This daily chart for credit default swaps futures suggests that concern continues to rise that defaults on debt will occur with greater frequency and intensity in the future. CDS's are used as a way to hedge against the possible default on debt. The higher cost of insuring debt against default continues to rise, which appears to suggest that investors are still worried, despite this week's latest government bail-out of Indymac, Freddie, and Fannie. For me, I pay more attention to these financial vehicles rather than to the lip service of government officials, because they represent the collective wisdom of many companies and individuals in the marketplace, all actively taking independent but collective actions in their own best interests. A word to the wise is sufficient.Friday, July 18, 2008
Credit Default Swap Futures Continue to Rise
This daily chart for credit default swaps futures suggests that concern continues to rise that defaults on debt will occur with greater frequency and intensity in the future. CDS's are used as a way to hedge against the possible default on debt. The higher cost of insuring debt against default continues to rise, which appears to suggest that investors are still worried, despite this week's latest government bail-out of Indymac, Freddie, and Fannie. For me, I pay more attention to these financial vehicles rather than to the lip service of government officials, because they represent the collective wisdom of many companies and individuals in the marketplace, all actively taking independent but collective actions in their own best interests. A word to the wise is sufficient.
