Unpleasantly interesting: http://www.portfolio.com/views/blogs/market-movers/2008/03/12/us-default-risk-soaring In the same vein: http://www.riskcenter.com/story.php?id=16166 lj
Nah, they won't default. How can they default? They can print money infinitelly? They don't even need paper or presses, as most money is electronically printed. They may even put their computers on scientific notation if needed.
No need to worry about that....if the Treasury CDS go swing then everyone is BK. It may happen....but it'll take 15 years. Advice: everyone should move their assets offshore 7 years ago.
While I would agree that the likelihood of Treasuries defaulting is rather small, the simple fact there was a 10-fold change in the CDS risk parameter indicates that the individuals who structured this vehicle (and as well those who have it in play) perceive that the Benster's recent offer to allow "high grade mortgage debt" to be used as collateral for the purchase of government bonds, are less than impressed. I would agree with their sentiment. Furthermore some are saying that today's action with Carlyle is a direct consequence of BB's magnanimity. The beauty of this whole mess is that until such time as the parties involved in the subprime mess are forced to come to terms with their bad choices, efforts like the Fed has just made (and those of the recent past -from rate cuts to the TAF http://www.federalreserve.gov/monetarypolicy/taf.htm) will come to naught. It is definitely akin to rearranging the deck chairs on the Titanic after its collision with the iceberg. lj