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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (39898)	11/3/2010 9:18:10 AM
From: Spekulatius	Read Replies (2) of 78742

Jurgis, >>Well, define "possible even though it's unlikely". :) 1% chance? 0.1% chance? 10% chance? << my assessment for the chance of a "Financial Supergau" during he next 5 years would be between 1% and 10% and probably closer to 1%. >> US still has a lot of tools to stop this from happening and the rest of the world also would need to prevent it, so the likelihood is low.<< Contrary to what you state, I don't think there is a lot of ways to stop panic in terms of sovereign default of the US. Treasuries are in an incredible bubble and real interest rates are at multi-decade lows, yet the fundamental underpinnings are weaker than ever. The combination of those factors will make it very hard to stop a loss of confidence and the trade to the exit with trillion $ of debt will become very crowded. Just because you believe the result of such a calamity will be unthinkable bad does not mean it will not happen. In fact for that very reason, it is more likely to happen. Probably enough bear cabal stuff for now, back to trading :-)

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