Monday, June 28, 2010

California is next Greece ?

The cost of protecting the debt against default in the below  table shows few states US are facing a difficult times than the present Euro zone. May be its time for  Arnold Schwarzenegger to make Terminator 5 a Hit and use that money to pay of the debt in US states.

Wiki Definition:
A credit default swap (CDS) is a swap contract in which the protection buyer of the CDS makes a series of payments to the protection seller and, in exchange, receives a payoff if a credit instrument (typically a bond or loan) goes into default.
Example of CDS:
For example, if the CDS spread of Risky Corp is 50 basis points, or 0.5% (1 basis point = 0.01%), then an investor buying $10 million worth of protection from AAA-Bank must pay the bank $50,000 per year

Here is the latest Data from CMA Datavision which tracks
The CMA Sovereign Risk Monitor identifies and ranks the world’s most volatile sovereign debt issuers according to percentage changes in their 5 year CDS.

Monday, 28 June 2010 — 12:30

Highest Default Probabilities

Entity Name

Mid Spread

CPD (%)
Greece 1085.57 67.28
Venezuela 1276.00 57.73
Argentina 964.80 48.00
Pakistan 713.20 38.76
Ukraine 624.70 35.76
Iraq 479.70 29.19
Dubai/Emirate of 480.70 28.78
Illinois/State of 356.70 27.09
California/State of 345.50 26.90
Romania 399.36 25.04

CPD stands for Cumulative Probability of Default

CDS can be checked at this location:

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