, Columnist
Italian Bonds Are Missing Their Cavalry
A government of experts will struggle to get yields down on a `no' vote
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The Dec. 4 Italian referendum on constitutional reform is not looking good for Prime Minister Matteo Renzi, if the polls are to be believed. He's promised to resign if he loses, and on Saturday said that a technocratic government would most likely take his place.
This is, on the face of it, good news for Italian bonds, which did well the last time Italy was ruled by the so-called experts. In 2011, the European Central Bank's marked reluctance to support Italian government bonds drove 10-year yields above 7 percent -- this turned out to be the death knell for the premiership of Silvio Berlusconi, who left office that year to the sound of crowds chanting "buffoon, buffoon!"