US Sovereign Debt CDS Spikes

Bespoke Investment Group

Team

February 5, 2010

We all heard about credit default swaps "blowing out" for the southern European countries today, but default risk also spiked for US sovereign debt.  Why US CDS even exists is a whole different story, but as shown below in the Bloomberg screenshot, it spiked significantly above its June high today.  Default risk is still well below the highs reached during the crisis, but we don't want to get anywhere near those levels again.

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