Gov't Default Concerns Overblown, But Sing Along With The "Raise The Debt Ceiling" Rap

Confounded Interest ^ | 10/15/2013 | Anthony B. Sanders

[whitedog57]

While the media and Democrats scream about the Titanic sinking of government default, there is scant evidence in financial markets of it.

Here are two curves as of 1pm EST, the US Treasury yield curve and the US credit default swaps curve. The Treasury curve is upward sloping while the CDS curve is downward sloping. Actually, the CDS curve has an inverted hump.

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It does look like a bomb crater rather than a typical CDS curve. If we look at 1 month ago, we see an upward sloping CDS curve.

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And if we compare the current curves compared to President Obama’s inauguration date, we see an upward sloping CDS curve as well.

If we look at the US 5 yr CDS, we see that it is not really noticeable.

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BUT if we look at the 1 year CDS, we see a spike, the worst since 2011.

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So, there you have it. A default is showing up in the 1 year CDS, but not the 5 year CDS. But the 1 year CDS still isn’t as bad as 2011, when the Republicans last tried to hold the line on government spending.

While Obama, Reid and Boehner argue about the debt ceiling, you can sing along with “Raise The Debt Ceiling Rap.”

hump-day

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TOPICS: Business/Economy; Government; Politics
KEYWORDS: boehner; ceiling; debt; obama

[whitedog57]

Love the rap!