A surprising amount, apparently.
First, via The Daily Show and Jon Stewart, we learnt that the Hanke Panke / MOAB / TARP could buy every single American 2,000 McDonald’s apple pies.
But this is just ridiculous – according to the ever-reliable credit default swaps market, the US government is a riskier proposition than good old Mickey D.
CDS on McDonalds are only marginally more expensive than contracts written against ten-year US Treasurys, the FT’s capital markets desk notes.
On Thursday, for instance, 10-year CDS on McDonalds closed at 34.3bp, CMA data show, compared with 29.5bp for the US. And since US CDS in quoted in Euros, it’s actually more expensive to buy protection against a US default that it is to insure against a Mickey D credit event.
While this is a bit like comparing apples and oranges (or Big Macs and CDOs), it does give an idea of just how out of whack financial markets are at the moment.
Related links
New world (dis)order – FT Alphaville
Another way the Paulson plan is hurting Main Street – FT Alphaville
USAAA: “No God-given gift” – FT Alphaville