2011 is a developed-nation sovereign debt crisis with pronounced global implications; and the complexity of the burden-sharing decision-making process is far greater than anything we have witnessed in our lifetime.
Losses will be shared across sovereign borders, public and private sector boundaries, national and supra-national divisions and social strata. And that is just at a primary level. As this week’s headlines reveal, investors are just beginning to grasp the enormity of the second derivative impacts (for example, money funds and municipal bonds). And I’d offer that those are just the most obvious. Wait until people start to wonder what all that “cash” on corporate balance sheets really is (and might I suggest where it is) or how Tier 1 Capital is impacted by deteriorating sovereign debt ratings. - Peter Atwater
Losses will be shared across sovereign borders, public and private sector boundaries, national and supra-national divisions and social strata. And that is just at a primary level. As this week’s headlines reveal, investors are just beginning to grasp the enormity of the second derivative impacts (for example, money funds and municipal bonds). And I’d offer that those are just the most obvious. Wait until people start to wonder what all that “cash” on corporate balance sheets really is (and might I suggest where it is) or how Tier 1 Capital is impacted by deteriorating sovereign debt ratings. - Peter Atwater
No comments:
Post a Comment