by Calculated Risk on 7/21/2011 10:23:00 PM

Earlier today:
• Philly Fed Survey: "Regional manufacturing remained weak in July"

This is a day to remember - Greece will now default - so this is probably worth one more post (I haven't seen a rating agency downgrade them yet). For details: STATEMENT BY THE HEADS OF STATE OR GOVERNMENT OF THE EURO AREA
AND EU INSTITUTIONS.

Note: The history of the European bailouts is deny first, then act later. So naturally the following denial of additional defaults just raises the question of "when" for many observers:

"As far as our general approach to private sector involvement in the euro area is concerned, we would like to make it clear that Greece requires an exceptional and unique solution.
...
All other euro countries solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms."

And here is a look at European bond spreads from the Atlanta Fed weekly Financial Highlights released today (graph as of July 20th). The spreads have declined sharply since the Euro Zone announcement.

From the Atlanta Fed:

In recent days, Italy has become the next euro-area member to come under financial market pressure. Along with Greece, Portugal, Spain, and Ireland, Italian bond spreads (over German bonds) have continued to widen.

• Early last week, amid political uncertainty over intra-euro zone negotiations, Italian bond spreads spiked higher. Since the June FOMC meeting, the 10-year Italian-to-German bond spread has widened by nearly 108 bps through July 19. The spreads for Ireland and Portugal have soared higher by 276 bps and 262 bps, respectively, over the same period.

• Greek bond spreads remain extremely elevated, 140 bps higher since the June FOMC meeting, at 16.3 percent over German bonds. Spain’s spread also rose 80 bps

Note: I added arrows pointing to the various bailouts starting with the first bailout for Greece, followed by Ireland, Portugal and then Greece again.