"A Sea of Financial Bets" Is Being Built Against Italy

A journalist for the Italian daily Il Riformista looked into some balance sheet reports, and found out that currently, Italy is being singled out as the largest target for credit default swap (CDS) bets globally. And leading these bets is George Soros!

With $240 billion, Italy is currently the largest target of CDS contracts, accounting for 10% of the global market. The rush to Italian CDS has accelerated since March, going from 5,600 contracts to 6,600. The players fall into two categories: The banks that sell them and the speculators who buy them—who bet against Italian debt.

There are 17 banks involved: Bank of America, Merrill Lynch, Barclays, BNP Paribas, Calyon, Citibank, Crédit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Natixis, Nomura, Royal Bank of Scotland, Société Générale, and Unicredit. The purchasers are: Paulson, Soros, Moore, Citadel, and China Investment Corporation.

Insurance against an Italian default costs $236,000 for a $10 million five-year bond. It is as high as during the apex of the Greek crisis in May.