Portuguese CDS Surge, Hit 235 bps, Just 7 Away From Record
PIIGS investors are following closely the rapidly deteriorating developments in Greece: the latest indication that the EU's botched bluff attempt with Greece is likely to have adverse implications on not just the Mediterranean country but on all other highly leveraged countries are the CDS spreads of Portugal. After blowing out to all time wides in early February, about the same time we first heard that Greece was in essence insolvent, the country's credit risk has been once again slowly creeping higher and today hit a level of 235bps: for all intents and purposes a record. As the risk posture reasserts itself in Europe, America has not looked back even once since the market lows of 2010, which were caused by just these European fallout considerations. Is Europe slowly coming to the same conclusion that Dylan Grice did today? What will take for the US to emerge from its bubble trance of a utopia in which any and every problem can be solved with just more money printing, and a steeper yield curve. For now, the answer is nothing, as consumers get their second wind on mortgage payment and credit card bill defections.