In short, traders buy credit default swaps to insure against bond default. Hmmm… what could have possibly happened to these four countries -- of all the developed nations, the ones to experience the most rapid CDS purchase growth in the last 12 months. Here’s a hint: Brazil’s CDS volume shrank 16% over the same period.
Tuesday, November 24, 2009
Deficits Do Matter
In short, traders buy credit default swaps to insure against bond default. Hmmm… what could have possibly happened to these four countries -- of all the developed nations, the ones to experience the most rapid CDS purchase growth in the last 12 months. Here’s a hint: Brazil’s CDS volume shrank 16% over the same period.
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