The divide between political rhetoric and economic reality in Europe is growing. Former IMF chief economist Simon Johnson along with Peter Boone have the summary:

As usual, Nouriel Roubini tells us how deep Europe could side in all different dimensions. (Remember, Roubini earned only hearty laughs when he predicted the 2008 financial crisis in 12 easy steps too scary for anyone to take seriously – then it all came true, just worse than even he had predicted…

Here is the update on Euro Bond Spreads. Looks like markets are getting quite confident about default – then why is the Euro so strong? – Because US interest rates are zero… Try Interest Parity…