Credit Default Swaps are in essence insurance against a bond defaulting. Swaps rising against US Debt is a sign that the world is losing faith in the creditworthiness of America, more scary stuff.-Lou
US Treasury default swaps jump to new record
New York, Feb 18 (Reuters) - The cost to insure U.S. Treasury debt with credit default swaps jumped to a record high on Wednesday as President Barack Obama unveiled another round of spending designed to stem home foreclosures. Credit default swaps on U.S. government debt widened 8.5 basis points to 90 basis points, or $90,000 per year for five years to insure $10 million in debt, according to Markit.
The swaps had traded at less than 10 basis points a year ago. President Barack Obama on Wednesday pledged up to $275 billion to help stem a wave of home foreclosures that sparked the U.S. financial meltdowd.
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