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Bank of America's Transforming World Atlas has loads of lovely infographics in it, but one of the most colourful is a map of the world's riskiest sovereign debt.The map uses the prices of credit-default swaps, which are derivatives that pay out if a borrower defaults.Here's the map:BAML Sovereign credit-default swaps have been used as a type of insurance against sovereign governments not paying back the money they owe. As with any insurance product, the more expensive it is, the more likely the event you're insuring against will happen soon.

The first Western downgrade of US government bonds is a fact! The German credit rating agency Feri lowered its rating on US debt by a full notch, from AAA to AA. Here is the German press release: Feri Downgrades US Gov Debt AAA to AAThe English translation: Homburg, 8 June 2011 - The Bad Homburg Feri EuroRating & Research AG downgraded the first credit rating agency's credit rating for the United States from AAA to AA. Feri analysts justify the downgrade by the continuing deterioration of the creditworthiness of the country due to high public debt, inadequate fiscal measures, and...

In the wake of the Japanese earthquake and tsunami, the world's media has become fixated on the Japanese nuclear disaster in Fukushima.  On top of the massive human, material and environmental destruction, the economic reverberations that may soon engulf Japan, Western Europe, and the United States as a result of these natural disasters will be potentially horrific. Japan's 9.0 earthquake triggered unprecedented damage across the northern part of the country.  An estimated 70,000 homes were damaged or destroyed.  Moreover, an estimated 10 to 20 percent of the nation's electrical generating capacity was temporarily knocked off-line and an estimated 5...

The old saying goes that just because you're paranoid doesn't mean everyone else isn't in on it. It's starting to feel that may be true in the bond market. For years (even decades) there have been theories about collusion between America and Asia in the government bond arena. Through the 1980s and 1990s, Japan supported America by buying Treasuries. And since 2000, China has stepped into that fray. Using its trade-earned dollar holdings to invest heavily in American paper. The conspiracy camp says Asia has been brow-beaten by America into doing so. There is no sound business case for them...

The Next Contagion by Martin D. Weiss, Ph.D. 02-01-10 Martin D. Weiss, Ph.D. The next contagion is beginning to spread around the globe. It is unexpected on Wall Street, misunderstood in Washington — and very dangerous. It could sabotage the plans of the U.S. Treasury, the Federal Reserve, and many of their counterparts overseas. It is … The Collapse of Sovereign Government Bonds This is certainly not the first financial contagion of recent memory: Back in 1997, we witnessed a currency contagion —hatched in Thailand, spreading quickly to the rest of Southeast Asia … smacking Russia in the gut …...

FROM GREECE TO CALIFORNIA TO JAPAN, markets are beginning to worry about what traditionally is deemed a risk-free asset: government debt securities. And that arguably lies behind the rise in the price of gold. In a provocative analysis, Standard & Poor's finds that gold is reflecting investor skittishness. And those concerns aren't just the usual ones typically associated with demand for the precious metal -- inflation -- but also concerns about the other safe harbor in times of trouble, supposedly risk-free government securities. The traditional worry about excessive government debt is that it can be inflated away by central-bank money...

It took the Obama administration less than a year to reduce the United States from the country with a currency that is considered a safe haven when international storms threaten, to one that is warned by a rating agency that unless it mends its profligate ways it will lose the triple-A credit rating it has had since U.S. government debt was first assessed in 1917. Who would have thought when Barack Obama took the oath of office some eleven months ago that Dubai World, Greece, the UK, and America would attract the attention of the rating agencies in the same...

This morning's e-mail brought notice of a dot-com Initial Public Offering (IPO) from Alibris, Inc., an Internet bookseller whose services I have sometimes used to buy out-of-print books, so I'm on its mail list. I forwarded the Alibris e-mail to my correspondent, Jack Andersen, author of many Sages' Pages pieces. I asked him whether he thought this IPO was a harbinger of a new bubble. This was his answer. Yes……stocks, bonds, precious metals & commodities, housing……all asset classes. The Fed made cash worthless. So much so that individuals followed the pros into the carry trade (borrow short, buy any asset)....