Credit default swap monitor: Venezuela is the world's riskiest debt

Venezuela is deemed the world's riskiest sovereign credit, while Argentina moved to the second place in the ranking of countries whose debt is the costliest to insure against a possible default, credit default swap monitor CDS DataVision said on Tuesday.

CMA's quarterly survey of credit default swaps (CDS), which is the cost to insure against default or restructuring of debt, found Venezuela's sovereign debt insurance costs continue to be the highest, after it surpassed Ukraine in December.

Venezuela devalued its currency in January and inflation is about 25 percent.

Venezuela's CDS are close to 950 basis points (bps), meaning it costs USD 950,000 a year for five years to insure USD 10 million in sovereign debt.

However, for the first time since the start of the global financial crisis, no sovereign CDS is trading above 1,000 basis points, Reuters reported.

Link:
http://english.eluniversal.com/2010/04/06/en_eco_esp_credit-default-swap_06A3697653.shtml

A guy was interviewed at Planta Centro power plant, and he said he sure hopes they get the foreign currency to buy spare parts they need. Oil prices are $80 per barrel, so we should be flooded with cash. What do you think is going on, they gave up on repairing the plant?

I don't think they would be dumb enough to just abandon the power plant, not repair it, when we're so close to the edge. They have to be running out of money. The rating agencies must have some idea that our government is indeed going to run out of money in the future. I've always known these guys are missing a few wires in their heads, but I never thought it would get to this, not with the oil price so high.

You know what else? I think this idea of theirs, buying that refinery in Santo Domingo, is just a bluff. They can't be that dumb.