Pepsi and IBM are Now More Creditworthy than the U.S. Government → Washingtons Blog
Pepsi and IBM are Now More Creditworthy than the U.S. Government - Washingtons Blog

Thursday, February 26, 2009

Pepsi and IBM are Now More Creditworthy than the U.S. Government

Agora Financial's Rude Awakening notes that the U.S. Government is now considered less credit-worthy than Pepsi or IBM by the credit default swap market:

As the nearby chart indicates, the price of insuring Treasury debt against default now costs more than the price of insuring the debt of almost any AA or A+ rated company in the country. In other words, the Treasury is not quite as AAA as it should be, according to the buyers of credit default swaps.

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But fear not, CDS on Treasury debt remains well below the price of comparable CDS on Bulgarian, Argentinean and Latvian debt.***

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Of course, this might have a little to do with it:




















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