Italy calls emergency meeting to deal with European debt crisis

The Telegraph is reporting that the euro zone sovereign debt crisis has reached such a critical flash point that Italy has called an emergency meeting. In Spain, the Prime Minister has delayed his summer holidays to deal with the fallout.

Italy’s economic and finance minister Giulio Tremonti is due to meet officials from the Bank of Italy and market regulators less than two weeks after ministers agreed a €159bn (£140bn) second bail-out for Greece.

Concerns that Spain and Italy will be the next victims of the eurozone crisis drove benchmark bond yields to all-time highs and unsettled stock markets.

Yields on 10-year Spanish government bonds rose 25 basis points to 6.426pc, while Italy’s 10-year bonds also hit highs of 6.219pc -edging closer to the 7pc levels that forced its smaller Greek and Portuguese neighbours to ask for a bail-out.

I feel like I’ve covered this one but I should note that the yields on US, British and German debt are falling fast as it is now clear that economic weakness is spreading rather quickly.

Gold is surging and is now at $1643 per ounce. Notice the blurb in the chart of the day post on German yields shows financial repression has even hit Germany where we see first negative yields on 10-year since 1957. Gold is mostly about currency revulsion these days given financial repression and negative real yields.

The stock market is down today, this time due to European action, rather than U.S. action.

So we have duelling crises in America and Europe. Marshall Auerback says that, in Europe and the US, it’s case of “anything you can do, I can do better” in a bad way. He sent me the following video link to make his case.

What do you think, is the U.S. Betty Hutton or Howard Keel?