Goldman CDS Curve Inverted As Probe Deepens

The front-end of the credit default swap spread curve on Goldman Sachs became inverted late last week for the first time since mid-2009, meaning the cost of buying protection on the firm became more expensive over the shorter term than the long term. Traders are attributing the move to jump-to-default risk—essentially the fear that negative headlines and regulatory pressure on the firm could ultimately cause it to fail.