours later the realization that this is all too real has finally dawned. The result is an epic bloodbath everywhere, but nowhere more so than in Europe, where one can kiss Italian bonds goodbye, and shortly French too, as the bond vigilantes demand that the ECB print now or else. Visually this is presented as follows: a 30 point drop in the ES, an unseen collapse in Italian bonds, and an explosion in the French-Bund spread. And since nobody can demonize CDS any more, we expect Europe to make selling sovereign bonds illegal next.
By the CNN Wire Staff
Rome (CNN) — The eurozone debt crisis deepened Wednesday as the yield on Italian bonds rose above 7%, the level at which countries are at risk of being unable to fund themselves and more likely to seek international bailouts.
The pricing — set by traders who are selling Italy’s bonds — hit 7.3% by mid morning after breaking through 7% a short while earlier. “It’s like tectonic plates,” one desk analyst told CNN. “You have this pressure and then it breaks.”
On Tuesday, the bond yield spiked to 6.77% after the country’s Prime Minister Silvio Berlusconi won a parliamentary vote approving a new budget that includes austerity measures sought by international lenders, but lost his majority in parliament.
With this bad news from Europe, the Dow Jones is set to open 200 points down.
Looks like we are heading for a free fall. Hold on tight!
Thanks for the links Jackie.