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It's simple, so I don't really get what you guys are arguing about... It's horses for courses, so the actual terms don't matter as long as the expectations on either side are managed. If everyone knows and explicitly agrees the terms upfront, there should be no issues. Obviously, the terms a...

Arnaud is very good... Been arnd and worked in all sorts of interesting places. In general, a lot of interesting work on the unfunded liabilities (not just the US) has been done by an academic by the name of Jagadeesh Gokhale.

Ireland did make a lot of really tough cutbacks, which were initially taken extremely well by the mkt. However, more recently the Irish sovereign backstop for the banking system (the bad bank called NAMA) has run into some issues, which have cast doubt on the ability of the sovereign to handle...

Not sure what 1% you might be referring to here, but rates did rise as a result of the uncertain future facing all these countries. Who borrowed loads of money? Neither Ireland, nor Portugal, nor Spain borrowed from the IMF or the ECB. Only Greece received funds as part of an EU/IMF rescue...

Well, FWIW, the 5s10s30s fly is at -15 in Swedish guvvies, so that's the fairest of 'em all for me.

achilles, I am not saying that the scenario that you describe is impossible. My point is that, in similar vein, I don't see it as inevitable. We could argue these things endlessly, but, in simplest terms, I think this time is a bit different, but not that different. Crises like these have...

Without the ECB's help... How can they avoid borrowing? Whatever happens in the future, they have a deficit to finance... And, sus, I sure hope these hungry people are thinking twice... 'Cause you know what happens if you're too hungry and bite off more than you can chew?

Portugal auction was good, so it's all coming back now... Hence, the EUR.

As you were, gentlemen...

Yep, I realize it... However, IMHO, modern macroeconomics is hardly a mathematically sophisticated exact science. Hence my comment.

Well, I'll have to respectfully disagree with your disagreement. While I certainly see the merits of the theory that suggests cycles of bad debt accumulation followed by "resets", I just don't see how a complete collapse of fiat money and fractional-reserve banking inevitably follows. Collapse...

Wait, how exactly is this suddenly a revelation? People have been talking about the various unfunded contingent liabilities of the system for years now and not just in the US.

BTW, with all due respect, Misthos, you're a bit too much of a doom-monger, IMHO. I like the most recent paper by the Reinharts a bit more. Obv, there's also the Reinhart and Rogoff book, but the paper is a bit more recent. You can find it here...

Actually, it wasn't JCT on the bid. Apparently, a whole bunch of PFs (including a large chunk of IRISH that went straight into a Scandi account). Moreover, it's a well-known fact that the ECB has pared back its buying a lot recently (they increased a bit last week, but still very small).

Yes, you're absolutely right, sle... I stand corrected, the ZB CTD not a 25y bond, but rather a 2026 maturity bond, i.e. a 15y bond. You're right about the Ultra too. So it's 2s7s15s and 2s7s25s and, as you say, the 2s7s25s should be good enough.

Good luck, m8... I think you might be in for a disappointment.

We're veering off subject here, Misthos, I believe... We've discussed this issue before. Yes, I am in agreement with you, TBTF is bad and has to be dealt with. Yes, people have not been punished sufficiently for the irresponsible crap they have done. But what else is new? All I am trying...

Who gives a rat's ass about SocGen's and Deutsche's losses, Misthos? Come on, I would think that you of all people wouldn't succumb to the media frenzy. Do you know how much Greek debt is owned by SocGen and BNP combined (and that's including both banking and trading books)? Arnd €8bn...

Well, sure thing, it's entirely possible that the EU powers that be have decided that, in the interest of preserving the political union, losses on an eventual sov default have to be socialized. If that's the case, what they're doing is just making sure the default when/if it happens, occurs in...

Given that the ECB sterilizes its bond purchases, this is not, strictly speaking, a printing press.