Sovereign Stop Payments

She's the dollars, she's my protection
Yeah she's the promise in the year of election
Oh sister, I can't let you go
Like a preacher stealing hearts at a traveling show
--U2

Peter Atwater suggests that perhaps Ireland et al will decide it is in their best interests to default rather than get bailed out. Indeed, "countries don't have friends, they have interests."

Should a string of sovereign defaults ensue, this will surely add additional stress cracks to the already weakened EU infrastructure. Moveover, hard to see how voluntary defaults do not send country borrowing costs higher worldwide.

Meanwhile, pressure has not come off the system even after the EU bailout announcement. And, based on its spreads blowing out this am, Spain has jumped ahead of Portugal as next in line.

position in Treasuries, XLF