Saturday, November 5, 2011

Pressure on Italy

Italy is under pressure from the bond markets, and Silvio Berlusconi is under pressure from his counterparts in France, Germany, the US, and the IMF. This is the big enchilada. If Italy goes--and at a 450 basis point spread over Germany, it's on the brink--France, which has considerable bank exposure to its southern neighbor, will be in serious difficulty.

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