El Cuaderno de Arena

La semana acaba peor que empezó. S&P degrada la deuda griega de AA+ a AA, dos niveles por debajo de´máximo. FT: Italia paga 8,13% anual por sus bonos a 3 años

Portada del Economist. This cannot go on for much longer. 
Without a dramatic change of heart by the ECB and by European leaders, 
the single currency could break up within weeks. Any number of events, 
from the failure of a big bank to the collapse of a government to more dud bond auctions,
 could cause its demise. In the last week of January, Italy must refinance more than 
€30 billion ($40 billion) of bonds. If the markets balk, and the ECB refuses to blink, 
the world’s third-biggest sovereign borrower could be pushed into default.economist.com

Bond yields on short-term Italian debt rose above 8 per cent on Friday as Rome was forced to pay euro-era high interest rates in what analysts called an “awful” auction.

A peak of 8.13 per cent was reached on three-year bonds, according to Reuters data, as Italian debt traded deeper into territory associated with bail-outs of Greece, Portugal and Ireland in the past 18 months.

Italy raised its targeted €10bn in an auction of two-year bonds and six-month bills but at sharply higher yields.

“Rates have skyrocketed. It’s simply not sustainable in the long run,” said Marc Ostwald, strategist at Monument Securities in London.

...Padhraic Garvey, interest rate strategist at ING in Amsterdam, said: “It’s not great, to be honest, not in good shape at all ... The pricing is awful.”

So-called “real money” managers – including pension funds and insurers – as well as banks have already begun offloading their holdings of “peripheral” European debt. There are fears that the contagion could spread to “core” European countries such as France and even Germany.