Top 10 Riskiest Sovereign Debt
A report by CMA Vision evaluates the risk of sovereign default globally.
The top 10, with a probability ranking of default within 5 years are:
- Venezuela 57.7
- Ukraine 54.6
- Argentina 49.1
- Latvia 30.1
- Iceland 25.4
- Dubai 25.1
- Lithuania 19.3
- Greece 17.4
- Romania 17.2
- Lebanon 17
Both Greece and Romania are new entries into the top 10.
Of the world's safest sovereign debt, the United States ranks 8th. Norway is #1. In fact all of those silly socialist countries are ranked in the top safest.
The report notes:
Both the USA and UK have been among the worst performing sovereign CDS this quarter- the UK is some 77% wider, the USA out by nearly 66%.
Concerns are mounting about the increase of debt to GDP ratios in UK and USA, 97% and 75% respectively.
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I don't think this list
have much relevance to reality.
why not?
It has Greece, Dubai and Romania, although I don't know the debt ratios of every country, seemed worthwhile to look at to me.
For example
Venezuela has a growing economy and a stable banking system. Their unemployment rate is 2% lower than ours. So why are they listed as #1?
Argentina has a current account surplus and large current account reserves. So why are they #3?
And finally, where is Britain? Why aren't they on this list? In fact, why are they still listed as AAA?
this is based on credit default swaps
and a model that includes CDS pricing.
So, take it with a grain of salt for obviously Venezuela having a high CDS spread is probably more about politics.
Why are the credit ratings agencies given as much credibility as ever without any reforms?
Maybe I should have put this into a comment because I have to agree, just going off of the CDS markets, pricing and spreads....as if these global trades are based always in reality (cough, cough).
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