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If you go to Sacramento this week, don't be surprised to hear champagne corks popping and chants of "We're #2! We're #2!" The cause for celebration? Illinois has overtaken California as the worst credit risk among American states. As of Monday, the credit default swap spread for Illinois general obligation bonds climbed to 313 basis points for a five-year contract -- meaning a bondholder must pay over 3% of the bond's face value per year to be insured against default. That's a higher price than for all but seven sovereign entities tracked by CMA, and slightly higher than California, whose...

Which European Union nations do investors in Credit Default Swap (CDS) contracts believe are most at risk of defaulting on their national debt payments? And how do various U.S. states rank in comparison to those EU-15 nations? Before going any further, since we haven't covered the topic previously, let's take a moment to discuss just what a Credit Default Swap is! Going by David Van Knapp's handy glossary for today's economic crisis, a credit default swap is "a contract between 'counterparties' that, in effect, insures against defaults in financial instruments. The buyer makes periodic payments to the seller, and...

I think I'll be having another cup. I dedicate this thread to all the coffee drinkers in the forum. Post your favorites below. I am having a freshly ground blend of African Coffee beans. What about you?

Study Shows European Banks Exposed To Credit Derivatives By Jeff Coelho OF DOW JONES NEWSWIRES LONDON (Dow Jones)--The swelling growth in the number of European banks using credit derivatives to enhance revenue calls for more accounting transparency, as less-experienced financial institutions could be at risk, rating agencies and analysts said Monday. Fitch Ratings said the preliminary results from its new study of a broad cross section of global financial institutions showed about three-quarters of European banks surveyed were net sellers of protection through credit derivatives. German banks, particularly the state Landesbanken, were largely involved as net sellers of protection, showing...