Italian bond crisis passes

Thanks to the ECB long term refinancing operation (LTRO1 and LTRO2), and Italy meeting its fiscal goals for the quarter, the interest rates on the 10 year bond have come down well out of the crisis levels of 2011.

The close today below 5% was the best since last August. This is a big relief because there may not have been a non-market plan for Italy that would have worked. Attention remains on Greece, Spain, and Portugal, with particular attention to the Greece bond payment due March 20.

The LTRO was not really a solution because the banks have to gigantic balloon payments to make 3 years from now, but that's 3 years from now.