Too Big To Bail?

Italy is under financial attack. And, oh yeah, France.

So yesterday we were all digesting the information that Greece was going to hold a referendum: meaning that the last deal didn’t even last a week. Today it gets much more exciting. As Paul Krugman notes, the yield on Italian debt is now over 6%. This is the sort of level where even if Italy wasn’t in trouble it would be, will be, simply because yields are over 6%.

But our day’s excitement doesn’t end there at all. We also see that French bond yields are rising strongly and that the EFSF has had to pull a bond issue.

We all really should have paid more attention to Polonius.

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