My dear impertinent ones, dear impertinent ones,
Credit Default Swaps (CDS) are derivative products used to insure against the default of an underlying asset (company or government).
The buyer pays a premium to the seller, who undertakes to reimburse him in the event of such a defect.
When the price (rate) of a CDS increases, it is because the price of insurance increases! Logic.
If the price of insurance increases, it means that the risk increases. Logic !
So when France’s CDS goes from 23.70 to 31… it means that France’s risks of bankruptcy are increasing.
Ho, don’t worry, we’re not there yet.
But…
In the coming days there will be a certain “stress” on the markets which has already started.
Fall in the stock market, tensions on rates, increase in the spread with Germany (rate difference)… nothing is going well and will not go until the first round.
Depending on the results… it will be even worse until the second round.
The chart you see below is that of France’s CDS, and it is not reassuring!
I’m preparing a special flash for you before the first round.
It’s already too late, but all is not lost.
Prepare yourselves !
Charles SANNAT
To all subscribers to the STRATEGIES Letterthe file for the month of May is available in your reader areas here. It is dedicated to the stock market and stock investments. It is very important, even more so in the current context resulting from yesterday’s European elections where Macron decided to dissolve the National Assembly.
Our country (whether we are for or against is not the subject) risks entering a period of political turbulence.
Potential instability which can have repercussions on your assets, your currency and your liquidity.
Foreign and particularly American actions are a way of desensitizing yourself to the Eurozone, the Euro and the European Union. I explain everything to you in this file and I demonstrate to you the effectiveness of a very specific index strategy which will allow you to maximize what we call the return/risk couple. All the information to subscribe here.
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