It’s nice to see the USA making a few top ten lists these days although this isn’t exactly a list you want to be on. The following chart shows the credit spreads and the cumulative probability of default for various countries and US states. The probability of Greek default has surged in recent weeks as pressures in Europe have reemerged. An equally interesting development is the ascent in Illinois and California spreads. Are these two vital US states truly at risk of default within a supposedly UNITED States of America? The key differentiating factor between the USA and Europe is the lack of true unity in Europe so it’s interesting to consistently see these US spreads widen when the sovereign debt fears in Europe flare up. It’s also interesting to note the persistent rise in Greek funding costs. Despite an ECB that claims to have everything under control the market simply continues to press the issue. I still maintain that the market will press the issue until a true resolution is discovered. What that is? Who knows. The options appear to be depression or true unity. Unfortunately, thousands of years of history make the latter look unlikely….