Bloomberg issued an interesting chart below showing what would be the impact of a country default on the CDS.
What the market is most confused by is that Spain, which everyone thought would be the next to fall after Portugal has been skipped (sort of) by the bond vigilantes who decided to go straight to the gateway to Europe's core. Italy.
Italy is on the grill and the pain is only just beginning: as the chart below shows, there are dozens of Treasury issuances about to be unleashed by the Italian Treasury.
The biggest surge though in recent months in net notional has not been Italy, nor Spain, nor any of the other PIIGS, but.. France, the domino effect has started already and it could be already too late to contain the infection.
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