DISASTER: ITALY GETS DEMOLISHED, SPAIN FALLS, AND YIELDS SURGE AFTER BAILOUT

explosion mushroom cloud

Photo: flickr: AZRainman

Italy closed down 2.8 per cent, Spain fell 0.5 per cent, and yields soared in Spain and Italy as any enthusiasm vanished about a Spanish bank bailout.Yields on 10-year Italian and Spanish bonds surged, passing important benchmarks and closing at 6.52 per cent and 6.04 per cent, respectively.

European markets had begun the day with an epic rally, but all major indices had erased gains by the end of the day.

The sell-off suggested that investors are less than pleased with the Spanish bailout, in particular the fact that lending from European bailout funds would likely subordinate government bondholders, even as Spain still attempts to tap the markets for funding.

Here are some of the scariest charts of the day…

The Italian FTSE MIB (down 2.8%):

chart

Photo: Yahoo Finance

Italian 10-year government bonds (up 26 bps):

chart

Photo: Bloomberg

And Spanish 10-year government bonds (29 bps):

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Photo: Bloomberg

MORE: Here’s A 90-Second Guide To The Spanish Bailout >

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