The Blooey Factor (Krugman on possible Italy default)

[BootinUp]

A thought before tomorrow’s markets open in Europe: might we be seeing Italy go careening off the edge in the next few days? I mean, even more than it has?

(snip)

I can see this happening here. Most Italian debt may be held by stolid domestic players, but at the margin are financial institutions that are quite possibly going to be forced to cut their holdings if Italian interest rates rise, because this will reduce the value of the bonds they already hold. So things could quite possibly go blooey in the very near future.

Of course, this is yet another reason for the ECB to come in to short-circuit this process. Hello, Mario?

The next few days could be very interesting.

http://krugman.blogs.nytimes.com/2011/11/07/the-blooey-factor/

[Electric Monk]

1. k&r

&u&g&m&a&n

The next few days could be very interesting. Indeed.

[Electric Monk]

2. kick nt