US hedge funds bet against Italian bonds

US hedge funds are placing large bets against the value of Italian government debt, directly shorting the bonds of the eurozone’s most indebted country by total debt outstanding.

The funds have increased the size of short positions in the last month, speculating that investor concerns over the country’s ability to fund itself may spread from Europe’s periphery to Italy, according to investors in the funds briefed on the strategy.

http://www.ft.com/intl/cms/s/0/e1b83238-aae6-11e0-b4d8-00144feabdc0.html#axzz1RinvQB7A

If there is any doubt who is orchestrating the Anti European bias EC President Barroso was talking about - read this article to understand

1) Which media outlets are supporting the scenario
2) Who the culprits behinds the European debt fear mongering is

Ridiculous.

 

What is the yield on the italian bonds?

 

10y BTPS are roughly 250bps over bunds or 5.25%.

 

http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND&n=y

Italy 10 year government bond interest rate might be 5.271 %.

<img src=http://www.bloomberg.com/apps/chart?h=200&w=280&range=1y&type=gp_line&cfg=BQuoteComp_10.xml&ticks=GBTPGR10%3AIND&img=png \img>

 

So you blame some hedge funds for sovereign debt problems? Italy is a victim. Hmm... Are market players not supposed to see what a disaster Italy is? Maybe they should just be good sports and buy Italian debt, and some Somali debt too.

 

I think the latest Italian problems are entirely of their own creation. The whole Berlusconi/Tremonti saga is a total disgrace. If Tremonti goes, I think there's really not much hope for Italy, with Bunga-Bunga Boy fully in charge.

 

hedgies probably knew something...

Exclusive: EU calls emergency meeting as crisis stalks Italy

http://news.yahoo.com/exclusive-eu-calls-emergency-meeting-debt-crisis-140800664.html

 

270bps spread to bunds today; 10y yield at 5.44%

It ain't pretty.

 

Real horrorshow this.

It's starting to resemble the end for the Eurozone if nobody stands in front of the financial freight train rolling through the Italian bonds. I can't believe how relaxed the politicians are being about it, considering they are the only ones who are remotely able to break this trend.

 

Thing is that it's not too far from business as usual in Italian politics. Problem, of course, is that these aren't usual times. Now is not the time for Bunga Bunga.