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First bond yields, now Illinois State CDS overtake California

|Includes: AFB, AGO, AKF, AKP, AKT, AMBC, APX, AYN, BAB, BABI, BAF, BBF, BBK, BCK, BCL, BFC, BRF, BRK.A, BRK.B, BRXX, BZF, BZL, BZQ, CYB, EWY, EWZ, GJM, GKM, GMA, GOM, KEF, KF, MAB, MBI, MetLife, Inc. (MET), MET.B, MET.PA, MEU, MUNI, MYI, MZF, PCY, SKOR-OLD, UBR

We began the week reporting how bond yields on Illinois State general obligation debt had overtaken similar bond yields on California State debt so it probably isn't a surprise to end the week reporting how Illinois credit default swap prices have now also overtaken California credit default swap prices. Illinois is now the highest priced (high price implying riskiest or most likely to default) municipal entity in America and currently trading around similar levels as Portugal.

Investors are clearly worried about the state of this state's finances and other impending issues including a teachers pension fund that is underwater and trying to swim back to shore carrying anchors tied to the creditworthiness of companies and sovereign states like MetLife, Brazil and Korea.


Disclosure: long all stocks