Thank you Shaza
In the past few weeks I have been getting a lot of questions about serial sovereign defaults and how to predict which countries will or won’t suspend debt payments or otherwise get into trouble. The most common question is whether or not there is a threshold of debt (measured, say, against total GDP) above which we need to start worrying.
Perhaps because I started my career in 1987 trading defaulted and restructured bank loans during the LDC Crisis, I have spent the last 30 years as a finance history junky, obsessively reading everything I can about the history of financial markets, banking and sovereign debt crises, and international capital flows. My book, The Volatility Machine, published in 2002, examines the past 200 years of international financial crises in order to derive a theory of debt crisis using the work of Hyman Minsky and Charles Kindleberger.
No aspect of history seems to repeat itself quite as regularly as financial history. The written history of financial crises dates back at least as far back as the reign of Tiberius, when we have very good accounts of Rome’s 33 AD real estate crisis. No one reading about that particular crisis will find any of it strange or unfamiliar – least of all the 100-million-sesterces interest-free loan the emperor had to provide (without even having read Bagehot) in order to end the panic.
So although I am not smart enough to tell you who will or won’t default (I have my suspicions however), based on my historical reading and experiences, I think there are two statements that I can make with confidence. First, we have only begun the period of sovereign default.
This is a long article so I am posting the rest below
http://mpettis.com/2010/07/do-sovereign-debt-ratios-matter/
Some really amazing pictures that were in the Denver Post that Shaza sent in.
Captured: America in Color from 1939-1943
http://blogs.denverpost.com/captured/2010/07/26/captured-america-in-color-from-1939-1943/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+dp-blogs-captured
Some really amazing pictures that were in the Denver Post that Shaza sent in.
Captured: America in Color from 1939-1943
http://blogs.denverpost.com/captured/2010/07/26/captured-america-in-color-from-1939-1943/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+dp-blogs-captured
Art Cashin of head of floor operations at he NYSE for UBS
http://kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/8/7_Art_Cashin.html
And what is the weekend without Ted Butler on Metals
http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/8/7_Ted_Butler_on_the_Metals_Market.html