Reinko

Distinguishing Between Out of Favor Sectors and Doomed Ones

The title of this article is very nice:

Distinguishing Between Out of Favor Sectors and Doomed Ones

But we also have to look at Favor Countries and Doomed Ones.

Let me give you link and quote:

ft.com/cms/s/0/e30472a...

The price of credit default swaps on five-year US government debt hit a record 18 basis points in early trading, according to CMA Datavision. This means that it costs $18,000 a year to buy insurance on $10m of US government debt.

Comment: So I just had to advice to the European pension funds to buy this cheap bond insurance while the issuer still is alive.

Remember those bond insurers where USA municipals could buy AAA ratings on their issued bonds?

They are gone.

Remember Freddie and Fannie that were supposed to guarantee the mortgages?

They are bailed out...

What will happen to idiots who sell US government bond insurance at only 18 basis points or just 0.18%?????

Municipal bond insurers ==> Frannie ==> 18 basis points on five year US government bonds.

Who knows?