Spreading Eurozone Contagion - by Stephen Lendman
Cratering Eurozone economies.
The operative word is contagion. It's malignant and spreading because it's unresolved and irresponsibly addressed.
Germany, Europe's strongest economy, just had its worst ever bond auction since 1999. Over a third of 10-year bunds offered were unsold. More on the failure below.
Comparable Italian yields jumped to 7.3%. Italy's two-year bond hit 7.7%. The inverted curve signals tougher times ahead. Italy also sold six-month bills at 6.50%, its highest rate in 14 years.
Troubled Spain had to pay 5.11% for three-month money, the highest short-term rate since formation of Europe's Economic and Monetary Union (EMU) in 1999.
Other Eurozone rates also rose, including Portugal's after Fitch downgraded its debt to junk and retained a negative outlook. Hungary was downgraded to junk as well with a negative outlook. Yields there jumped close to 10%. Belgium's in trouble. So are France and Britain. Credit default swaps on European sovereign debt and banks reached all-time highs.
Earlier in the week French bonds were hammered. Europe's debt crisis moved from periphery countries to core ones. Many believe the Eurozone can't survive, except perhaps with fewer stronger members.