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The Market is Now Pricing In the Genuine Possibility that the US will Default on Its Debt
Posted By admin On September 21, 2008 @ 4:43 am In Featured Stories | Comments Disabled
George Washington’s Blog 
Sunday, Sept 21, 2008
You’ve heard of “credit default swaps”. They are a type of derivative where one person places a bet that a certain company will go out of business, and another person on the other side of the contract places a bet that the company won’t go out of business (see this  and this ).
Well, people are now starting to increase their use of credit default swaps to bet that the U.S. will default on its ability to pay on its treasury debt.
“Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.
That possibility is still deemed to be quite low. But the ultimate financial question – until recently, unthinkable – is now being asked. Yes siree, the mighty US government could default. That’s how much the world has changed.”
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URLs in this post:
 George Washington’s Blog : http://georgewashington2.blogspot.com/2008/09/market-is-now-pricing-in-genuine.html
 this: http://www.marketoracle.co.uk/Article6335.html
 this: http://www.webofdebt.com/articles/its_the_derivatives.php
 article: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/21/ccliam121.xml
 here: http://www.telegraph.co.uk/money/graphics/2008/09/21/ixliam121.jpg
 The Fed “Owns Credit-Default Swaps … On Debt Owed by California and Nevada. So the Fed Would Profit If One of Those States Defaulted on its Debt.”: http://www.prisonplanet.com/the-fed-%e2%80%9cowns-credit-default-swaps-on-debt-owed-by-california-and-nevada-so-the-fed-would-profit-if-one-of-those-states-defaulted-on-its-debt-%e2%80%9d.html
 U.S. may default on its debt half a month earlier than expected, new analysis shows: http://www.prisonplanet.com/u-s-may-default-on-its-debt-half-a-month-earlier-than-expected-new-analysis-shows.html
 CDO-Related Credit Default Swap Crisis on the Horizon?: http://www.prisonplanet.com/cdo-related-credit-default-swap-crisis-on-the-horizon.html
 Be Honest – The European Debt Deal Was Really A Greek Debt Default: http://www.prisonplanet.com/be-honest-%e2%80%93-the-european-debt-deal-was-really-a-greek-debt-default.html
 U.S., Cuomo Open Credit Default Swap Investigation: http://www.prisonplanet.com/us-cuomo-open-credit-default-swap-investigation.html
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