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Greece is a 'Sideshow' Compared to Spain

Tuesday, 4 May 2010 | 11:34 AM ET

It didn't take long for investors to think twice about lending to Greece, even with a huge bailoutin place that will enable the country to meet its obligations for the next couple of years.

The problem, say sovereign debt investors, is that you don't ultimately solve a massive debt crisis by adding more debt.

Faber Report
Another perspective on the sovereign debt market in Europe, with CNBC's David Faber.

And today that sentiment has crept back into the marketplacein the form of huge moves up in the yield of Greek paper and a growing concern about other EU member states and their ability to grow out of large budget deficits.

Greece is a side show when one considers what would happen should investors truly decide not to buy Spain's obligations. It is simply "too big to bail".

One day, so the thinking goes, the actual restructuring must occur. Right now, that day looks like it's closer than many think.

Here are the latest updated 5 yr CDS quotes:

Portugal 340/370 vs yesterday close of 275 bps

Italy 152/160 vs yesterday close of 134 bps

Ireland 205/220 vs yesterday close of 177 bps

Greece 700/750 vs yesterday close of 643 bps

Spain 195/210 vs yesterday close of 157 bps

UK 81/84 vs yesterday close of 77 bps

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Questions? Comments? Write to faberreport@cnbc.com.