Sunday, Sep 21, 2008
People are now starting to increase their use of credit default swaps to bet that the U.S. will default on its ability to pay on its treasury debt.
George Washington's Blog: The Market is Now Pricing In the Genuine Possibility that the US Will Default on its Debt
An article in the Telegraph from today includes a here showing credit default swaps on US 10 year treasury debt, and explains:
"Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.
That possibility is still deemed to be quite low. But the ultimate financial question - until recently, unthinkable - is now being asked. Yes siree, the mighty US government could default. That's how much the world has changed."
Posted by planning4acrash @ 10:54 AM (429 views) Add Comment
1 Comment
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1. jonb said...
The only problem is finding an insurance company that is less likely to go bust than them.
Also, it doesn't cover the government printing their way out of debt, which is the most likely scenario.