10 States Most Likely To Default

Default risk is rising in America, as many states can’t balance their budget.

Although a state default would be unprecendeted, CDS spreads show that traders take the risk seriously. We’ve got the latest numbers from Bloomberg (via Credit Writedowns).

Are you living in the next Greece?

Wisconsin CDS spread — 72.3 bps

Wisconsin CDS spread -- 72.3 bps

Wisconsin was forced to make painful budget cuts last year, including 16 days of furloughs and $5 billion in new taxes.Municipal Bond Ratings (Moody’s): Aa3

Source: Bloomberg

Massachusetts CDS spread — 77.1 bps

Massachusetts CDS spread -- 77.1 bpsImage: AP

Massachusetts experiences a net migrations of nearly negative 10,000 people per year, which will reduce the amount of taxpayers in the state if the trend continues.Municipal Bond Ratings (Moody’s): Aa1

Source: Bloomberg

Ohio CDS spread — 87.8 bps

Ohio CDS spread -- 87.8 bps

High unemployment may have caused an unprecedented surge in Ohio liquor sales.Municipal Bond Ratings (Moody’s): Aa1

Source: Bloomberg

Nevada CDS spread — 131.1 bps

Nevada CDS spread -- 131.1 bpsImage: AP

Nevada went nuts with next year’s budget, cutting spending on education, adult care, hearing aids, speech therapy, adult diapers, and much more.Municipal Bond Ratings (Moody’s): Aa2

Source: Bloomberg

New Jersey CDS spread — 142.5 bps

New Jersey CDS spread -- 142.5 bps

New Jersey teachers want Governor Chris Christie dead for pushing a salary freeze.Municipal Bond Ratings (Moody’s): Aa2

Source: Bloomberg

New York CDS spread — 147.3 bps

New York CDS spread -- 147.3 bpsImage: http://www.flickr.com/photos/baron_army/4600029848/

New York state is facing a deficit of $60.8 billion over the next five years, according to Reuters.Municipal Bond Ratings (Moody’s): Aa2

Source: Bloomberg

BONUS: New York City CDS spread — 147.3 bps

BONUS: New York City CDS spread -- 147.3 bps

Bloomberg is launching an austerity budget and cutting 11,000 city jobs. The mayor has directed bitter comments toward the stingy state government.Municipal Bond Ratings (Moody’s): Not Available

Source: Bloomberg

Michigan CDS spread: 166.7

Michigan CDS spread: 166.7

Michigan is one of seven states where local communities might lose the support of their state government as a result of financial problems.Municipal Bond Ratings (Moody’s): Aa3

Source: Bloomberg

California CDS spread: 170.9 bps

California CDS spread: 170.9 bps

Schwarzenegger’s office just warned of “terrible cuts, absolutely terrible cuts” coming soon to California.Municipal Bond Ratings (Moody’s): Baa1

Source: Bloomberg

Illinois CDS spread: 217.8 bps

Illinois CDS spread: 217.8 bps

Illinois budget crisis is reaching a boiling point as Governor Quinn still can’t close the $13 billion gap.Municipal Bond Ratings (Moody’s): Aa3

Source: Bloomberg

Read more interesting posts by Business Insider >

More Articles About:   ,  

More from The Cheat Sheet