U.S. Sovereign CDS Rockets to 82 bp

Discussion in 'Economics' started by ASusilovic, Feb 7, 2009.

  1. Scary bit is that these CDS underestimate the probability of default of the U.S. because they are effectively a spread between the economic situation getting bad enough that the US defaults but are not so terrible that the seller of the CDS also defaults. Moreover, these CDS don't measure the potential for a soft default on US debt (aka hyperinflation).