In its third-quarter survey of credit default swaps (insurance against debt default), CMA Datavision rates Venezuela the riskiest country by far (see first graph); but currently (as of Tuesday, 23 November 2010) the sub-investment grade of Allied irish Banks (AIB) is much, much worse (second graph).
Click on graphs to enlarge:
Some might say that supporters of the Euro currency system are throwing good money after bad. It is not a good thing to let the markets sense an emotional attachment to a position, and the bond traders may find a way to exploit this weakness, just as George Soros did when the U.K. attempted to preserve its link to the Exchange Rate Mechanism. The crisis of "Black Monday" (16 September 1992) merely made Soros a billion dollars and cost the U.K. Treasury £3 billion sterling.
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