Financials slump as Citi and JP Morgan miss estimates

Shares in the third biggest US investment bank slumped 5.80% today after it announced that its revenues fell 7% Q/Q to $17.2 billion, and $0.38 earnings-per-share on expectations of $18.5 billion, and $0.52 EPS. This comes after the disappointing Q4 results of JP Morgan, which followed the same pattern: a loss in the debt valuation adjustment (DVA), lower investment bank fees, loss on the trading division all covered by an offsetting release from loan loss reserves.

Who is still holding toxic Italian debt ?

The Italian yields have cooled-off a bit, revolving around the 6.50%-7.00% area, partially due to the ECB rather frequent interventions and on the news that Mario Monti, a former European Commisioner, will lead the Italian government.  Spanish yields on the 10y benchmark are still high up there at 6.31% after recent weak macroeconomic news and French 10 year bonds rose today to 3.72%. The most solid European country, Germany, which reported today a 0.5% quarterly increase in GDP and its 10 year yields stand at 1.81%. Who is taking this loss ?