Europe's sovereign debt crisis isn't over, it just took the summer off

As soon as the vactioners start leaving Greece, the problems will come back to the forefront because tourism accounts for over 73% of GDP.

Basically, the bond markets are telling us that the solvency issue for the periphery is no better now than it was before the European Financial Stability Facility and bank stress tests were unveiled. However, even with recent weakness, the Euro is trading above the 1.19 low that was hit during the panic this spring. This disconnect can't continue.

Read "Eurozone Downgrades to Continue" right here

In a related story Arnaud Mares, an executive director at Morgan Stanley in London, wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take. The sovereign-debt crisis is global and it is not over.”

Read the story in Bloomberg here