GRAPHIC: Thanks to Republicans, biggest spike in credit default risk among countries goes to the US!

[ProgressiveEconomist]

This month, the total value of bets on credit default in the US exceeded the value of bets on Greek default for the first time!

Bets on default in Greece, Portugal, and Turkey are declining in value (at the right side of the chart), while bets on US default are spiking both on year-over-year (red) and month-over-month (blue) bases. Thanks, Republicans!

See http://www.zerohedge.com/article/bond-vigilantes-are-here-us-net-notional-cds-outstanding-surpasses-greece-first-time ror more details.

[spanone]

1. they. don't . care.

[ProgressiveEconomist]

2. That's definitely true for Rs like Sen Pat Toomey (PA), who seems smart enough

to understand the consequences of his party's reckless gambles.

But I wonder about the 87 in the House who actually PLEDGED not to vote for any debt ceiling increase, though half of them apparently have violated that pledge. They will may be simply ignorant, like the voters who put them in office.

[ProgressiveEconomist]

5. Kick!

[ProgressiveEconomist]

6. Kick!

[MilesColtrane]

3. The elites are positioning themselves to make big bucks on the coming default.

This kind of shoots down the theory that the very rich would never allow it to happen.

[ProgressiveEconomist]

4. Not necessarily. You may be right about speculators who bet against the US.

But at least some if not most of those who buy US credit default swaps are HEDGERS who are running huge bond portfolios, and spend a couple of percent of their potential bond profits on insurance against almost unthinkable catasrtophe.

Of course, even those "insurance" bets would be problematic if the US DOES default. Those who've taken the other side of the bet won't be able to pay what they owe. Attempting to pay off the bets will cause a cascade of fire-sale asset prices that will bring the global economy down again, just as in 2007-8. Those who've chosen the "right" side of bets on default will have outsmarted themselves; they'll "win" but won't have anything to show for the billions they paid!