Italy Crosses the Event Horizon

This is the fate of all of us, if we don't square up.

Summary from Barclays Capital inst sales:

1) At this point, it seems Italy is now mathematically beyond point of no return
2) While reforms are necessary, in and of itself not be enough to prevent crisis
3) Reason? Simple math--growth and austerity not enough to offset cost of debt
4) On our ests, yields above 5.5% is inflection point where game is over
5) The danger:high rates reinforce stability concerns, leading to higher rates
6) and deeper conviction of a self sustaining credit event and eventual default
7) We think decisions at eurozone summit is step forward but EFSF not adequate
8) Time has run out--policy reforms not sufficient to break neg mkt dynamics

But America will do better, right?  Well, perhaps; but tonight's elections show Ohio voting against restrictions on unions, and re-elections of incumbents across the board.  

It may be that reason shall not save us, even with glowing examples before us; and therefore, we shall have the fire as well.