United States Risk of Default Jumps

Think the unthinkable. U.S. default risk jumps on govt loan purchase plan.

Long-dated Treasuries rallied with the 30-year bond jumping more than 3 points

The cost to insure against $10 million of debt issued by the U.S. government jumped to 47.5 basis points or $47,500 per year for five years, according to credit data company CMA DataVision. This compared with 43.5 basis points or $43,500 late Monday.

Credit default swaps insuring $10 million of U.S. Treasuries edged up to a record 50.0 basis points or $50,000 a year for 10 years

Earlier, before these latest expenditures, CNBC wrote a story that the U.S. might lose it's AAA credit rating.

The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

Naked Capitalism has a good overview post from earlier this month (which doesn't include these latest jumps).

Subject Meta: 

Forum Categories: 

Proof that the ratings companies are fraudulent

Anybody with any sense at all would have granted the United States a 'ZZZ' rating five years ago. I won't touch government bonds with a 20 foot pole at this point, seeing as how they've yet to pay off WWI.

Maximum jobs, not maximum profits.