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February, 2009
The CDS market for US Treasuries is relatively new because treasuries were considered "risk-free" prior to our current financial crisis. As you can see from the chart below, CDS prices are up more than 10X in the last 8 months. This price movement represents a clear message from the CDS market: over the last 8 months the risk of our government defaulting on its debt obligations has increased 10X.
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