Markets tumble on EU debt crisis fears: "Spain, Italy's borrowing costs nearing the "point of no

Mounting fears that politicians will fail to resolve the eurozone's debt crisis sent markets sliding and Spain and Italy's borrowing costs nearing the "point of no return".

Investors are unconvinced that the euro-sharing nations will manage to reach agreement on a second bail-out for Greece before Thursday's crunch summit in Brussels.

Continued deadlock over how to contain the crisis raises the risk of Athens being forced into a disorderly default, which could wreak havoc on the global financial system, or of other, bigger economies becoming swept up also.

The yields, or returns, on Spanish and Italian 10-year government debt hit euro-era highs over 6pc as investors demanded greater reward to shoulder the risk. The borrowing costs implied by such yields close to the levels where governments can not afford to fund themselves and must be bailed out, said analysts.

"If we reach 7pc on Spain and Italy, we are probably approaching very quickly the point of no return," said Nicola Marinelli, a fund manager at Glendevon King Asset Management. "Once the market is shut, it is shut for good. The examples of Greece, Portugal and Ireland are clear."

Markets tumble on EU debt crisis fears: Spain and Italy's borrowing costs nearing the '"point of no return'"

The 7% threshold, once that is breached it is anticipated that the governments will hit a lot of trouble with paying those increased costs. Investors are clearly seeking higher yields on their risks and it is ironically increasing risk exponentially. A guest on CNBC last night (AEST) said it is inevitable that Greece, Ireland and Portugal are heading for default, now Spain and Italy are signaling crisis straight ahead.

Here is the guest on CNBC whom I referred to in my post above. Interesting snippet from the interview posted, the headline says it all...

Credit Maven Sean Egan: All of Europe is like one big Lehman

riots in italy and france for democracy is what we will see very soon. they will occur almost at the same time. the situation is becoming sticky, and everyone knows this can't last much longer