STUPID Longs Scramble For Cover
The STUPID Index is on a roll: it is now 12bps wider to 224, the widest level since April 4, 2009. With UK CDS nearing 100 bps, STUPID non-member, and the country which will ultimately have to fund rolling bailouts, Germany - is somehow trading inside the US, north of 50 bps. Absent the Deutsche Mark making a stunning comeback, coupled with its becoming the reserve currency upon its reintroduction, there is no reason why the Germany-US spread should be negative (which is not to say the the US CDS is rich here).
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