Ireland debt trouble

As I have posted before, Ireland was in trouble, and over the last week or so the trouble has turned into panic.  Yeap, peaking at just shy of 800 basis points (or 8%) higher interest rates vs the Germans, Ireland has all but followed Greece and Iceland into bankruptcy and the kicker is, they have enough money on hand to get by until next summer.  Yeap, totally solvent, however the market no longer sees it that way, and hence the destruction of their ability to borrow from the markets. Below is my projections of what the graph I normally use would look like with the latest data. 

Everything after the blue line is a projection based on information from Bloomberg for Greece, Ireland, Portugal, and Spain. I have roughly subtracted out the German bond price (this is really just to show that Ireland's interest rate has soared as of this month.

What is interesting is the panic that has started, and somewhat from the markets, but more so from the government.  The EU and the IMF have jumped into action, seemingly trying to force Ireland to accept bailout funds now so as to quell the market, meanwhile Ireland up till today was not even acknowledging that it needed or was receptive to getting assistance. 

But... Ireland is not the problem.  Nor is Portugal.  It is Spain and Italy.  Look at this graph from Calculated Risk blog at to the size of the sovereign debts.

Note where Ireland and Portugal fall (nearly all the way to the right) vs Spain and Italy (on the left hand side).  Italy would be a total disaster, likely in the middle of a total disaster.

Oh well, I will keep you updated on this growing crisis, but look for Portugal to slip into disaster in another 3-6 months also.