The Invisible Hand of the Market Giving Us the Finger

February 27, 2010
From the New Yorker Online
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Global Sovereign Credit Default Pricing as of February 22, 2010

February 24, 2010

Below is a list of global sovereign CDS pricing as of Monday, February 22, 2010.  All this talk about sovereign credit weakness, sovereign defaults, and downgrades begs the question, if this list is supposedly bad, what do you call the list of major banks when their spreads blew out 3-4 fold over these at the end of 2008?  95% of those large banks that were too big to fail (or to large to succeed) ultimately have and will.

The better question over the next year or so will be which of these countries will be too small to save?

Global Sovereign Credit Default Prices as of 2/22/10 (1 of 4)

Global Sovereign Credit Default Prices as of 2/22/10 (2 of 4)

Global Sovereign Credit Default Prices as of 2/22/10 (3 of 4)

Global Sovereign Credit Default Prices as of 2/22/10 (4 of 4)

Below is a most recent view on Greece’s CDS prices in chart form.  Is the worst behind them?

Greece Credit Default Price Chart as of 2/22/10

And if this list of issuers represents the safest havens in the world, well then the new normal just got a whole lot more volatile.  I suppose the bond vigilantes can’t do much with tons of cash still on the sidelines in a deleveraging world.