I just touched down in Paris three hours ago. I am sufficiently jet-lagged, but my boyfriend suggested I take a look at this recent article about France’s credit risk. “The credit default swaps tied to the French bonds imply a rating of Baa1, seven steps below its actual top ranking of Aaa at Moody’s, according to the New York-based firm’s capital markets research group.”
Apparently, the French government’s “AAA” credit is actually worse than Panama, even though Panama is rated BBB-. CDS, insurance contracts against bond default, cost over one percent of interest, their highest level so far.
Yet the French news is obsessed with unusual amount of snow hitting the country right now. Ignorance is bliss, but maybe things will change once their pension fund runs dry. (In the meantime, I’ll be enjoying my baguette and brie.)
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