Yes, this is a bit opaque... 

You probably know what a CDS spread is. So buying default protection on sovereign bonds has become pretty expensive given historical levels and current yields.

Is your critique that those spreads don't reflect true default risk and are driven by fear (hedging) or that markets are illiquid or what not? 

Not everyone is up the eyeballs in finance as to connect the dots from "obvious" numbers and rates.
But...
Do you regularly read the posts from your own blogroll?
Like http://plastonic.blogspot.com/2009/03/we-are-so-fed.html
I mean, does the G20 CDS rates actually make ANY sense?
(I am not "criticizing", just asking :-) ) 

people differentiate between beta (market risk) and alpha (skill of a manager). I have always taken the view that most mangers have market risk on their books (stock price, oil price, interest rates, ...) and actually provide very little alpha. This is the Efficient Market Hypothesis view.

My job has always been (formerly Hedge Fund analyst, now an alround quant) to figure out how portfolios will perform in different market environments. So I'm more of a risk manager than a trader with directional views. I don't aks myself whether CDS spreads on Argentinian bonds are too high or too low, I try to get an understanding of the risks of holding those and similar bonds.

I like people who have strong views and can support this with facts. (I'm not talking about the Goldman guy who predicted $200 for crude oil or, more recently, Merrill's Rosenberg who says that it would not surprise him to see the S&P "gravitate in a 475-650 range for an extended period of time"). And I hope I do a good job at filtering their information.