Silvio does sovereign debt

EurActiv is reporting that Luca Cordero di Montezemolo, chairman of sportscar maker Ferrari, has called for Silvio Berlusconi to step down as prime minister of Italy in favour of a government of 'national salvation'.

What Italy is to save itself from is concisely illustrated by our chart on the left - a home rolled combination of spread and curve designed so that no one misses the point. The Italian short end, the point at which investor fears of default express themselves, is starting to go spastic. The Italian 2-year is currently yielding a mere 20 bps below the Spain 10.

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