Two on Europe...

A run on Greek banks - people are pulling out Euros.
and
Spanish bond yields continue to climb.

An interview with a CDS bond trader

Well worth watching.

Interestingly, it turns out that the CDS contracts on Greek debt may not pay out because they didn't specifically define a principal reduction as a credit event.   This is the inherent problem with CDS contracts - they have to explicitly define what constitutes a credit event before the event occurs.

The Greek crisis explained using rubber ducks.

Felix Salmon uses rubber ducks, a paddling pool and a pirate ship to explain the problems in Greece.

The Greek default

My colleague, Steve Allen has an excellent discussion of the impending Greek default.  Bottom line.  It isn't going to be pretty.  Everyone will get hurt.  Why - well it turns out that everyone is involved in some way.  JP Morgan tried to explain it with Lego figures. Click here for an explanation.

Why Greece needs another 110 billion Euros.

A good explanation of why Greece needs more money just to pay maturing debts.  But the money won't be cheap as Greece's borrowing costs are already sky high - the yield on 10 year bonds is about 17%.

Default is being discussed, but for euro-zone banks that are holding Greek debt, that would be a disaster - further amplified by holders of Credit Default Swaps who would promptly demand payment on their contracts.

The bottom line is that Greece is probably too big to fail.  But it may be politically impossible for Euro zone politicians to convince their electorate that a bailout is the better of two very bad options.

How big is US exposure to the Euro crisis?

Maybe $54bn, but it is unlikely to get that bad. According to CNBC.

More on Greece

The welfare state's death spiral by Robert Samuelson. Should you bail out a country that basically spends too much and piles on too much debt? Samuelson argues that many countries face similar problems...