European Government Bond Spreads at Record Highs vs. Germany; 2-Year Spreads: Greece 30.09, Portugal 17.11, Ireland 16.58

10-Year Government Bond Yields and Spreads vs. Germany

Country	Yield	Change	Yield High	Spread	Spread High
Germany	2.67	-0.16		0
Portugal	13.31	+0.39	Y	10.64	Y
Ireland	13.34	+0.43	Y	10.67	Y
Greece	17.02	+0.16		14.35
Spain	5.96	+0.28	Y	3.29	Y
Italy	5.61	+0.34	Y	2.94	Y

2-Year Government Bond Yields and Spreads vs. Germany

Country	Yield	Change	Yield High	Spread	Spread High
Germany	1.25	-0.20		0
Portugal	18.36	+0.87	Y	17.11	Y
Ireland	17.83	+1.40	Y	16.58	Y
Greece	31.34	+0.96	Y	30.09	Y
Spain	4.18	+0.41	Y	2.93	Y
Italy	4.11	+0.60	Y	2.86	Y

Notice those incredible spreads on 2-year yields.
Greece 30.09, Portugal 17.11, Ireland 16.58

ECB president Jean-Claude Trichet can scream "no defaults" all he wants but the bond market simply will not go along. For the charts that made up this post, and for additional commentary, please see ...

• Bond Vigilantes Strike; Crisis in Italy Escalates; Portugal 2-Year Debt Hits 18.36%, Greece 31.34%, Ireland 17.83%; New Record High Spreads


• Invisible Elephant Now Visible; EU Ready to Tell Trichet to "Stuff It"; Help for Italy?

These numbers likely have Trichet and EU officials ***ting bricks. What are they going to do, up the size of the bailout fund to infinity?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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