Oh Crap... AUSTRIA?!?

And now we have to start talking about this.

It’s the Austria-German 10-year spread

chart

Photo: Bloomberg

The spread is widening further today, even as Italy improves and markets are rising.

What’s the deal with Austria? Well there have been persistent rumours about a downgrade, but furthermore, Austrian banks are famously exposed to Eastern Europe. And now you see stuff about how Slovenian yields are surging.

Too many fires to put out.

For a good background story on Austrian banks and exposure to Eastern Europe, see this NYT piece from last year.

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