Treasuries Credit Default Swaps at Record Highs, Yet Yields Record Lows?

These are two contrary readings. The 5 year US treasury yield is 1.47%, while the 'risk premium' determined by CDS prices to insure them is .695% (69.5 bp).

As much as the flight to quality has driven treasuries and the US dollar to recent highs, it is a peculiar point to consider that in the same environment of minimal counterparty trust that someone is willing to pay 69 basis points a year for insurance to likely a less viable counterparty than the US government. This is the same environment where banks still trust each other less 1 year out (1.86% 1 year LIBOR) than they trust the US government 5 years (1.47%). A 1 year treasury earns you a hefty .40% yield, apples to apples.

Maybe if these CDS were denominated in gold ounces or euros and collateralized by future earnings of the CDS writers' first born might they make any sense.