We all know, that money goes to the debt markets I EM in a system.
There are many reasons for this, so that EM can be traded as an investment grant, not like junk.
But the problem is, that things are going so well for EM debt, that underestimating risk is inevitable.
What will you bet on:
1) the epic fale of France, Britain and the USA;
2) epic fale Argentina, China, Russia finally.
?
I wouldn't, did not put on it, but the probability of the second is incomparably higher.
Quite typical “This time is different syndrome”.
No, I don’t need to short the debt.
Think, that he gets off dumb
way down, but temporarily.
