This stat might blow your mind.
*ITALIAN TWO-YEAR NOTE YIELD DROPS TO RECORD-LOW 1.267% -Bloomberg
— Michael McDonough (@M_McDonough) April 22, 2013
That’s right, short-term Italian borrowing costs have fallen to an all-time low.
Over the weekend, the Italian parliament convinced President Napolitano to stay on for another 7-year term.
The President isn’t the Prime Minister, so Italy still lacks a proper government, after its split election in February, but the President does stuff like calls elections, and helps attempt to organise a government, so his agreement to stay in helps stability.
And beyond that, the thinking remains in Europe that the big countries will not be allowed to go bust. Even Italy.
They have horrendous growth problems that seem to be getting worse (and they lack a plan) but the actual sovereign debt problem just isn’t the big worry.
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