Is Britain going bankrupt?
The cost of insuring against the bankruptcy of the British state has broken out - upwards - over the last month. Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have.
Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world.
Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49).
As usual the the comments shed more light on the real state of the country than the article.
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1 comment:
The debt situation is going to get better. With the recent bailout, it has opened more doors for the consumer. I think that we will see a strong turn around in 2009.
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