Comments on: The World’s Safest Sovereign Debt http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/ Alea Jacta Est Wed, 03 Mar 2010 18:43:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Amateur? http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-3287 Amateur? Wed, 01 Jul 2009 14:56:41 +0000 http://www.aleablog.com/?p=2984#comment-3287 I haven't done this stuff but I would look first a state's ability to collect further income when needed. The USA can print more money if they are not afraid of inflation. Norway can sell more oil, which doesn't cause inflation. Oil is thus better than a printing machine. Australians already have some private debt which limits government's ability to increase taxes, if a financial meltdown hits it. Current account is negative. It is an exporter of commodities (but not oil), thus a global meltdown would hit her hard. I haven’t done this stuff but I would look first a state’s ability to collect further income when needed. The USA can print more money if they are not afraid of inflation. Norway can sell more oil, which doesn’t cause inflation. Oil is thus better than a printing machine.

Australians already have some private debt which limits government’s ability to increase taxes, if a financial meltdown hits it. Current account is negative. It is an exporter of commodities (but not oil), thus a global meltdown would hit her hard.

]]> By: -jck http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2765 -jck Fri, 27 Mar 2009 14:45:10 +0000 http://www.aleablog.com/?p=2984#comment-2765 I am also very surprised at the Aussie position. I am also very surprised at the Aussie position.

]]> By: Steve L http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2764 Steve L Fri, 27 Mar 2009 14:32:34 +0000 http://www.aleablog.com/?p=2984#comment-2764 Thanks! 14th surprises me for a nation with a pre-funded retirement system, natural wealth in commodities, easily defensible borders and a relatively corruption-free legal system - but I'm too enamored with my book, I guess. Still, the same as the UK? Thanks! 14th surprises me for a nation with a pre-funded retirement system, natural wealth in commodities, easily defensible borders and a relatively corruption-free legal system – but I’m too enamored with my book, I guess. Still, the same as the UK?

]]> By: -jck http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2762 -jck Fri, 27 Mar 2009 02:32:56 +0000 http://www.aleablog.com/?p=2984#comment-2762 Australia is at 14th, same rating as the UK No CDS market for Canada for now, so no implied rating. Australia is at 14th, same rating as the UK
No CDS market for Canada for now, so no implied rating.

]]> By: Steve L http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2761 Steve L Fri, 27 Mar 2009 02:08:54 +0000 http://www.aleablog.com/?p=2984#comment-2761 Ouch! Where'd Australia and Canada come out? Ouch! Where’d Australia and Canada come out?

]]> By: -jck http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2758 -jck Thu, 26 Mar 2009 11:43:39 +0000 http://www.aleablog.com/?p=2984#comment-2758 If we were to go only by the hazard rate that's definitely not AAA, clear, but implied ratings should be derived from expected losses, not just hazard rates, so with a high recovery rate it could be AAA. this is a CMA proprietary model, so I don't know exactly how the rating is derived. If we were to go only by the hazard rate that’s definitely not AAA, clear, but implied ratings should be derived from expected losses, not just hazard rates, so with a high recovery rate it could be AAA.
this is a CMA proprietary model, so I don’t know exactly how the rating is derived.

]]> By: Mahalanobis http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2757 Mahalanobis Thu, 26 Mar 2009 10:38:38 +0000 http://www.aleablog.com/?p=2984#comment-2757 So how does this then justify a AAA rating? Higher recovery rate? So how does this then justify a AAA rating? Higher recovery rate?

]]> By: -jck http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2756 -jck Thu, 26 Mar 2009 10:06:48 +0000 http://www.aleablog.com/?p=2984#comment-2756 Yep, they are in %, i.e the probability of sovereign default occurring at any time over a 5 year period. NOT an annual hazard rate, that would be around 1.1% for the U.S. Yep, they are in %, i.e the probability of sovereign default occurring at any time over a 5 year period.
NOT an annual hazard rate, that would be around 1.1% for the U.S.

]]> By: Mahalanobis http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2755 Mahalanobis Thu, 26 Mar 2009 08:50:37 +0000 http://www.aleablog.com/?p=2984#comment-2755 Are you sure CPDs are stated in per cent (way too high) and not in bps (bit low?)? Are you sure CPDs are stated in per cent (way too high) and not in bps (bit low?)?

]]> By: -jck http://www.aleablog.com/the-world%e2%80%99s-safest-sovereign-debt/#comment-2754 -jck Thu, 26 Mar 2009 07:42:53 +0000 http://www.aleablog.com/?p=2984#comment-2754 the UK is 13th, implied rating AA+ the UK is 13th, implied rating AA+

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