In what is turning out to be more than just a little bit of irony, sovereign credit default swaps may end up being more widely traded when a new basket of 15 countries is launched later this year through the Markit iTraxx SovX Western Europe Index (see WSJ article). It is widely believe by many that the corporate CDS market was to blame in part for the recent financial crisis. To help clean up the mess and unfreeze the credit markets, many European and world governments have been borrowing massive amounts of money and injecting it into their economic systems in order to add liquidity. Unfortunately, the massive spending and borrowing are putting the credit quality of many these same countries into jeopardy, producing an unusual turn of events as CDS contracts are now being used to protect against default in those very countries which had too many companies with dangerous levels of CDS exposure. Now, not only can you trade CDS contracts to protect yourself against a country defaulting, but soon you will be able to trade a more diversified basket of sovereign CDS contracts. Profitable? Maybe. Of course if there is another massive default, I am not sure who will be left to bail out this market if spending continues at current levels. There is only so long you can solve a problem caused by too much debt by taking out additional debt. But, look on the bright side. At least now you can trade it. I guess financial innovation never sleeps.
Did you like this article?
replica watchescheap fake
cheap fake watches
U-boat replica
A.Lange & Sohne watch for sale
croum replica
Breitling watches
Tag Heuer watch for sale
replica Jaquet droz
replica Louis Vuitton
Rolex Explorer watches
The supplier of most category of goods
nike airforce
Nike Air Max
replica watchesreplica
replica watch
Omega replica
Louis Vuitton replica
Bell & Ross replica
Longines replica
Piaget Altiplano Swiss ETA
discount Christian
cheap Christian Louboutin
YSL Platform Pumps&Slingbacks on sale
Christian Louboutin Evening
discount Christian Louboutin Fashion Boots
Yves Saint Laurent Boots
Christian Louboutin Platforms on sale
itouch touch copy ipod touch
the cheap Nike Air Max shoes
Scores of famous people have
Largest selection of
Have you ever seen the
oman all the time think they
After the Perna War on karos
Adidas 35TH
It is a wonderful
Christian Louboutincheap
cheap Christian Louboutin sandal
Christian Louboutin Boot on sale
discount Christian Louboutin Boot
Jimmy Choo Handbags
fake cartier watches
50% Off for Ed Hardy