The Dow Is Off 195, Italian Yields Are Blowing Out, Jefferies Is Falling, And Berlusconi Is Sounding Nuts

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This is proving to be a very hairy day.

To start, the Dow is off 195. At one point, after the non-farm payrolls report, futures were in positive territory, but all that’s been reversed.

It seems the situation in Europe is just too grim for U.S. stocks to ignore.

The most obvious sign of the grimness is the Italian-German 10-year bond spread, which continues to blow out. Nobody has any faith in Italy.

Not helping the matters is Silvio Berlusconi, who, frankly, sounds a bit delusional, admitting that the IMF has offered Italy assistance, while claiming that everything is great in Italy because — seriously — the restaurants remain full.

Evidently he doesn’t put much weight in this morning’s disastrous ISM Services number, which basically confirms a recession.

Of course, it’s not just Italy that’s seemingly in recession. German factory orders also had a big splat today.

Finally, going back to the domestic scene, Jefferies shares are falling, losing 6.2%, as it can’t escape that nagging feeling, which has been going on for a few days now, that it’s in trouble due to Europe.

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