An unpleasant experience for German debt as a Bund issue fails, a third being left unsold.
This is a time for Frau Merkel to show some mettle, economic contagion is no respecter of persons or reputations. The German economy has progressively become the bulwark, especially in the euro zone. Whereas this local difficulty may have the euro at the heart of it, there is more than just a German concern. This in turn may require some radical thinking in Berlin; that is, one that looks outward. Like it or not, the euro problem is yours to fix.
Better news is the presence on Mario Monti; we hope that he will steady the Italian boat.
Was the bund failure simply that the yield was too parsimonious? Maybe, but trading in 10 year Bunds has posted a high of 2.12, with expectations of 2.15%. Futures only confirmed the trend.
We see this as a warning. Apply the spurs Mutti, and hesitate no longer. You are cast as the eurozone leader, which raises Wagnerian visions in some of us, take heed of the careless Rhine maidens, we don't want Gotterdammerung.