Angela Merkel is apparently stepping up measures to prepare for “orderly insolvencies” so as to avoid a repeat of the situation in Greece. I.e., there are no more bailouts. The Euro currency continues to crash and burn overnight and the CDS in all the remaining PIIGS are blowing out. The situation is beginning to take a turn for the worse again. Is the Euro slowly unravelling?
The market has tested the resolve of the EMU and discovered that they were forced to use all their bullets on likes of Greece. The move towards Spain can now begin in earnest as the sharks begin to circle the other weakened countries in Europe. CDS in all the remaining countries are blowing out with Spain exploding 29 bps. The Germans now have a real problem on their hands. Do they give the Greeks their massive bailout when they can plainly see that the risk of contagion has not only NOT been contained, but has perhaps worsened?