It turned out the markets didn’t have an awful day. Italian bond yields are actually markedly down. So I was wrong about markets being ugly as a result of the ill-conceived plans for the Euro Zone.
Call me stubborn perhaps, but I firmly believe the agreement is an awful one. It doesn’t address the primary problems of the Euro Zone, doesn’t restore competitiveness to Southern countries, doesn’t address the problem of a lack of a true, unlimited lender of last resort and most importantly, probably won’t get ratified by the populations of the individual countries.
I may have read the markets incorrectly for today, but I am as convinced as ever that the problems have not been solved. Watch this space, there is more trouble ahead. (Felix Salmon, amongst others, feels similarly.)
Prediction: Italian bond yields will be above 8% at some point before the end of 2012 or at least one country will have left the Euro.