Getting your player ready...
Would you feel safer with an IOU from Microsoft or from Uncle Sam?
Even though the federal government has the power to tax Americans, investors overall still choose Microsoft. That is shown through so-called “credit default swaps,” which provide insurance to investors in case a bond issuer fails.
In recent weeks, it has been more expensive to buy protection from a U.S. government default than one by Microsoft, according to a recent Credit Suisse report. Microsoft isn’t alone. Hewlett-Packard’s bonds also carry cheaper insurance. Investors are worried about the cost of resuscitating the economy.
