Mark Gongloff of the Wall Street Journal Is Simply Wrong
He writes::
Warning Signal on U.K. Debt?: As investors scramble to protect themselves from the next credit flare-up in Europe, their worries are spreading to the U.K. Investors bought a net $443 million of credit-default swaps to insure against a U.K. default last week, according to data compiled by the Depository Trust and Clearing Corp., taking the total outstanding to $8.2 billion....
That was easily the biggest gain among sovereign borrowers. The size of protection on the U.K. has roughly doubled since the year began, a move that far outpaces the run-up in Greek CDS last fall. The purchases haven't yet caused the prices of U.K. swaps to spike, as in other recent credit convulsions. But the market's behavior in some ways echoes behavior that preceded credit crises in Greece and elsewhere...
The essence of "worry spreading" is that the prices of swaps spike. If the prices don't spike, the worry isn't spreading. It is simply false to say that the market's behavior "in some ways echoes behavior that preceded credit crises in Greece." It does not echo it at all.
Neil Hume has a graph:
Why oh why can't we have a better press corps?
