European Bond Yield Summary 7/24/12; Spanish Yield Curve Inversion

10-Year Yields:
Greece 27.91%
Portugal 10.92%
Spain 7.56%
Italy 6.37%
Belgium 2.73%
France 2.24%
Austria 2.03%
Netherlands 1.73%
Finland 1.53%
U.K. 1.52%
U.S. 1.45%
Germany 1.26%

France-Germany Spread 98
Spain-Germany Spread 630
Italy-Germany Spread 511
U.S.-Germany Spread 19

Spain 2-Year Yield 6.63%
Spain 5-Year Yield 7.53%
Spain 10-Year Yield 7.56%
Spain 30-Year Yield 7.53%

Italy 2-Year Yield 4.73%
Italy 5-Year Yield 6.00%
Italy 10-Year Yield 6.36%
Italy 30-Year Yield 6.76%

Moody's downgraded the outlook to negative for Germany, Netherlands and Luxemberg last evening, while maintaining Finland's rating. The downgrade has impacted the yields with the German 10-year jumping to 1.26% from 1.14% only 24 hours ago. Most Eurozone yields bumped up overnight increasing the debt stress.  While everyone watches Spain and Italy, Portugal is now on the verge of moving back above 11%.  Spain is at 7.56%, the exact level as 24 hour ago, only yesterday it was the peak for the day but today the yield simply wants to continue higher. The Netherlands and Finland yields jump 15 bips since yesterday. Austria is now up and over 2%.

Pay attention to the Spanish yield curve. The 5-year yield jumped 20 basis points since yesterday and now the curve is flat-lining and ready to invert for the 5's thru the 30's. Inversion indicates recession and troubled times and the need for a full fledged bailout of Spain as soon as possible. Spain's debt servicing is rising and the country has no growth, a terrible double whammy of trouble. Italy's yield curve now shows their 5-year at 6%. The Spain-Germany and Italy-Germany spreads continue to indicate serious stress in the Eurozone. The Troika meets today to discuss Greece, as the yield moves towards a ridiculous 28%. The European debt crisis is starting to spin out of control, contagion will spread from Spain to Italy, just as it spread from Ireland to Greece to Portugal to Spain. The U.S., U.K. and Japan are printing money allowing their economies to tread water. Lack of monetary sovereignty will create the European downfall.