The ECB and EU want everyone to believe there will not be haircuts on sovereign government debt. The market refuses to believe that and so do I.
If there was no risk of default, then government bond yields would all be the same. Instead, please follow this progression of current yields on 10-year government debt.
click on any chart to see a sharper image
In spite of all the yapping by ECB president Jean-Claude Trichet and others, the European sovereign debt crisis remains near its most stressed levels, and the above set of charts proves it.
Mike “Mish” Shedlock