U.S. More Likely to Default

The nonpartisan Congressional Budget Office today indicated that the debts of Fannie Mae and Freddie Mac should be placed on the balance sheet of the Federal government. Credit default swaps for the U.S. government continue to rise such that it now costs 18 basis points to insure against default.

Tim Backshall, chief strategist at Credit Derivatives Research, said the price implied that the US was more likely to default on its obligations than Japan, Germany, France, Quebec, the Netherlands and several Scandinavian countries.

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Cost of U.S. Loans Bail-Out Emerging