Yesterday, The Wall Street Journal had an article titled "Turmoil Spreads in Europe." The subtitle is "Bond Market Selloff Hits Nations Seen as Healthy, Raising Specter of Contagion."
Europe's debt troubles on Tuesday spilled over to top-rated nations that had been largely untouched by the crisis—including Austria, the Netherlands, Finland and France—in an ominous sign for European policy makers.
I continue to believe that "contagion" already exists.
Also, the broader implication of the European situation - and one that is entirely lacking recognition - is whether the overall concept of sovereign debt is (in the process of) being repudiated. If so - and it appears too early to definitively answer - the implications are massive.
Here is what I wrote about both of these issues in a January 10 article titled "10 'Front and Center' Problem Areas That Pose a Threat to the Economy" :
European debt crisis: This situation appears to be unresolved in many respects. In fact, it almost appears to be a slow-spreading contagion. One interpretation of this overall situation is that it may signal a repudiation of (sovereign) debt. Should this interpretation prove accurate, it would not bode well for our highly-indebted global economy.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1230.63 as this post is written