Absolute bloodbath in Europe:
Italian 10-Year Bonds Extend Drop; Yield Climbs to 6 Percent
Spain 10-Year Bond Yield Surges to Euro-Era Record 6.31 Percent
Monday, Bloody Monday... For European Bonds Zerohedge
The True Elephant In The Room Appears: Trillions In Commercial And Industrial Loans To Europe's Insolvent Countries
With the market's attention over the past year exclusively focused on bank holdings of insolvent European sovereign debt, which as is now well known had been declining for months, many if not all forgot that banks also have credit exposure via far simpler conduits: retail and commercial debt. And as an analysis of the full disclosure in the EBA's second stress test exposes, banks are on the hook for literally trillions in various plain-vanilla commercial and retail loans to individuals and businesses. WSJ's David Enrich summarizes it best: "Friday's test results shed light on another potential problem for Europe's banks: huge piles of residential mortgages, small-business loans, corporate debt and commercial real-estate loans to institutions and individuals from ailing countries. As those economies struggle, the odds of rising defaults grow." Oops.
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