Maybe Italy, not Greece, is the word

A stock exchange monitor in Milan on Nov. 9, 2011. (Antonio Calanni / AP)

As appropriate as it is to focus on the tea leaves of the U.S. economy, Wednesday's stock market sell-off makes it plain that uncertainty over Europe's debt crisis trumps all.

I've heard experts claim that a European recession won't matter to the U.S. economy, while others say it will drag the U.S. down as well.

I've heard some say a default by Greece would be like the failure of MF Global, not Lehman Bros. -- in other words, not a systemic risk. But what about Italy? Wouldn't that be Lehman-like?

IHS Global Insight on Wednesday said that Italy "can absorb expensive debt auctions for several quarters." The economic forecasting firm's point is that Italy remains solvent, unlike Greece. In IHS' view, Italy has more time to work out its debt overhang than Wednesday's panic in the bond market would suggest.

Still, Europe's troubles are forcing U.S. companies to admit that they have a problem. General Motors says it won't break even in Europe in 2011. In October, Philadelphia's Checkpoint Systems warned about the weakness it was experiencing from European customers.

And the European drug makers such as GlaxoSmithKline, AstraZeneca and Shire that populate the Philadelphia region can't be cheered at the potential for further austerity trimming their European sales.