Step Aside Egypt CDS.... Here Come The Saudi Contagion Vigilantes
By now everyone knows that over the past few days, Egypt CDS has taken a hard right angle and has doubled from 200 bps to well over 400 bps (making it just slightly riskier than Illinois). And tomorrow Egypt risk will add another 80 or so basis points. No surprise there. What may surprise some, however, is that just like Egypt, Saudi CDS has also gone vertical. And with momentum chasers finally realizing that there is a direction other than tighter, expect the contagion vigilantes to do some serious damage here. If history is any precedent, there is a long way to go.
And Saudi Arabia
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