Euro-crisis appears to be nearing a climax.

 

 Borrowing costs in Italy and France continue to rise, as does the cost of bond-default insurance.  Banks are beginning to scramble for alternate sources of funding as traditional ones dry up. And a bond auction in Spain went badly this morning. One indication of the increasing stress, both in Europe and in the U.S., is the cost of overnight loans banks make to each other. These are captured by LIBOR (London Interbank Offered Rate) in Europe and the "TED Spread." Neither is anywhere near the levels hit during the US financial crisis. But they've been rising steadily since mid-summer.