They’re lovin’ it

November 27, 2008

After a round of tax cuts, fiscal expansion and other bailout plans in the United States to rescue the economy, investors are betting that the chances of a U.S. government debt default are almost equal to the probability of a default by hamburger chain McDonald’s.

The cost of insuring U.S. government debt against default for five years is $48,562 a year for $10 million of U.S. Treasuries or 47.562 basis points, according to Credit Default Swaps (CDS) prices.

This compares with around $54,750 a year for McDonald’s or $41,000 for telecom company AT&T.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see