[Two weeks ago], European leaders reached a Greek bailout deal. And the market rallied.

[ad#Google Adsense 336×280-IA]But last week, Greek Prime Minister, George Papandreou, decided to throw a wrench in plans by calling for a referendum to decide whether or not to accept the terms.

Seriously George? Are you trying to guarantee a default and throw the global financial markets into a tailspin?

I don’t think Greece will ultimately default. But here are some key dates to keep an eye on. Specifically, when the country needs to pay up on its debt obligations.

Let’s hope somebody set up a reminder in Outlook so George remembers to pay his country’s bills on time!

The Italian Problem

The fear over a big fat Greek default is that it’s going to spark a debt contagion and lead to other European countries defaulting, too.

And those fears are increasing, especially for Italy.

The spread between safe German government bonds and risky Italian government bonds went vertical this week. In fact, Italy’s 10-year bond yield hit 6.3%. That’s almost triple the yield on Germany’s 10-year bonds.

Keep an eye on this spread. If it keeps widening, we’re going to have an Italian problem on our hands, too.

Thanks and enjoy the weekend!

Ahead of the tape,

— Louis Basenese

[ad#jack p.s.]

Source:  Wall Street Daily