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Wednesday, February 18, 2009
USA CDS Hits All Time Wide Of 90 Bps
The cost to insure against a U.S. default hit an all time high of 90 bps today ($90k on $10 million in insurance). Again, who pays if it defaults?
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7 comments:
wait arent US govt CDS denominated in EUR so that would be €90k($112,968)?
your point still stands just wonder for my own knowledge.
technically you can ask your broker to denominate it in any currency you want. but rule of thumb - if you buy us cds in the us, you are working in $ us. in europe situation is fluid
Great fact. Whose rating is this?
not rating. freely traded insurance in the market
So what is the accepted collateral for bets on treasury bonds? Gold coins?
It sounds like free money to me. If the U.S. does default, what are they going to do, sue me? They'd have to know the secret location of the Bat Cave.
True that this is freely traded, but not liquid at all. I'm sure you could put this trade on at 90bps, but when you want to unwind, be prepared to bend over and grab your ankles.
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