what's especially awesome about our economic growth paradigm (which is ending), is that investors can actually place a bet that nations are going to fail. ... imagine the genius. ... i'd love to go to the ticket window with that play.

"Gimmie $3.5 billlion on Argentina in the 3rd quarter. ... and you know what? I'll tease that with Ukraine for another $2 billion."


Riskiest sovereign debt: a slide show...



10: The Dominican Republic has a 20.96% chance of being unable to honor its debt obligations over the next five years, according to CMA Datavision's latest 'Sovereign Risk Monitor'.
9: Greece has a 22.83% chance of default.
8: Iceland has a 25.77% chance of default.
7: Latvia has a 27.12% chance of default.
6: Iraq has a 27.98% chance of default.
5: Dubai has a 30.03% chance of default.
4: Pakistan has a 40.29% chance of default.
3: Ukraine has a 42.05% chance of default.
2: Venezuela has a 50.13% chance of default.
1: Argentina has a 50.66% chance of default in the next five years.

I'm thinking... Where's Ireland? Portugal? Spain? ... Mexico?

Interesting that this is occurring all over the planet. Not isolated to any region, or group of linked nations.

Yet people still insist this simultaneous meltdown is merely all the result of predatory lending practices, and "dumb poor people" taking out bad loans, and Jimmy Carter's CRA, and gay old Barney Frank ... It's baffling, yet true, that I still hear people blaming liberalism for all that ails industrial nations. Despite all that we know now, 2 years later with the dust settled from the 'Enron generation.' .... Even some esteemed editorial board members who write daily op-eds for major metro newspapers still pump the nonsense. ... Ah well.

The EU is going to dissolve, imo this year or next. I'm sure that free market capitalists like this guy (whom I agree with often) will still be ignoring the root cause:

"Doug Casey: European Union is going to implode soon"

http://www.thedailycrux.com/content/4231/Doug_Casey

.....

Must just be "spending" and bureaucracy and government excess that's causing it all. Not geology or exponential population growth.

Time to dig up the prediction/prognostication thread.

Wow no UK

Superwow no UK

can we bet on that?

lol so pathetic

Yeah, I'm taking this just as seriously as I took the "zomg world gov't by the end of 2009" thread

Where's the "US will break up like the USSR did" thread?

Conditions are actually pretty ripe for sovereign debt defaults. The last 300 years is packed with such defaults, people just tend to dismiss them as "bad things that happened to other people in other countries in another time where/when they weren't as smart/experienced as us". Some of those countries listed in the OP aren't exactly paragons of financial virtue, it wouldn't be at all shocking if they default on their foreign debt.

I was under the impression that Argentina was actually paying down its debt and had a relatively low debt:gdp ratio, so I'm confused at how they're #1 on the list. Anybody?

Jiggs,

Entities, including sovereigns, go broke. The world running out of oil is not required for this to happen. Spending more than you take in and running out of creditors is all that is required.

wut

Are you claiming that there won't be any sovereign defaults in the next five years?

The methodology of this list wouldn't favor including US/UK as they have highly liquid treasuries/gilts compared to the countries on the list (most of which seem to be thinly traded, so short exposure is obtained through CDS protection, which is what this list is based on). The source of the list:

http://www.cmavision.com/market-data

The market has priced in an excessive level of optimism for the upcoming elections for the UK to tackle its deficits? But yeah, agreed, I'm very bearish on both Gilts and the Pound.

of course they do.... but, at this rate of frequency?

Ok... granted... And it's not mutually exclusive to it either.

Lack of abundant credit, indeed... Are we not where we are as an empire of prosperity because of an age of rapid expansion? ... Is credit not ultimately based on this expansion? ... And what allowed such expansion?

former BP geologist and Ph.D. Colin Campbell in 2005:

"included in that is financial capital... the banks lent more than they had on deposit. ... it was because the banks had confidence that the resulting expansion of all this investment, and loans and everything was sufficient collateral for today's debt... so expansion tomorrow covered the debt of today... but, unseen by anybody, or unrecognized, was that this expansion was not just money... it was the good old cheap energy to make the wheels turn and do everything. ... (then) the bankers began to wake up and say 'well, this expansion isn't going to go on anymore without the cheap energy to make it happen.' ... that means that the massive amount of debt throughout the world is losing its collateral.... the physical decline of oil is only 2 or 3% per year, this is not clear full catastrophe, it's quite a gentle thing. ... But, the perception that arises on passing peak, this long decline, this could come instantaneously to the bankers, who suddenly wake up and say 'my God, we've got bad debt on our hands.' ... furthermore, you look at every single company quoted on the stock market, the accounts of all of these companies, every one of them, have a tacit, business-as-usual assumption about continuing cheap, easy oil such as they've known in their business. ...so once you realize that this cheap, abundant easy oil isn't there, that tells you that virtually every company quoted on the stock market is now over-valued; there has to be some radical re-adjustment... and capital really has to be reduced in some way to match the declining energy supply that it eventually depends."

Must just be "spending" and bureaucracy and government excess that's causing it all. Not geology or exponential population growth.




So you're a Malthusian Jiggs?

jfc

is that it? you're left cursing God? .... well, ok

Welcome to the forum, newb.

k ... if I'm still here by then... loser switches his avatar to Kirstie Alley for a month.

i dunno... maybe the EU won't dissolve completely, but it will be significantly altered by the end of 2011, yes.

okay. If one country leaves you win else I win.

Great big LOL at your thinking that decreasing the birthrate will reduce the risk sovereign defaults.

Did I say that? All I did was identify the root cause. I said nothing about reducing default.

If you're going to comment, you should try and focus on what I've said, not what you think I must mean... Thanks.

On top of those 4, I'm thinking where the fu** is The United States of America, Japan, Italy, Singapore, Belgium, Hungary, Ukraine, France, Israel, The United fu**ing Kingdom, Lebanon, and Zimbabwe to name a few.

US isn't in any danger of defaulting on foreign debts. They are mostly in dollars and we have a machine that prints those.

Wouldn't surprise me if the answers for Japan and the UK were similar although I really have no idea.

/edit You could probably throw individual US states in there though, except they probably get bailed out before defaulting.

this

Most economists include situations where debt is inflated away via monetary policy as a "default". Also loans are "restructured" on a "less than market" basis, i.e. when sovereign debts are restructured at rates non commensurate with the level of underlying risk.

There's probably better reasons why the US isn't near the top of the list. The main reason for sovereign debt defaults these days is the inability to roll over short term debt, which is strictly a "crisis of confidence" issue. No matter what the US does, lenders will still have more confidence in the US (no serious record of default) vs., say, Greece, which has been in default of some kind for about half of the last 300 years.