When a pipe leaks, the water does not stay where the leak is. It takes the easiest path and reaches the pipes next to it. In September we saw the first joint give way. In October rates fell, and at first sight the pressure eased. It did not. It only changed direction. The stress that began with the weakest US borrowers climbed the rating ladder and crossed the ocean, while the amount of money in the system barely changed. What changed was the willingness to lend it.
How far the leak travelled, which European country led it instead of the usual suspect, and which region is less calm than it looks: the full analysis is for subscribers.
