State Default Risk
Monday, August 30, 2010 at 03:58PM Below is a chart highlighting default risk for sixteen states that we have credit default swap (CDS) pricing for. The number next to each state represents the cost per year to insure $10,000 worth of state bonds for 5 years. The higher the price, the higher the default risk. As shown, Illinois has the highest default risk of all states at 303.2 bps -- even higher than California. California ranks 2nd, followed by Michigan, New York, and New Jersey. Not to anyone's surprise, these are basically the five states in the country with the biggest fiscal problems at the moment. States that appear to be in pretty good shape include Texas, Virginia, Maryland, and Delaware.
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Reader Comments (14)
Top states-----ALL BLUE states.
Hhhmmm...
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Where is Rhode Island. I would have thought it would be in the top ten.
Who's got the most wins. Obamaland is the clear-cut winner.
I've lived in both IL and Va for about 4 years each. I have to say the quality of life in IL was better...everything (such as utilities, recycling, transport, shopping) was more reliable, stable, and solicitous, in my opinion. There is much more of a sense of community in IL, where you DO continually care about and accept your neighbor! Also, people care more about their reputations in the suburban community and there is a lot of integrity, as a rule, not an exception. In VA, they may save money, but they take it out of your hide, bill you incorrectly, cite you for nonsense violations to collect revenue, and basically treat you like a money source, nothing more. However, I do think IL has a lot of "softies" in terms of giving out govt. services and funds. They have good intentions, but they need to reign it in by the numbers!! Now they seem to be in denial. Their hero, Lincoln, would not be proud! To carry that kind of debt is not honest...C'mon, IL!
Let us continue to appluad corruption!
@Weight Loss - the risk for RI is so high they probably won't sell any CDS on their credit! If they did, the price would be astronomical.
It's always the samo, samo.... The socialists "crash" and the Capitalists are "bashed " for the damage to the econ.!!!!
If Rhode Island was smart, they annex to Mass or CT; oops, from the frying pan into the fire.
If I am reading this correctly "The number next to each state represents the cost per year to insure $10,000 worth of state bonds" it states that it cost 3.03% per year to insure IL state bonds? Can this be correct? Is IL paying over 3%/yr on 5 year paper?
"Top states-----ALL BLUE states.
Hhhmmm..." Are you kidding me? really? The "top states" are the ones in trouble.... yep....all blue
Dan, I think that's what Jack Reacher was trying to say. That the states at the top of the list in the most trouble were all blue states.
This looks like a case of put your money where the votes are, why does the little homely do nothing states manage their money so much more effectivley? Blue or red the lobbyist get the nod the citizens get the bill.
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