Category: Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten”

  1. MidlifeNocrisis says:

    A very interesting read….. even if it does have the tone of a political “hack job”. It’s always good to understand what your enemies are saying/thinking/believing.

  2. A says:

    Hmm, another summary of lessons.

    We must remember that something is only a lesson when there is a willing student.

  3. ch says:

    Sometime in the next 5-10 years, the unthinkable is going to happen & there will be major sovereign defaults – unless this time is different v. the past 200+ years.

    Save this great report for the inevitable “Hoocouldanode” discussions that will crop up in the media then, just like when home prices fell nationally, which was never supposed to be able to happen either

    • Thanks for the forecast

      Please disclose your track record of prior grand pronoucements that have come true

      • ch says:

        The report data above suggests a sovereign debt crisis/restructuring is likely, unless “it’s different this time.” For a data-driven guy, that part is hard to refute.

        Furthermore, there is ample evidence globally that important trade partners of the US are preparing for just such a thing (compare the $-value growth of US Treasuries that China bought last yr v. the $-value growth of gold that China bought last year for just one such example, but there are many others.) Again – for a data-driven guy, the objective fact is that in the past 2 years, China bought more in gold than they have bought in UST’s.

        Most US investors are ignoring these objective facts b/c “the US has never & would never default”, despite the objective fact that the US has defaulted 2x in the past 80 years – on foreign creditors in 1971, on domestic creditors in 1933.

        Ironically, the report above may be massively bullish for US equities, esp industrial & commodity equities, along with productive hard asset prices in the US – if the US loses its sole reserve status, the US is going to be one of the cheapest places in the world to manufacture much of the world’s goods…are you hearing any stories of US onshoring taking place? I sure am…

  4. constantnormal says:

    Hey BR, I know you’re currently bullish on emerging markets (also the EU, but that’s not my cuppa tea), surely figure 3 in this paper supports emerging market banks as investment-grade material (at least those that look good by conventional metrics). Do you have (or like) any positions in specific emerging market bank stocks (or bonds), or are you sticking to broad EM sector ETFs when dealing with Emerging Markets?

    Just curious, not looking for specific tips … I’ll do my own due diligence in that regard.

    • We primarily invest in EM and EU via ETFs

      I suspect its still a little early in EM, and not too late for EU.

      Have a look a VGK Europe and DVYE div emerging market (ass opposed to EEM, which is cap weighted )