Never mind Greece, look at Venezuela
Via Business Insider comes this colourful map and chart of CDS spreads worldwide: Those who thought Greek bonds would be the most expensive to insure, since everyone knows it can't pay its debts, need to think again. Venezuela is the most expensive, by a long way. Related to that is this: The yield curve has been deeply inverted all year, but yields at all maturities are now rising: When even the yield on long-dated bonds is heading for 30%, the public finances are completely unsustainable. Venezuela, of course, is monetarily sovereign, since it issues its own currency. Well, in theory. In practice it is burning through reserves at a shocking rate to support its absurd managed exchange rate system: Don't be fooled by the uptick in June. That is because China lent it some dollars . It'll get through those in short order if it continues on its present path. To be sure, Venezuela is still earning FX due to its trade surplus, but its c...