Credit Defaults Swaps on Treasuries, McDonalds, and Britain

"Last week, the cost of insuring against a US default via credit derivatives hit record levels. Yesterday, London dealers were quoting between 23 and 28 basis points meaning it costs €23,000 ($33,600) to €28,000 a year to insure €10m in bonds. But the quotes for McDonalds were about 25bp-26bp."
Financial Times 9/27/08

A more recent story from IHT.
"The cost of insuring U.S. government debt against default over a 10-year span is a record $55,000 a year for $10 million worth of U.S. Treasury securities, or 55 basis points, as the cost is commonly expressed. That is a fraction of the 4,000 basis points for an emerging market country like Argentina, where some investors fear a default could happen as early as next year."

"in Britain, the swaps rose to a record 104 basis points for 10-year debt."..."The implied risk of holding debt issued by McDonald's was 67 basis points for 10-year securities on Tuesday"

Even with a perceived increasing risk of default, the prices for Treasuries and the rates are still falling. Right now the 10 year Treasury is just above 2.50% and the 3 month has a yield very close to zero. Since an active market in credit default swaps is relatively new, we don't have any much experience with seeing a situation where credit default swap prices are rising and yields on the underlying are falling. But seriously is Britain more likely to default on its Sterling obligations than McDonalds?