Margins were raised on Italy's debt. End game? The market reaction is telling the EU officials to get their shit together.
Greece, establish your new PM, NOW.
Italy, Berlusconi, get out NOW. Implement your reforms, NOW. Establish a new PM, NOW.
Instead, the Southern EU states are fiddling while Rome is burning around them. I think the German and French are awfully close to whipping out Plan B. (If France's balance budget attempt is real, they should be able to keep their Triple A rating.)
If anyone is paying attention to the CDS levels of Ireland, Portugal and Spain are not as bad as one would think in relation to Italy. (Albeit, still pretty elevated, but Ireland shows very clear progress.)
Italy needs to do something now. I mean, today or tomorrow. If not, bank nationalizations galore. So long as there is no credit event, the markets should hold up, all considering.
Looking at SU, POT and SLB.