Stat of the Day: CDS Spreads for Cali, Michigan and Illinois are up and to the right

By Edward Harrison On May 14, 2010

You saw my Stat of the Day: California now in top ten for highest government default probabilities in the world. Here’s a look at those CDS spreads for California over time – Michigan and Illinois are in the mix here too.

A friend who saw these numbers, asked "is this what they mean by up and to the right?" The funny thing is, the spreads were worse in February.

You can see the other states in distress like New York, New Jersey and Nevada not far behind. The City of New York gets in there too. (Hat tip Scott)

Wait for July and August for the budget cuts necessary to reduce these CDS spreads to be felt in the real economy. That’s when things will soften quite a bit.

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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