From a SocGen Analyst’s note released today:
The extraordinary events we’ve seen these past months are now threatening the euro project, and calls for its dismissal, which were laughable a year ago, are becoming more mainstream. Risk aversion has increased dramatically and we are arguably in as bad a shape as in 2008/2009. Peripheral bond yields are now much higher than they were back then, as are all sovereign CDS. The low yields of the safe haven bonds (Bunds and US Treasuries) also highlight the sharp risk aversion in the markets and while the tensions in the money markets are not as bad as they were back then, they remain at extreme levels.
Kyle Bass on CNBC today essentially said the following:
“Europe is trying to fix a solvency crisis with liquidity. Liquidity is not the problem. No one is saying the payments system will fail; it did not fail in the US when Lehman went under, either. However, bills are coming due in Europe that no one can pay.”
