Friday, October 7, 2011

Top 10 riskiest countries!

Sovereign debt issuers that is! And it is the marketplace that is usually the best arbiter of what is good and what is bad!

In the instance of sovereign debt it's the major global players and institutions, in this case through the use of credit default swaps (CDS), that set the market odds a country is going to default on its obligations in some actual or technical way.

CDS is a type of insurance policy where a premium paid by the buyer to insure a given face amount of bonds against some event that is considered a default.

Like a life insurance policy, the sicker the "patient" the more expensive the cost of insurance.

Why should any individual care about who is on this list?

CDS is important to we non-institutions and non-global players, not necessarily because we are investing in them, but because the stability of the world markets is critically important to the stability of our own lives.

CDS is one of the few tools, other than reports in the media, that we have at our disposal to use.

Greece and some other EU PIGS are the typical names we hear, but there are others on this Top 10 (or should it be a Bottom 10) list as well.

For anyone interested in reading the full study and the full analysis by CMA, it is excellent and was offered by the firm online here.

But for now, this is the list.

Click to enlarge

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