Italy succeeds in auctioning 5-year notes

Despite the euro chatter, Italy managed to auction 5-year notes today. Granted, the yield was a lofty 6.29%, but that is simply feedback from the market as to the risk in Italy until they get their fiscal deficit under better control. On the bright sight, the cover ratio was 1.47%, meaning there was no shortage of demand for even Italy's debt.

 

The Italian/European debt "passion play" will remain full of drama for some time to come, but I am not persuaded that it is as bad as a lot of the diehard euro critics/skeptics are asserting.

 

The European debt issue will continue to have some impact on the U.S., but is more of a sideshow relative to the U.S.'s own debt/deficit issue and the outlook for the U.S. domestic economy itself. Even if the U.S. financial markets were to completely ignore Europe, there would continue to be enough anxiety to keep the U.S. financial markets on edge and highly volatile.

 

But for true, long-term investors like me (and Warren Buffett!), the anxiety and volatility is not enough to shake our long-term buy-and-hold mentality.

-- Jack Krupansky