Sovereign Debt Default Risk
Tuesday, May 4, 2010 at 01:22PM Talk of sovereign debt credit default swap prices "blowing out" for various European countries is rampant today. While CDS prices are higher today for countries like Greece, Portugal, Spain, and Italy, they were just as high late last week prior to declining quite a bit yesterday on news of the Greek bailout. Basically default risk today is right back where it was late last week and not "blowing out" to higher levels.
Below we highlight CDS prices for a number of countries around the world. As shown, Greece 5-year CDS is at 737 basis points today. Prior to the bailout it was above 800 bps. Venezuela and Argentina still have higher default risk than Greece. Portugal CDS is at 355.4 bps today, up from 275 bps yesterday, but still below the 380 bps it was at last week. Spain is probably the most worrisome country on the list at 208 bps, since it has a much bigger economy than any of the other countries at similar default risk levels. And Italy has jumped up to 164 bps today, which is more than double the next closest G-7 country.
As shown in the table, US and UK default risk is essentially flat in 2010, while Germany, France, Italy, and Spain are all up more than 50%. Euro-zone concerns abound.
Want more actionable advice from Bespoke? Subscribe to Bespoke Premium today.
Reader Comments (3)
Since the US can just print more money instead of defaulting on debt, who is the typical buyer of insurance when a CDS contract is initiatied? Why do they need this insurance?
US CDS are priced in Euros.
Therefore printing more and more dollars cannot prevent an ultimate default in Euros (let's imagine that 1EUR = 10 USD at some point), even if it is of course extremely hypothetical... (and I don't think it can happen with more than a probability of 0.01% !)
ed hardy
Christian Audigier caps
ed hardy men hoody
ed hardy women hoody
ed hardy bags
ed hardy swimsuit
ed hardy suit
ed hardy caps
ed hardy belt
ed hardy slipper
ed hardy sunglasses
ed hardy man underwear
ed hardy Womens Bottoms
ed hardy man denim
ed hardy man trunk
ed hardy man shoes
ed hardy women shoes
ed hardy stoup
ed hardy jewelry
ed hardy mobile face
ed hardy mug
ed hardy man tops
ed hardy man shirt
ed hardy women scarves
ed hardy women polo
ed hardy women pants
ed hardy women denim
ed hardy man pants
ed hardy man swimsuit
ed hardy man loungewear
ed women mid pants
ed women sport pants
ed hardy wallet
ed hardy mousepad
ed hardy mini skirt
ed hardy women short
ed Short sleeve mens shirts
ed Short sleeve Womens shirts
ed Long sleeve mens shirts
ed Long sleeve womens shirts
ed hardy men hoody
ed hardy women hoody
ed hardy bags
ed hardy suit
ed hardy swimsuit
ed hardy belt
ed hardy caps
ed hardy slipper
ed hardy sunglasses
ed hardy man underwear
ed hardy Womens Bottoms
ed hardy man denim
ed hardy man trunk
ed hardy man shoes
ed hardy women shoes
ed hardy stoup
ed hardy jewelry
ed hardy mobile face
ed hardy mug
ed hardy man tops
ed hardy man shirt
ed hardy women scarves
ed hardy women polo
ed hardy women pants
ed women sport pants
ed hardy wallet
ed hardy mousepad
ed hardy mini skirt
ed hardy women short
ed hardy women sport tank
ed Short sleeve men shirts
ed Short sleeve Women shirts
ed Long sleeve men shirts
ed Long sleeve women shirts
ed hardy men hoody
ed hardy bags
ed hardy swimsuit
ed hardy suit
ed hardy caps
ed hardy belt
ed hardy slipper
ed hardy sunglasses
ed hardy man underwear
ed hardy Womens Bottoms
ed hardy man denim
ed hardy man trunk
ed hardy men shoes
ed hardy women shoes
ed hardy stoup
ed hardy jewelry
ed hardy mobile face
ed hardy mug
ed hardy man tops
ed hardy man shirt
ed hardy women scarves
ed hardy women polo
ed hardy women pants
ed hardy man swimsuit
ed hardy man loungewear
ed women mid pants
ed hardy wallet
ed hardy mousepad
ed hardy mini skirt
ed hardy women short
Tiffany Necklaces
Tiffany charms
Tiffany Bracelets
Tiffany Pendants
Tiffany Earrings
Tiffany Rings
Tiffany Accessories
Tiffany Sets