The Greeks are in danger of descending into a disorderly default next month. I’m not surprised. As I’ve mentioned before, the Euro is not working for them, the ECB is not supporting them (they may not be able to according to their mandate) and the Germans are too busy patting themselves on their self-serving backs while scolding the buyers of their goods for having bought their goods with money borrowed from irresponsible lender Germany.
So far my prediction of an increase in Italian bond yields has not been going well, with Italian long bond yields down strong in the last few days and more so over the last month. I’m hopeful (self-servingly, I suppose) that this shock might push them back up.