Kirchnerland and Chavezland and the worst Credit Default Swaps

List of countries with worst CDS (Credit Default Swaps). November 2008 (source: Bespoke)

This is the list of CDS (Credit Default Swaps) of the main countries of the world ordered from highest to lowest risk. I reccomend you not to invest in a country that appear in the top of this list obtained from Bespoke.

The CDS was invented in 1997 by a JP Morgan Department. Are OTC derivatives (Over the Counter) so there is no clearing house- It means there exist counterparty risk, with the bank or financial institution.

 A CDS is a derivative contract between two parties by which it measures the risk that the underlying derivative of that, in this case a country is declared bankrupt (or default) for their debts. In summary, it measures the “risk of bankruptcy.”

 Although is an indicator with many inefficiencies, I assure you it is much better to invest in a country with a low risk of bankruptcy.

 Iceland, whose government has had to receive several loans urgent to trades with a CDS four times lower Argentina, the worst country in the world where to invest, and two times lower than Venezuela.

Kirchnerland and Chavezland meet virtually all the defects for any investor in the world to invest in his country.

Read this two interesting post about Argentina in spanish, from my Blog, and a Martin varsavsky post, both in spanish.