CDS Cheaper for Russia than California

We have all heard about the emergence of the BRIC nations (Brazil, Russia, India and China) as major economic forces to be reckoned with in the 21st century. Few saw their influence growing so strong so quickly.

Trading in Yuans and Real was merely the opening salvo for the emerging markets as now many are being deemed less risky investments than the "developed" i.e. Western economies by the world of finance.

Today we see that Russia Beats California as Default Swaps Favor BRICs, meaning the invisible hand of the market sees California as more likely to default on their debts than Russia. This is the same Russian economy plagued with fears of currency devaluation: Ruble Slumps on Devaluation Fears by Ruble Devaluation. The Ruble has been battered by 26% year over year against other major currencies including the U.S. Dollar.

Martin Armstrong describes this process of rapid decline and or ascension as a "phase change" and likens the process to boiling water as it heats up and remains water to the point that almost instantaneously it turns into vapor. If you have not yet read his latest work, check out How All Systems Can Collapse Overnight.