The Atlantic: Euro in Crisis: Is the Italian Domino Falling?
If Italy goes, it's not clear that the rest of Europe can save them. In the FT, Neil Dennis says people are talking about doubling the euro bailout fund to €1.5 trillion--or about three times the size of TARP. And you may have noticed that the bailout fund has not actually stopped Greece's descent into debt madness.
Default looks more likely in the case of Greece. If a default there leads to large quantities of paper assets vanishing as they're written off, it becomes more likely that Italy and other European countries will follow suit. What might that look like?