Chart of the Day: Apparently US Default Is Not So Unlikely


Spike in US CDS (credit default swaps):

It certainly looks like the chatter about a US “Technical Default” is making some folks nervous.

While yields remain at rock-bottom prices, there’s been a noticeable uptick in 1-year CDS on US debt, notes Markit. As evidence that there’s something unique to the US going on, that spike is not mirrored in the UK. Not only that, volumes on the US have surged as well. Politicians would be wise to pay attention.

Source:  Business Insider


Treasury Prices Rise After Strongest-Bid 5-Year Auction Ever

The auction was heavily bid, with a cover of 3.20 that is the largest ever, according to CRT Capital. There was especially strong interest from indirect bidders, who took down 47.1% of the sale, compared to 40.4% over the last four auctions . . .

. . . Those strong results followed Tuesday’s similarly impressive sale of $35 billion in 2-year notes. The auction was well oversubscribed and offered at the lowest yield since November.