The Greek flag and the U.S. Capitol Building.
The Greek flag and the U.S. Capitol Building. - 
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Today, as we read up on Greece's growing debt crisis, we noticed this sentence in the Wall Street Journal:

Greek 2-year bonds remain in free fall and yields rose above 65 percent compared with just a 0.4 percent yield on German 2-year bonds.

That's right, an interest rate of more than 65 percent for anyone who is willing to take the risk of lending Greece money, in this case on a two-year bond. In other words, it's a bond that nobody would ever want.

We spoke with Scott Mather, a managing director at PIMCO. He told us that this means Greek debt is trading as if default is imminent; that insanely high yields mean the market believes there's almost no chance that the debt will be repayed.

With that in mind, we asked Mather if he thinks Greek default is imminent. His answer. "Yes."

Mather said it could be days, weeks or even months away, but he said it would happen. He noted that Greece has, so far, not been able to hit any of the economic and financial targets set by the IMF and EU. And this past weekend, the country's finance minister announced that Greece's economy would shrink by more than originally forecast, making it even harder for the government to pay back the money it already owes.

Plus there's increased resistance from some other EU nations (most notably Germany) when it comes to giving Greece any more money.

Now how does this affect the U.S.? Not directly, as Greece is a very modest U.S. trading partner. The risk of contagion is mostly through the interconnectedness of financial institutions. European banks - especially those in France - hold much of Greece's debt (as well as debt in the other troubled EU nations: Ireland, Portugal, Spain and Italy).

U.S. banks don't hold much of that debt, but they are part of the global banking system and it's that systemic risk that would bring European debt contagion across the Atlantic and into the U.S. economy.

Today European bank stocks were part of a big selloff in European markets. U.S. markets followed suit, though the drops were not as dramatic as those on the Continent.

Also on the show, the hot, dry summer is to blame for what's likely to be the worst corn harvest since 2005, according to a new USDA report. Bad harvest means low supply, which could mean rising food prices next year. The potential negative impact on America's blood sugar is lowering Marketplace's Daily Pulse today.

Follow David Brancaccio at @DavidBrancaccio