Thursday, December 1, 2011

Inevitability of a Death Spiral

I think Satyajit Das’ guest post

The Sovereign Debt Train Wreck
from The Big Picture by Barry Ritholtz

does a very nice job highlighting and clarifying some of my thoughts on the U.S. sovereign debt problem, which is clearly not being priced with a US 10y Treasury at 2.10% or even 4%.  For those of you unfamiliar with Satyajit Das, his book exposed ex-ante both what caused the financial panic of 2008-2009 and the concurrent disgusting practices prevalent in finance.

For my thoughts on death spiral and the generosity of Asian central banks, see posts

Generosity of Asian Central Banks

Death Spiral of a Country

Death Spiral Warning Graph

Unsustainable Gift

Nine Lives of the Fed Put

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