The Most Shocking Thing I Learned In Italy Is In This Image From The Nightly TV News

Rome, Italy — It's my last night here in Italy, so I went out for one last meal, and while I was at the restaurant I glanced up at the TV to see a replay of an earlier interview with Beppe Grillo, the big winner in last night's election (he didn't win outright, but the populist, anti-elite comedian far exceeded anyone else's expectations).

But the real lesson is in the caption.

On the nightly news ticker, it's a common sight to see what Italians calls "Lo Spread" or the difference between Italian borrowing costs and German borrowing costs. BTPs are Italian bonds, and Bunds are German bonds.

After last night's election, "Lo Spread" is up to 344 basis points.

In the same way that Americans might be familiar with there the Dow is at at a given time, Italians watch this number.

I learned about the significance of this number within a few minutes of landing in Milan last week, when I met a group of bankers, who referred constantly to it.

Italy has a staggering debt load, and it pays right now about 4.5% of its GDP every year to interest payments on the debt. Reducing its borrowing costs, potentially, could free up a lot of cash domestically.

Furthermore, since the wide spread is seen as a reflection of Italy's semi-functional government, the daily changes in the spread are a constant referendum on government. As Mario Monti engaged in reforms throughout 2012, and the spread came down. people saw this as a sign of competence, and Italy getting its act together.

The surging spread today is seen as a reflection of the clown show that just took place.

Ultimately it's a very weird thing for there to be a national obsession about relative borrowing costs relative to Germany, but there is a logic to it.

And it makes sense that the man getting all the camera time right now -- Grillo -- is the one who is most opposed to this current obsession with spreads and maintaining international credibility.