Other credit default swaps of note are Goldman Sachs which is at 166 basis points.
That's up 75 basis points since the SEC lawsuit was registered.
JP Morgan's swaps, one of the strongest of the banks with a "fortress like balance sheet", trade at 88 basis points. Morgan Stanley's are at 182, Merrill 191, Bank of America 160, and Citi at 185.
The US Treasury is in the midst of selling another record amount of weekly debt. Monday's auction of five year TIPS (Treasury Inflation Protected Bonds) did not go as well as hoped. Only 23% went to "indirect" buyers. Indirect is a proxy for foreign central banks and other foreign buyers. Lately, more like 39% has gone indirect on TIPS auctions. And Tuesday's auction of 2 year bonds were well covered at 3 bonds bid for every one offered, but the indirect was 31% versus a 10 auction average of 45%. It's too early to draw conclusions but evidence is emerging that foreigners are starting to avoid our debt.
The US Treasury has gotten away for quite some time with selling short term debt to finance the government. The average maturity of US debt outstanding is just under five years. Greece's average maturity is just over five years, and the UK's is fourteen years. The Treasury paid $383 billion in interest on its debt in fiscal 2009 which ended in September. That was down from $451 billion the year before according to Treasury. It is 3.2% of GDP, down from 4.6% a decade earlier. (As an aside, one of the fears regarding Greece is that before long 10% of its GDP will be required to service its debt.) The obvious danger for the US beyond the large financing need to fund the deficits, is the risk interest rates go up. They will someday and the results will be painful for a mountain of debt coming due in rapid sequence.
I'll be traveling again and will miss a note usually written Wednesday for Thursday. The Fed will have made its announcement following its two day meeting. I expect no change in the language regarding interest rates. The Fed will say they will keep rates exceptionally low for an extended period. There is a school of thought espoused by some very smart people that the Fed will change the language to prepare us for a hike in interest rates. The thesis is that since retail sales, "core" capital goods orders, and housing starts are advancing the Fed should act pre-emptively and raise rates. The counter would be that all of the above is true but these are advancing but off of very low bases. There are still low rates of resource utilization, subdued inflation trends (the core PPI was up only .9% year over year) , and there are very stable inflation expectations. The Fed might change its statement regarding growth, but not regarding rates.
Vincent Farrell, Jr. is chief investment officer at Soleil Securities Group and a regular contributor to CNBC.