Even though Spanish bond yields are 75 bp below their highs of late November, credit default spreads are at their widest in history.

Why?

I’m no expert on CDS but my guess is that the attempts by the Troika to restructure Greek debt without triggering the CDS made investors shy away from paying for protection that could have been useless based on the whims of the governments and central banks.

Once the Troika ultimately buckled and let the Greek CDS be triggered, the market for CDS was revived and allowed to function as designed.

That’s my semi-educated guess, anyway.

Meanwhile, cash 10-year Spanish debt has brushed the 6.0% level late in European trading.