Can anyone analyze the implied probabilities for different scenarios based on credit derivative prices? This is down to national politics now -- if the Germans can't stomach a Greek bailout, what's going to happen with the other PIIGS (Portugal, Ireland, Italy, Greece, Spain)? Default insurance on some of those countries must be going through the roof.
Here are eurozone credit spreads over time (WSJ). Looks like Ireland is next, then Italy and Spain. What is Soros up to? :-)
