Bespoke Investment Group has an interesting chart, listing the default risk of 44 countries based on current five-year credit default swap prices -- or the cost for investors to insure against government default. A few things jump out. First, Norway tops the list as the least risky country, underlining how solid its economy is. As well, the United States is a close second. For all the concerns about its economy and the health of the dollar, it appears that it is still the best place for risk-averse investors.
The list also makes it clear what the sovereign-debt crisis has done to some countries. Greece is at the bottom of the list, with an absurdly high CDS price – miles ahead of places like Venezuela, Argentina and Portugal. But Italy has fallen below places like Spain and Egypt, in terms of its rising CDS prices. And look at France: It is now closing in on Russia, Turkey and Poland.
Meanwhile, Paul Krugman at the New York Times has a typically succinct way to summarizing the current state of the debt crisis: "What the world needed in this global deleveraging crisis was deficit spending and higher inflation targets. What it got was fiscal austerity and obsessive concern with inflation risks that weren't real. Hence the catastrophe now unfolding."