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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (37943)	5/19/2010 11:53:32 PM
From: Spekulatius	Respond to of 78990

re Seth Klarman - i think a lot of things that he talks about are really fat tail risk. I think the sovereign default risk is real - for one thing politician are likely to kick the can down the road, as long as the can allows this to happen. Given the fact that most voters in the US are illiterate in terms of finances, there is not real incentive to cut deficits. At one point, we could end up in a runaway situation where things spiral out of control - higher interest rates make it harder to pay for the public debt, which causes higher interest rates - a positive feedback loop that will cause a significant meltdown. I think that risk is very real but we have a few years to go until then.