[Bass] If 2008 was the year of the subprime meltdown, 2010, he thinks, will be the year entire nations start going broke.
…Reinhart has found that a 90% ratio of government debt to GDP is a tipping point in economic growth… The U.S. government-debt-to-GDP ratio is 84%…
The CDS market is priced to imply a 3.1% chance of default over five years on Treasury debt.
To buy insurance against a default in Greece over the next five years costs 3.4% a year.
[Bass] His biggest potential score is in Japan. Government debt has soared to 190% of GDP from 50% in the mid-1990s, hitting an estimated $10 trillion in 2009… …Kanno in Tokyo says that Japanese bonds are in a bubble that could pop in the next three to five years, as savings rates drop.
February 7, 2010
Forbes cover story: Global Debt Bomb
Posted by n_cavallaro under All CommentaryLeave a Comment
The 2/8 Forbes cover story is well written and quite compelling. Here is the link along with some of my notes.
http://www.forbes.com/global/2010/0208/investing-credit-auditing-leverage-global-debt-bomb.html
[Bass] If 2008 was the year of the subprime meltdown, 2010, he thinks, will be the year entire nations start going broke.
…Reinhart has found that a 90% ratio of government debt to GDP is a tipping point in economic growth… The U.S. government-debt-to-GDP ratio is 84%…
The CDS market is priced to imply a 3.1% chance of default over five years on Treasury debt.
To buy insurance against a default in Greece over the next five years costs 3.4% a year.
[Bass] His biggest potential score is in Japan. Government debt has soared to 190% of GDP from 50% in the mid-1990s, hitting an estimated $10 trillion in 2009… …Kanno in Tokyo says that Japanese bonds are in a bubble that could pop in the next three to five years, as savings rates drop.