The CMA Sovereign Risk Monitor calculates probability of default within 5 years by sovereign credit issuers in the US and other nations using market prices for credit default swaps (CDSs). They now have Illinois at greater risk of default in 5 years with Cumulative Probability of Default (CPD) of 23.26% versus California at only 22.73%. Both states beat Latvia at a mean 21.71% but lag behind Iraq at 23.79%.
The US states have been very irresponsible in promising big pension benefits that they can not afford to pay. I am expecting lots of sovereign defaults. The dominoes will start falling fast when peak oil hits.
|Share |||By Randall Parker at 2010 June 20 11:44 PM Economics Sovereign Crises|