"The U.S., at least, won't actually default, says Ortel, but as our situation worsens, the value of credit default swaps (insurance against default) should rise. So Ortel continues to recommend CDSs to his clients.
5-year credit default swaps on U.S. soverign debt currently trade for about 25 basis points (which means it costs $25K per $10M of notional value). How does that compare to other countries or states?
* Japan = 72 bps
* United Kingdom = 56 bps
* Germany = 21 bps
* California = 177 bps
* New York = 85 bps"
Monday, November 16, 2009
Investing in US CDS: $2.5K buys $1 Million
America Is An Over Indebted Profligate Spoiled Nation In Decline: Tech Ticker, Yahoo! Finance:
Posted by Mother of All Carry Trades at 11:22 PM