ULTRA-DOOM!!! Italy's 10 year bond rate breaches 7%

[russell]

Now why is it necessary for people to use this macho language when talking about finance?

no idea, BTW looks like Italy are going to get bent over and give a good rodgering by the markets.

[suityou01]

no idea, BTW looks like Italy are going to get bent over and give a good rodgering by the markets.

8% now.

Lube up my Italian chums

[d000hg]

For those of us less savvy on government bond markets, what does this mean?

It simply means investors are scared that Italian government debt is unsafe (or simply seee better places to put their money) and so the markets are demanding Italy pay 7% interest on its debts (loans if you like).
Now if you owe trillions, paying 7% is not doable, as interest payments are in the billions a year.
That's the gist, there are various subtleties.

Aww, Sas. I hoped you'd have let russell fumble some attempt at an answer first.

[MarillionFan]

8% now.

Lube up my Italian chums

Just hit 9%.

Dominos now offering 2 for 1 and a free bottle of coke!

[russell]

Aww, Sas. I hoped you'd have let russell fumble some attempt at an answer first.

I think Sas explained it OK, I would have done better but his was adequate.

HTH

[russell]

Just hit 9%.

Dominos now offering 2 for 1 and a free bottle of coke!

Its at 7.44200 I think the 9% is the increase today?

[Tensai]

Yesterday the consensus was that Italy would be screwed if yields reach 7%... which they have done today.

"With Italian yields now at 7.4% (at 11am), Italy will need a bailout if prices were to stay even roughly were they are."... until when?

But is there a critical date which will crystalise the problem, e.g. a rollover date on debt repayments or something like that?

I can't frankly be arsed searching the web for this, and I know what a HUGELY well-informed bunch inhabit this cyber-island of knowledge.

[MrMark]

...making it more likely that they can't maintain the payments on the money they do borrow, thereby forcing the yields even higher, making it even more likely they can't pay, and ultimately the holders of those bonds lose their money, or the public get sick of the whole bloody thing and revolt, and the holders of bonds lose their money. It all looks to me like a self fulfilling prophecy, and while I'm generally a supporter or free markets, I can understand why the middle classes in Europe and the US are starting to question the wisdom of it all.

WHS

[MarillionFan]

Yesterday the consensus was that Italy would be screwed if yields reach 7%... which they have done today.

"With Italian yields now at 7.4% (at 11am), Italy will need a bailout if prices were to stay even roughly were they are."... until when?

But is there a critical date which will crystalise the problem, e.g. a rollover date on debt repayments or something like that?

I can't frankly be arsed searching the web for this, and I know what a HUGELY well-informed bunch inhabit this cyber-island of knowledge.

It's not like the whole debt pile just became 7.4% FFS.

[doodab]

But is there a critical date which will crystalise the problem, e.g. a rollover date on debt repayments or something like that?

I can't frankly be arsed searching the web for this, and I know what a HUGELY well-informed bunch inhabit this cyber-island of knowledge.

They periodically auction new bonds in order to borrow more money (partially to repay the last lot) and everytime that happens they need to pay the new interest rate.