Kazakhstan a better credit risk than California

This may be more amusing than instructive, but here goes. This chart shows 5-year credit default swaps on bonds issued by the State of California and the government of Kazakhstan. As Bloomberg’s Chart of the Day notes, California would be ranked as the world’s eighth-largest economy, while Kazakhstan’s economy is only one-sixteenth as large. Yet the market is saying that California’s bonds are 50% more risky than those of Kazakhstan.

In case you’re wondering, similar credit default swaps on Greek government bonds are trading at 364 bps (only slightly higher than California’s 303). Iceland 524, Portugal 163, Spain 130, and Italy 128.

via Calafia Beach Pundit: Kazakhstan a better credit risk than California.