Ratings agency Fitch cut Greece's long-term credit rating from B- to CCC Thursday, only one notch above default level, reflecting worries over its ability to remain in the euro currency zone.
Focus is on whether the EU leaders can provide help so that Greece will not technically default on its debt obligations, or whether some level of default will occur with Greece, and will be acknowledged by the EU as going to occur.
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It isn't enough to compare the spread to its average, Mr. Fridson says, because the average doesn't reflect the current level of default risk, the strength of the economy, the yield on government bonds or the availability of credit.
The default rate by principal amount stayed level at 5.9% at the end of April while the default rate by issuer count fell to 7.1% at the end April from at 7.2% at the end of March.
Total consumer credit default is 7.6%, the same level as last year but two points higher than the 7.7% default rate in 2009, which was a record breaking year for loan defaults due to a recession.
The cost to protect against a default by RadioShack reached its highest level ever on Wednesday.
This exposes the instability in the entire structure, because as soon as prices level off, the default rate starts to go up.
The only real solution for insolvent Europe is to explicitly default on the debt to a level that brings PIIGS countries to a debt to GDP ratio below 60%.
Bloomberg reports that credit default swaps on BofA reached their highest level since May 2009.
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Those 50% of us Americans who think and read beyond an 8th grade level know what the consequences of default are.
Now, the EU is seeking to bring that ceiling down to 80dB on all portable music players in an effort to protect the precious hearing abilities of its citizens, though we should note that said level would only apply to the default setting, not overall maximums.
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If this logic is too abstract, or opens up a discomfiting door, then the default should be that government minds its business at any level.
The yield on high-yield bonds has risen to 9.33%, the highest level since 2002 and a sign of growing default risk, even though defaults remain near a historic low.
The, The cost incurred to buy Credit Default Swap protection on corporate bonds from climbed to the highest level this month.
Spreads, or risk premiums, on junk bonds in the U.S. have fallen to their lowest level in two years, while a fall in default rates in December marked the first monthly decline since October 2007.
On the European Union debt crisis front, an Italian bond auction was well-subscribed Tuesday, but yields were still at or above the critical 7% level that is deemed in the danger zone for credit default.
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Default settings for software products sold to consumers should be at the highest level of security, they said.
Yet most bank CDS are trading well above this level, with many Spanish and Italian banks implicitly trading at probabilities of default well above 30%.
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