So it does not matter that Portuguese and Greek bonds are now junk, Trichet has waived the ECB rules and made these bonds eligible as collateral to give these two bankrupts yet more Euros. The Italian finance minister is now in political trouble. A pity as he was trusted by the markets.
The effect of these shenanigans immediately impacted on these countries 10 year bond rates which have all hit all time record highs along with Spain. I give the bund spread below in brackets.
Greece 17.04% (14.20)
All the little PIIGS are comong home to roost.