Everything You Need To Know About Sovereign Debt Credit Default Swaps In 90 Seconds

Ukraine

Photo: AP

In case you haven’t heard, everyone’s freaking out over sovereign debt.And it makes perfect sense. Using the 5-year credit default swap spread as a benchmark, one can now check out just how risky some countries have become in recent years. Remember: two years ago, no one in the world would have thought that Dubai would default.

But let’s step back a second.

CMA Vision has put together an excellent presentation on the situation all around the world in various regions. A quick read through this will get you caught up on who is weak and who is strong.

Click to see the charts ->

Here's the worst 10 cases of sovereign debt; note how Ukraine's CDS currently takes the cake at nearly 1400 bps!

Source: CMA Vision

Here we have the world's safest sovereign debt. The U.S. is doing well but Norway is as safe as it gets.

Source: CMA Vision

The UK's situation is far worse than ours

Source: CMA Vision

In Asia, Vietnam leads the back at a notch below 250 bps; Look how low Hong Kong is!

Source: CMA Vision

In the Nordic region, you don't really have to worry too much about the risk of a default.

Source: CMA Vision

In Central/South America, risk is declining all around - see the downward trend with all the countries?

Source: CMA Vision

Dubai truly is a worst-case scenario - the 5yr CDS spread rose to above 600 today

Source: CMA Vision

Ukraine CDS costs a whopping 14% to insure! This is our bet for the next sovereign default for sure.

Source: CMA Vision

Iceland is screwed without its banks and it's already defaulting on its payments to the UK!

Source: CMA Vision

Increasing militarisation of Venezuela causing concern for regional stability.

Source: CMA Vision

In Europe's emerging markets, Latvia looks pretty risky.

Source: CMA Vision

The Oceania region is looking pretty safe.

Source: CMA Vision

Ireland's CDS spread is subsiding slightly, but Greece is totally screwed.

Source: CMA Vision

Now that you've inspected the world's CDS spreads...

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