European Bond Selloff Continues: Italy 2-Yr Yield 7.46%, Belgium 5.22%, Portugal 16.68%; Greek 1-Yr Yield 310%

The ECB, IMF, EMU, and EU are on the verge of multiple emergency meeting, if indeed meetings are not already underway. A quick check of the following bond spread tables and today's yield action will explain. Across the board, yields and spreads widened significantly today. Note in particular the jump in the 2-year bond yield of Belgium. Sovereign Debt Table 10-Year Bonds

The Guardian Business Blog reports 5.18pm: The results are in from Greece, and the new unity government has received an overwhelming vote of confidence. Of the 293 deputies who cast ballots, 255 MPs endorsed the motion while 38 rejected it.

Italy has a debt rollover needs and the market just shut off efficient funding across the entire yield curve. There is no place to hide while waiting for the long-end of the curve to calm down.Yields are above 7% from 2-year bonds all the way to 10-year bonds, with an inversion in 3-year and 5-year yields vs. 10-year yields. Moreover the 2-year yield is very close to inversion as well.Sovereign Debt Table Italy vs. Germany

The selloff on Spanish and Italian bonds continued today with yields in Spain hitting euro-era record highs. On the deficit side of matters, I do not believe Spain will meet its budget-deficit targets, and neither does Fitch. Fitch Managing Director Ed Parker said Spanish Prime Minister Mariano Rajoy will miss budget-deficit targets this year “by a substantial margin.” according to a Bloomberg report.

New Greek bonds are priced at roughly 22 cents on the dollar. Simply put, the market expects yet another credit event. Yet try buying CDS protection on the new Greek bonds. You can't. The Financial Times reports Greek yields up as CDS trading put on hold Yields on new Greek bonds have jumped sharply in the past week amid worries over a shutdown of the market in insurance-like products used to hedge the risk of holding Athens’ debt.

Yields on Italian and Spanish bonds are up once again, ahead of critical auctions for both countries. Italy 2-Year Government Bonds http://www.bloomberg.com/apps/quote?ticker=GBTPGR2:IND

The ECB has held off purchasing sovereign debt bonds in Europe the past two weeks and the results were easily predictable. Yield on 10-Year Italian debt is back over 7%. Italy 10-Year Government Bond Yield

Major Promises But No Reform Steen Jakobsen, chief economist at Saxo Bank in Denmark discusses the illusion of cheap money, bond market yields, and the lack of European reform in his latest email. In Spain, things are going from bad to worse. Last weekend's local election in Andalucia, where Spain’s centre right People’s Party failed to secure an outright majority, left Prime Minister Rajoy without a mandate to carry on with tough austerity.