Is the U.S. a suspect credit risk now?

One good thing about the maligned credit default swaps market is that it allows people to make targeted bets--or buy specific insurance--on just about any bond that trades. It thus offers a barometer of strength that now rivals the stock market in terms of influence. Lehman Brothers and Bear Stearns were done in by the CDS market, as well as the stock market. Which brings us to Treasury debt. No one really thinks the U.S. is going to default, but Fortune notes that prices of CDS on Treasuries really spiked this week, hitting a record 31.3 basis points--compared to as little as 7.5 basis points in January (CMA DataVision). So now we have a barometer of what Wall Street thinks about the on-going efforts to bailout troubled banks.

For more:
- here's the Fortune article

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