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Time to Buy Italian Bonds?

Thursday, 10 Nov 2011 | 1:24 PM ET

The market roller coaster continued Thursday as investors eyed news from the euro zone on its debt crisis, including headlines on Italian bond yields and a fairly positive bond auction. And that’s presented an opportunity in Italian short-dated debt, BlackRock Investment Management Institute’s Ewen Cameron Watt told the "Fast Money" team.

“A one year Italian bond yielding, say, seven percent, feels to me like a pretty interesting bet,” he said.

Why is Watt willing to take such a bet?

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“I don’t think the Republic of Italy is going to default on its debt in the next year to two years,” he said. “They have plenty of cash to get through the next several months.”

But trader Steve Cortes called it an “incredibly dangerous trade.”

“This yield is not attractive yet, even at these levels,” he added.

While the European Central Bank aggressively bought Italian bonds with short maturities Thursday, according to Reuters, Watt doesn’t see the central bank massively intervening for some time.

“It will take a deeper crisis even than we’re seeing now” for that intervention, he said. “In the end we will see [it], but we’re a ways away from that in time yet.”


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Trader disclosure: On November 10, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Scaramucci is long AAPL; Scaramucci is long BAC; Scaramucci is long IBM; Cortes is long Treasuries; Cortes is long SO; Cortes is long K; Cortes is long DNKN; Cortes is short AAPL; Cortes is short DB; Cortes is short STD; Cortes is short BAC; Cortes is short GOLD; Edwards is long XLK; Grasso owns AA; Grasso owns AKS; Grasso owns ASTM; Grasso owns BA; Grasso owns BAC; Grasso owns D; Grasso owns KEG; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Grasso is invested in a retail space hedge fund

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