Here’s an interesting chart from RBS which shows something we haven’t seen much attention to. It’s French CDS spreads (vs. German Bunds), and not surprisingly they’re soaring.
As RBS puts it, there’s NO WAY France goes bust, but Germany remains intact. While you can imagine Greece or Portugal breaking away, France is simply too central to the EMU to even imagine it having a different fate than Germany. Granted the markets can remain crazy for longer than you can remain solvent, as the old saying goes, but this is absurd.