Italy

Italian 10 year yields hit 6.4% today before the ECB came in and pushed them back to 6.2%.  The Italian government seems to be in denial (read this article).  If CDS aren't worth anything because a credit-event can be deemed not-a-credit-event at will, its likely that banks will want to reduce their exposure to bigger risks, e.g., Italian bonds.  And with the ECB seeming to signal they are willing buyers, banks might decide to dump.  The risk-on rally today is a bit puzzling, given the deteriorating situation in Europe.  You really have to put on blinders to buy in this market - maybe Euro-fatigue has caused many to do just that...