29.2 basis points on a 10-year treasury CDS. This is either a fantastic opportunity, or the beginning of the end. Salt to your own taste.
US 10-year Treasury CDS widens to record 29.2 bps-CMA [Reuters via Alea]
— Advertisement —
Comments (81)
Leave a comment
You can log in with your account or comment as a guest below.
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
I would short that if it weren’t for the Obama factor.
@1 here. correction : LONG. I’d sell it.
sell protection here….because if the US ever suffers a credit event, the likelihood of your counterparty coughing up the required payment is virtually nil….
that’s not even 3bps, I wouldn’t run for hills just yet.
“Credit default swaps on 10-year Treasury debt expanded to 29.2 basis points — its widest ever — from 26.5 basis points on Tuesday, according to CMA, a specialised data provider.”
1,2 – Can you elaborate? How could either candidate do worse than the incumbent who basically doubled the federal debt in 8 years and is bequeathing his successor with a $440 billion + deficit and likely recession?
Salt? Forget it. Use Mayo as your spread!
What doest his mean from a layman’s perspective? I can sell an insurance policy on treasuries for 29.2 cents on the dollar?
7 100 bp = 1%, so the policy would cost .292 cents (around 1/3 of a cent) per $1, not 29.2 cents.
It’s sort of nonsensical to even quote a level for U.S. CDS, because if the U.S. defaults, the global financial system is pretty much done anyway. It’s like writing someone insurance on a massive meteor strike – who is going to be around to collect on the policy?
hey # 7 — it means
CDS aside, who is getting tired of Erin Burnett trying to burnish her credentials as a pundit on CNBC? Put her on Meet The Press once and she thinks she knows what she’s talking about. Stick to trying to read the teleprompter. Same goes for Old Man River Mark Haines. God, what passes for experience and insight today is sad.
10 check yr math: less than 1/3 cents, not
@12, 10 is saying the same thing. 1/3 cent per year, but 2.92 cents for the life of the contract
Correct me if I’m wrong, but @3…if you sold protection, wouldn’t you be the one required to cough up payment in the event the US suffers a credit event?
14 I think he’s saying that a default by the US would be so apocalyptic that you probably couldn’t (therefore wouldn’t)pay.
so who buys this stuff – I mean, really an insurance firm or whatever will be there to make good when the US Govt defaults on its debt? there is no end to the stupid bets people will make.
on another note entirely – anyone else really hate jim bunning, or was it just me thinking he was the biggest jerkoff on that committee yesterday?
@5, at this point it’s marginal increases in the debt I care about. 440B is sickening.
Bush and his neo-conservative ideas undoubtedly screwed us.
I don’t think we need any more government spending no matter how well intentioned it may seem.
And let’s drop these simplistic assertions that somehow the president and his policies has any significant effect on GDP. That’s like claiming that Clinton caused the 2001 recession. We saddled ourselves with a recession. It’s an inevitable part of the business cycle.
@16, I suppose you could use it as part of a relative value trade against less creditworthy countries.
really? Not a single spread ‘em joke in the whole thread? Im disappointed in everyone.
@16, Yeah, Bunning was a big douche yesterday! But he once pitched a no-hitter and also struck out 3 guys in one inning on nine pitches.
Obviously that qualifies him to draft legislation.
@9
Agreed. Unless it’s going to be backed by the Japanese government and paid out in Yen.
@FUN you’re cheeky today!
ep put it in the title.
so 3bps is like saying something about the weather. It rained .001 inches of rain, but now its going to rain .005 inches. These reporters have no concept of what they are saying.
I guess instead of spreading 26 inches she is spreading 29 inches. theres your spread joke
CDS prices are an absolute tail wagging the dog.They are going to go the way of portfolio insurance.
@24 what’s wrong with CDS? in a lot of ways, it’s just a more liquid version of a regular ol’ bond
5 yr interest rate swap + 5 yr corporate CDS = synthetic 5 yr corporate bond
@25–same thing that’s wrong with monolines.
I don’t get this contract at all — why would there be any nonzero probability of the US Treasury defaulting? They’ll just inflate their way out anything. Unless that’s somehow built into the contract’s definition of credit event.
What was this contract quoted for last summer? Say June or so?
~SEG
By the time the U.S. defaults on its sovereign debt, I’d have long since moved to Paraguay. How do I get in on this?
By the time the U.S. defaults on its sovereign debt, I’d have long since moved to Paraguay. How do I get in on this?
By the time the U.S. defaults on its sovereign debt, I’d have long since moved to Paraguay. How do I get in on this?
Runaway! Runaway!
pansy
you’re a dipshit if your answer is to buy it
@28 – type bank on Bloomberg. The US Gov is #16. Looks like it was around 8 in late June according to the chart.
@23, The incremental move is significant, not the nominal. 10%…I bet it would matter in a hurricane between 135 mph winds and almost 150 mph, about the difference between a category 4 and 5.
Been selling it all day. Unfortunately, my Amex is maxed out and my home is under water, but I got Zimbabwe to sleeve me so I could get done with Wachovia.
@27: Exactly. I don’t get it either. Since all of the US government’s debt is denominated in USD, they can always just print the money. Countries that have defaulted generally had debt that wasn’t in their own currency so inflation wasn’t an option.
This makes no sense…
How could the issuer (seller) of the CDS have a better chance of remaining solvent than the government?
This makes no sense at all…
How could the issuer (seller) of the US Ten Year CDS have a higher chance of remaining solvent than the U.S. government?
TOwAVW Thanks again for the post.Thanks Again. Keep writing.
A big thank you for your blog post.Thanks Again. Fantastic.
Great, thanks for sharing this blog.Really thank you! Really Cool.
Thank you for your article.Really looking forward to read more. Awesome.
Very informative blog article. Cool.
Say, you got a nice blog.Much thanks again. Really Cool.
Im grateful for the post.Much thanks again. Really Great.
Say, you got a nice post.Thanks Again. Fantastic.
Im grateful for the blog article. Want more.
I really liked your post. Great.
I appreciate you sharing this blog post.Really thank you! Much obliged.
Wow, great article post.Much thanks again. Really Cool.
Im thankful for the article. Fantastic.
Thanks so much for the article post.Thanks Again. Great.
Thank you for your article.Thanks Again. Fantastic.
Awesome post. Really Cool.
Major thankies for the blog.Thanks Again. Will read on…
Wow, great blog post. Will read on…
Thanks for sharing, this is a fantastic article.Really thank you! Want more.
Thanks again for the blog.Thanks Again. Will read on…
Enjoyed every bit of your blog.Thanks Again. Will read on…
Great blog article.Really thank you! Really Great.
Thank you ever so for you blog article.Really thank you! Want more.
Im thankful for the article. Want more.
I am so grateful for your article. Cool.
Looking forward to reading more. Great blog post.Thanks Again. Cool.
Thanks a lot for the blog post.Really thank you! Cool.
Great, thanks for sharing this post. Cool.
Really enjoyed this blog. Will read on…
Thank you ever so for you article.Much thanks again. Much obliged.
I really like and appreciate your blog article.Really thank you! Great.
Hey, thanks for the blog post.Thanks Again.
We have created a take note so as to myself to create some thing added good on Thursdays, pending your current check out
I believe what you posted made a great deal of sense. However, what about this? suppose you added a little content? I am not saying your information isn’t good., however suppose you added something that makes people desire more? I mean Spread ‘Em Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks is a little vanilla. You ought to peek at Yahoo’s home page and watch how they write news titles to get people to open the links. You might try adding a video or a picture or two to grab readers interested about everything’ve got to say. In my opinion, it could make your blog a little livelier.
A round of applause for your article post.Much thanks again. Really Great.
A round of applause for your blog.Thanks Again. Will read on…
Really appreciate you sharing this article post.Really thank you! Really Great.
Thanks for sharing, this is a fantastic post. Awesome.
This is one awesome article.Thanks Again. Much obliged.
hey there and thank you for your info – I’ve definitely picked up anything new from right here. I did however expertise a few technical points using this web site, since I experienced to reload the website many times previous to I could get it to load correctly. I had been wondering if your hosting is OK? Not that I am complaining, but sluggish loading instances times will often affect your placement in google and can damage your high quality score if ads and marketing with Adwords. Well I’m adding this RSS to my email and can look out for much more of your respective fascinating content. Ensure that you update this again soon..
I intended to write you the tiny note to finally say thanks the moment again for these splendid tactics you have shared on this site. This has been so extremely open-handed with you to convey extensively just what a lot of folks would have supplied as an e-book to help with making some money on their own, precisely considering the fact that you might have done it if you ever considered necessary. These tricks as well served to provide a good way to fully grasp someone else have the same desire like mine to grasp a whole lot more in respect of this problem. I am certain there are some more pleasant opportunities up front for individuals that examine your site.
I enjoy the valuable particulars a person provide within your posts. Let me book mark symphony