As David Cameron Resignation Odds Surge From 100/1 To 8/1 In Hours, Is UK Default (And Contagion) Risk Set To Follow?
by Tyler Durden
What started off as a simple, if very much illegal, information gathering protocol (and yes, NOTW is most certainly not the only organization that hacked voice mails), and has since escalated to an epic shakedown of one of the world’s most legendary media companies in which Murdoch himself now appears on the verge of leaving the company, appears set to ultimately result in a historic parliamentary collapse, with the Prime Minister of the UK David Cameron seen as the ultimate fallguy. As English booking agency reports, “David Cameron’s odds of leaving the Cabinet have been slashed by Ladbrokes. The bookies have taken a steady stream of bets on the PM leaving office with the odds dropping from 100/1 to 20/1 and now 8/1 in a matter of hours.” In other words anyone who bet that the shuttering of the NOTW was merely the first step in the News Corp. scandal and that it would reach as high as the pinnacle of UK leadership, has made a return well over 10 times in the past several days. And yet, as the Economist chimes in with a late night piece, the departure of Cameron at this point is far from certain. Which is arguably a far worse state of affairs: if there is anything the markets hate, it is uncertainty. If Cameron was sure to stay or go, it would have no impact on the UK’s economy and financial markets. As it stands, and with Murdochgate getting worse by the minute, we would not be surprised to see UK CDS follow the US and Germany to multi-year highs, as the UK now openly becomes yet another target for the bond vigilantes who relish precisely this kind of uncertain inbetweenness.