Default Risk for Greece and the Rest of the World

New concerns over Greece have caused sovereign debt default risk for the country to spike to its highest level of the crisis.  But while the last spike in January caused global equity markets to pull back, this time investors (especially in the US) don't seem too worried about it.  To quote the phrase that former President George Bush struggled so much with, "Fool me once, shame on you.  Fool me twice, shame on me."

Below are the current credit default swap prices for a large number of countries around the world.  The list is sorted by change since most global equity markets bottomed on February 5th.  As shown, only Chile, Greece, Vietnam, and Egypt have seen default risk rise since then.  Default risk for the US has dropped about 25% during the current market rally, which is strong relative to most other countries.  As we've been noting in recent weeks, the US is beginning to outperform the rest of the world, which is something that hasn't happened during a global bull market in quite awhile.

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Comments

[Norman]

Country credit default swaps, redux. So, lets say that Greece does default and the holders of the CDSs want their payments. Where is that nice pile of money waiting to be tapped? What you say? There is no pile? Why me-oh-me, sounds like 2007-09 all over again. Duh.

[asdasd]

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