US CDS Rises After No Agreement On Debt/Budget While Europe Trims Debt

Confounded Interest ^ | 10/14/2013 | Anthony B. Sanders

[whitedog57]

After a weekend of meetings, there is still no agreement on the debt ceiling or budget.

debtceilgst

The reaction? US credit default swaps rose this morning. But notice they are still lower than they were on October 10th.

uscds101413

The US has the fastest rising CDS. Simply because the alleged default on US sovereign debt isn’t hurting any other country.

sovcds101413

So, President Obama and Congress are digging in their heels on cutting spending or debt. Even though Germany is cutting back on its debt.

debtdrop

Two different philosophies: austerity to balance sovereign budgets (Europe) or spending like there is no tomorrow (US).

hannibalpit

[whitedog57]

Obama as Buffalo Bill. Or Kenyan Ken.

[Army Air Corps]

Ping.

[apoxonu]

Sorry, but IMHO, credit default swaps are worthless pieces of excrement and have no actual value to begin with. They never did. They are just a form of gambling with no real assets or any form of tangible backing behind them; a “derivative” of an actual asset-backed transaction.

They never should have been allowed to exist in the first place and when the CDS bubble really breaks, we are a thousand times more screwed than we are now.

[SAJ]

The fact that CDS' have risen only very, very modestly in this "crisis" tells you all you need to know: no one except the US lamestream media takes the notion of 'default' seriously, and this is for very good reason.

Financiers take money (and thus credit) seriously. The roboclowns in the US media wouldn't know a CDS from a ccy swap or a deferred reverse repo; they only "report" on finance when their director, to whose butt they have their lips firmly affixed, tells them to.

Being solely partisan hacks, AND stunningly ignorant into the bargain, any intelligent observer should very likely 1) listen to their "analysis", 2) figure out what said "analysis" implies for various mkts, then 3) do the exact opposite. In this context, one can find very good trades in the short end of the interest curve and in VIX as well.

Good trading to you, m'FRiend!