Today Italy was selling governmental bonds for 10 billion euro. Of these 10 billion bonds sold then 7 billion was for 1 year and the interest rate was as low as 0.7%. The question is what does this mean? Is it a Cyprus effect that we are seeing?
Could it be that rich people in Italy are confident that Italy will survive the next year and that they think they will have a continued recession so buying bonds will be safer in comparison to finding out how safe your bank is from going insolvent and be forced to make a "buy-in" with this money that are over 100k € on the bank accounts. Personally getting that cash converted to stocks does not mean that it has to become a bad deal... it might as well become very profitable when the bank turns the losses to profits!
Eitherway I am happy that the Italians now with their new government manage to sell their bonds with a fair interest rate and if that money comes from the italians themselves then why not.
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