Felix Salmon

The horrifying AAA debt-issuance chart

Felix Salmon
Jul 15, 2011 15:06 UTC

This is why I love FT Alphaville in general and Tracy Alloway in particular: she’ll dutifully read 14 pages into something entitled “The Basel Committee on Banking Supervision Joint Forum Report on Asset Securitisation Incentives” before coming across this chart and immediately realizing just how important it is.


I’ve put a bigger version here for people who want to pass it around in all its horrifying glory, but it’s also worth spelling things out, because it might not be immediately obvious.

The big-picture thing to remember when looking at this chart is something which I’ve said many times before — that it wasn’t an excess of greed and speculation which led to the financial crisis, but rather an excess of overcaution, with an attendant surge in demand for triple-A-rated bonds. On a micro level, triple-A securities are safer than any other securities. But on a macro level, they’re much more dangerous, precisely because they’re considered risk-free. They breed complacency and regulatory arbitrage, and they are a key ingredient in the cause of all big crises, which is leverage.

At the left-hand side of the chart we see that global issuance of triple-A bonds was more or less nonexistent back in the early 90s. All those Treasury bonds, all those agency securities from Fannie and Freddie, all that Japanese debt — add it all up, and it still comes to essentially zero by the standards of what seems normal today. Check out the left-hand y-axis: it goes up in $1 trillion increments. And we’re not talking stock, here, we’re talking flows: this chart is issuance per year.

(It’s pretty easy to see, looking at this chart, how a company like Pimco can find itself with over $1 trillion in assets under management: that’s now just a small fraction of the bonds issued each year.)

Now zoom back, and look at the chart as a whole: it’s going up and to the right, which says two things. Firstly, the amount of debt in the world is soaring. That’s a bad thing, because debt is much more systemically dangerous than equity. And secondly, the amount of triple-A debt in the world is soaring as well. Which is a worse thing, because triple-A debt is much more systemically dangerous than most other debt.

Then look at the green line. Triple-A debt wasn’t a huge part of the bond market back in the early 90s, but for the past decade it has invariably accounted for somewhere between 50% and 60% of total global fixed income issuance. That’s possibly the most horrifying bit of all: it simply defies credulity for anybody to be asked to believe that more than half the bonds issued in any given year are essentially free of any credit risk.

Finally, look at the way that the maroon bars — structured products, basically — have given way to a scarily large purple bar at the far right of the chart. That’s sovereign debt, and it tells you all you need to know about where the next crisis is likely to come from.

In a nutshell, triple-A debt is dangerous; there’s far too much of it; its growth seems out of control; and the triple-A problem has now become a sovereign-debt problem, in a world where sovereign-debt crises are the most damaging crises of all.

All that said, there are two things worth bearing in mind which make the chart slightly less horrific. The first is that for reasons I don’t understand, the chart ends in 2009, a crisis year when sovereigns pulled out all the stops in their attempt to prevent a global Depression. We’re more than halfway into 2011 at this point, there’s no good reason why the chart couldn’t include 2010 as well. And that might show 2009 as being a bit of an aberration. Does anybody have the numbers for total triple-A bond issuance in 2010, and how much of that was sovereign?

And secondly, any kind of debt-issuance chart is likely to go up and to the right to some extent, just because borrowing needs never go away, and old debt needs to get rolled over. The total stock of triple-A debt isn’t increasing by this many trillions of dollars per year, and it would be great to see a second chart of how much that is increasing, and how much of it is sovereign.

Still, flows matter. If sovereigns start being downgraded from triple-A status, debt is going to get a lot more expensive, and those rollovers — which cost very little in the current interest-rate environment — will really start to bite. And the invidious thing about debt is that it doesn’t go away. Deleveraging is painful, and is often accompanied by inflation or default. And the more debt you have to start with, the more painful deleveraging is going to be. Prepare yourselves.


KenG_CA, something is either AAA or not. Again AAA does not equal risk free nor does it mean there is no fluctuation in price before maturity. What percentage of AAA bonds have actually defaulted?

Posted by Danny_Black | Report as abusive

Chart of the day: Where does the mortgage-interest deduction go?

Felix Salmon
Jul 12, 2011 20:07 UTC

Check out page 44 of the Joint Committee on Taxation report on the way that household debt is treated for tax purposes. I’ve put the table into chart form, to make it easier to see what’s going on. Apologies for the rather weird y-axis on the chart: it’s serving a double purpose, counting total returns for the left-hand column and dollars for the right hand column. I would have done a dual axis, but I was having difficulty making that work in Excel.


In any event, the big picture here is clear. Households earning more than $200,000 a year account for less than 10% of the returns, but get 30% of all the benefits. And households earning more than $100,000 a year get 69% of all the benefit. The mortgage-interest deduction might be a middle-class tax break, but realistically it’s an upper-middle-class tax break.

The JCT is also very clear on the two separate ways in which it’s fundamentally unfair, benefiting owners at the expense of renters:

The deduction for home mortgage interest reduces the after-tax cost of financing and maintaining a home. Because the Federal income tax allows taxpayers to deduct mortgage interest from their taxable income, but does not allow them to deduct rental payments, there is a financial incentive to buy rather than rent a home. Taxpayers are also allowed to exclude gains from the sale of their principal residences of up to $500,000 from gross income. There is no such exclusion for other types of investments, further reinforcing the financial incentive to buy rather than rent a home.

Homeowners also receive preferential treatment under U.S. tax law because the imputed rental income on owner-occupied housing (that is, the cost of rent which the taxpayer avoids by owning and occupying a home) is not taxed. Consider two taxpayers: one rents a home at a $1,000 monthly rate, and the other owns a home which carries a $1,000 monthly mortgage. All else equal, a renter pays taxes on a measure of income that includes the $1,000 used to pay rent and the homeowner pays taxes on a measure of income that does not include that same $1,000. If imputed rental income were included in income, it would be appropriate to allow a deduction for mortgage interest, property taxes, and depreciation as costs of earning that income. Because tax law allows taxpayers to deduct mortgage interest and property taxes to determine their taxable income but does not tax imputed rental income or allow them to deduct rental payment, it creates the incentive to buy rather than rent a home and to finance the acquisition with debt.

The mortgage-interest deduction should be abolished, of course — it’s a dreadful piece of public policy. Homeownership, especially during times of high unemployment, does more harm than good, and there’s not even any real evidence that the deduction actually increases homeownership, rather than just artificially making houses more expensive to buy.

But if we’re not going to abolish the mortgage-interest deduction, I like the idea that homeowners should be taxed on their imputed rental income. Think about it this way: I can give you a house, or I can give you the money to buy that house, or I can give you an income stream to pay the rent on that house. The tax consequences of the three are very different, and the last one is the worst: you have to pay income tax on the income stream, leaving you with less money for rent. But if you own a house, and get lots of valuable benefit from it every month, you don’t need to pay any tax on that benefit at all.

More realistically, however, we should just look at the $80 billion a year we’re spending on the mortgage-interest deduction and ask ourselves (a) whether we can afford it, and (b) whether it’s really the best possible way in which we could be spending $80 billion a year. The answer to both questions is clearly no. Especially since that money is going overwhelmingly to the richest households in America.


Whoops didn’t get to finish.
Allow only one home deduction and require it to be a house or condo – forget the houseboat, yacht or big sailing vessel interest deduction. If they can afford those they can afford not having the deduction. Some folks buy fishing boats that cost more than some of the boats with a bunk, a kerosene stove and a chemical john and they cannot deduct the interest on them.

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More data on mortgage delinquency and downpayments

Felix Salmon
Jul 12, 2011 18:05 UTC

Last month, in a post headlined “how the mortgage industry lies with statistics,” I bemoaned the fact that I couldn’t find good real data to compare to the massaged data which went into this chart.


What this chart purports to show is that if you’re writing qualified mortgages, the default rate is low whatever the downpayment; it’s the non-qualified mortgages which see enormous default rates above 15%.

But now Glenn Costello of the Kroll Bond Rating Agency has taken the same data from CoreLogic and crunched it for me in exactly the way I requested of Anthony Guarino, the man who put the above chart together. And if you look at the data in a non-massaged way, it looks very different indeed:


The first thing to note is that all of the bars on this chart apply to qualified mortgages: the unqualified ones aren’t even included. And yet the y axis goes much higher than the official mortgage industry’s chart — one of the bars reaches a whopping 40%, about which more in a minute.

The greenish bars, on this chart, are all the mortgages with downpayments of 20% or more, broken down into three groups: downpayments of 20-25%; 25-30%; and more than 30%. (The chart actually shows LTV, or loan-to-value, which is the opposite of a downpayment: to get the downpayment, you subtract the LTV from 100.)

The worst performance for this group happened in 2006, for mortgages with a 20-25% downpayment: they ended up with a delinquency rate of 10.3%. That’s very high, and that single datapoint alone would suffice to show that the 20% downpayment level isn’t a guarantee of safety when it comes to mortgages.

But just look what happens when you compare the mortgages with a 20-25% downpayment to the mortgages with a 15-20% downpayment. Now we’re looking at the bluish bars — they range from 15-20% downpayments all the way to 3-5% downpayments. But for the time being, just look at the lightest blue bar and compare it to the darkest green bar. That’s where the 20% downpayment dividing line happens, and the difference is stark.

In 2002, 6.6% of mortgages with a 15-20% downpayment ended up in delinquency, compared to just 1.5% of mortgages with a 20-25% downpayment. That’s an increase of 340%. In 2003, the numbers are 5.7% and 1.8%; in 2004 they’re 8.0% and 3.5%; in 2005 they’re 13.3% and 8.3%; in 2006 they’re 21.2% and 10.3%; and in 2007 they’re 15.7% and 6.4%. In every case, the gap is huge; in 2006, it’s in double digits.

Remember, we’re talking about qualified mortgages here — the ones the mortgage industry claims are so safe that banks should be allowed to sell all of them off without keeping any skin in the game. All of these mortgages came with mortgage insurance, for instance. And now check out that tall bar from 2007: if you took out a qualified mortgage, that year, with a downpayment of between 3% and 5%, then you had a 40% chance of ending up in delinquency. There was clearly nothing safe about those mortgages at all; even the mortgages with no money down at all did better. (The final maroon bar shows mortgages with 0-3% down.)

The contrast with the official chart could hardly be starker. Let’s look at 2007. According to the mortgage industry, the worst performance seen in the qualified-mortgage universe was a delinquency rate of 6.3%, for loans with 5% or more in downpayment. The truth is that loans with 5-10% down in 2007 saw a delinquency rate of 25%. And you have to get up to a downpayment of 25-30% before you see a delinquency rate of less than 6.3%.

So let’s all remember this chart, the next time anybody claims that you can have a safe mortgage with a low downpayment. Because the fact is that you can’t.


This is a rather illegitimate view of the data as lending can never be safe once unsafe lending has inflated asset prices beyond all value. Allow unqualified lending and even qualified lending is a rather meaningless term. The real question is, if only qualified lending were allowed, how overvalued might housing have gotten and the answer is not much, but allowing unqualified lending can always raise prices above any margin of safety, even 20%.

Posted by MyLord | Report as abusive

How the mortgage industry lies with statistics

Felix Salmon
Jun 23, 2011 22:51 UTC

Yesterday something calling itself the Coalition for Sensible Housing policy put out a dense 13-page white paper entitled “Proposed Qualified Residential Mortgage Definition Harms Creditworthy Borrowers While Frustrating Housing Recovery”.

It’s all part of the lobbying campaign surrounding Dodd-Frank, and the eminently sensible idea that if a bank wants to securitize a bunch of mortgages, it has to keep at least 5% of those mortgages for itself. Somehow, in the course of putting Dodd-Frank together, an exception was carved out to that rule, called the Qualified Residential Mortgage, or QRM. For the small group of the most copper-bottomed mortgages, banks could sell off the whole lot, without having to retain 5%.

This gave the mortgage lobby an opening, and they’re attacking it aggressively. They want to open the QRM loophole as wide as possible, and are now kicking up a very loud fuss, complaining that consumers will be damaged if they can’t get access to a QRM loan. The main part of the QRM qualification that they’re upset about is the requirement for a significant downpayment, and so a central part of the lobby’s argument is that if you’re underwriting loans properly, increasing the downpayment doesn’t have much of an impact on delinquency rates. There’s other bits to the argument, too, such as the idea that non-QRM mortgages are going to be much more expensive, but for this post I’m just going to concentrate on the downpayment question.

The white paper explains — in bold type, on page 5 — that “boosting down payments in 5 percent increments has only a negligible impact on default rates”. It continues:

As shown in Table 3 (and in Attachment 2), moving from a 5 percent to a 10 percent down payment requirement on loans that already meet the defined QRM standard reduces the overall default experience by an average of only two- or three-tenths of one percent for each cohort year.

Of course, there are charts and tables. The table comes first:


This is so misleading and confusing that I’ve spent a large chunk of the past 24 hours trying to work out what on earth it’s actually saying, and where the data comes from. The raw data here is indeed being sourced from CoreLogic, and a company called Vertical Capital Solutions did analyze that data, in February 2010. The Vertical Capital report did not, however, have any of the information in this table. Indeed (and inconveniently, from the mortgage lobby’s point of view), it had a whole page which talks about how qualified loans have “substantially higher Delinquencies and Defaults on Qualified Loans with a LTV >80″. (Loan-to-value, or LTV, is the converse of the downpayment: the downpayment and the loan combined are 100% of the loan, since qualified mortgages by definition exclude piggyback loans were second mortgages are involved.)

What the Vertical Capital report does have is a chart of delinquency rates on qualified loans where the LTV is less than 80%, on page 7, and another chart where the LTV is more than 80%, on page 8. Put the two together, and you get something like this:


The difference in delinquency rates between the low-downpayment loans and the high-downpayment loans, here, ranges from 2.94 percentage points for the 2008 vintage, to 7.15 percentage points in 2006. Clearly much bigger differences than are implied in the white paper’s table. And if you look at the percentage increase in delinquency, it’s enormous: all of the delinquency rates more than double, with the lowest increase being 101% in 2006 and the highest being an amazing 502% in 2002.

The mortgage lobby’s own chart, of course, looks very different indeed. Here it is, from page 12 of the white paper:


What this chart purports to show is that non-qualified loans — the red bars — have very high delinquency rates, while qualified loans — the purple, green, and blue bars — have much lower and pretty similar delinquency rates, regardless of the downpayments they use.

But look more carefully. The non-qualified delinquency rates include all delinquencies for all non-qualified loans. But the qualified delinquency rates are not directly comparable, because all of them specifically exclude qualified mortgages with a downpayment of less than 5%.

I spent some time today talking to the man who put this chart together. (It’s sourced to Vertical Capital, but in fact these numbers came from Genworth’s own analysis of CoreLogic’s data, and Vertical Capital did none of this work.) His name is Anthony Guarino, and he’s the vice president of public policy at Genworth mortgage insurance — the company which initially commissioned the Vertical Capital report. I asked him, if he was showing the delinquency rates for all non-qualified loans, why wouldn’t he show the delinquency rates for all qualified loans? Well, he said, “the consortium didn’t want to even talk about zero downpayment mortgages. Why would we even show that? We’d lose credibility if we showed a qualified loan with no downpayment.”

Guarino was perfectly happy to tell me that by excluding all the loans with downpayments of less than 5%, “you’re throwing out the loans with the higher default rates. No one’s saying that downpayment doesn’t matter.” But compare that with the official tone of the white paper:

Based on data from CoreLogic Inc., nearly 25 million current homeowners would be denied access to a lower rate QRM to refinance their home because they do not currently have 25 percent equity in their homes… Even with a 5 percent minimum equity standard, almost 14 million existing homeowners – many undoubtedly with solid credit records – will be unable to obtain a QRM. In short, the proposed rule moves creditworthy, responsible homeowners into the higher cost non-QRM market.

This sounds very much as though even a 5% minimum downpayment is desperately unfair to millions of American homeowners; there’s no indication whatsoever, in the paper, that including a minimum downpayment of 5% in the definition of what constitutes a qualified mortgage might actually be a good idea. Yet when the consortium wants to publish a chart showing the delinquency rates of qualified mortgages, it’s very careful to first strip out any mortgages with a downpayment of less than 5%.

On top of that, the bars in the official chart all look very similar largely because they are very similar: the industry is essentially comparing a set of loans with itself, and declaring that there’s not a lot of difference. The purple bar is all the loans with a downpayment of more than 5%; the green bar is all the loans with a downpayment of more than 10%; and the blue bar is all the loans with a downpayment of more than 20%. The blue bar is a subset of the green bar, which in turn is a subset of the purple bar. The chart is designed, in other words, to look at similarities rather then differences.

I asked Guarino if he could send me the data sliced more naturally: how do loans with a downpayment of less than 5%, for instance, compare to loans with a downpayment of between 5% and 10%? To his credit, he did come back to me with some new data, even if it wasn’t exactly what I asked for: he refused to slice the loan tranches by year, as he did in this graph. Instead, he would only give me aggregate figures, for 2002-2008 and for 2002-2004. Here’s what they look like, charted:


When the mortgage industry starts complaining about the 14 million people who would be denied the chance to buy a qualified mortgage if they don’t have a 5% downpayment, it’s worth remembering that qualified mortgages for people who don’t have a 5% downpayment have a delinquency rate of 16% over the course of the whole housing cycle. (You can be sure the numbers were much higher still in 2006 and 2007, which is why Guarino didn’t give them to me.)

And you can see too why the 20% downpayment limit was put in place: it’s the point at which delinquencies fall to less than 5%. If you take one group of loans with a 20-25% downpayment, and a second group of loans with a 15-20% downpayment, then the second group, on these numbers will have a delinquency rate 56% higher than the first.

The big picture here is that QRM is a distraction, which really shouldn’t exist in the first place. But given that it does exist, the downpayment requirements embedded within it are perfectly sensible. The lower the downpayment, the more likely a loan is to become delinquent. By far. That’s a simple fact which the mortgage lobby will go to astonishing lengths to hide.

Update: Guarino responds in the comments.


Choosing the right mortgage should be based on your capacity to pay on time and you to choose a good mortgage is very important since this is a long term commitment. Make sure you find a mortgage service with small interest rates. If you want to find a simple service that will find the lower rates for you I recommend
Reverse Mortgage Lenders Direct. Com

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Chart of the day, auction-house market share edition

Felix Salmon
Jun 22, 2011 20:29 UTC

Randy Kennedy has a bullish article on Artnet’s nascent art-auction business, which is doing better the second time round than it did the first time round, but which is still tiny. I’m skeptical: value in the art world is very much reliant upon the institutional authority of auction houses and galleries, and Artnet’s auction system is designed to strip out all of that information. It can work for fungible editioned works of relatively modest value, but I do think that most collectors are always going to want a bit more hand-holding before buying art, not to mention the opportunity to actually see the art object before buying it.

That said, the decline of the Sotheby’s and Christie’s duopoly is real, and this is a great opportunity for Artnet or anybody else to try to make a name in a new world with many more players. Here’s some data which Artnet pulled for me, showing total global auction sales, split between the duopoly and everybody else. While sales totals rise and fall, the one constant is the decline of the big guys’ market share:


Next year, it’s more likely than not that Sotheby’s and Christie’s between them will have less than half the global auction market for fine art (which is the data used for this chart). A large part of this is the rise of China, which has hundreds if not thousands of auction houses, and where the big two have very small market share. But even outside China I think that Sotheby’s and Christie’s are both vulnerable, in theory, to lighter-weight business models like Artnet’s auctions or art.sy or the VIP Art Fair. Many of them will fail — but some will succeed. The big two will be faced with a tough choice: do they compete directly with the new entrants, or do they protect their own high-margin core business?


Some outstanding Fine Art is being sold on collective websites such as The Curator’s Eye (www.curatorseye.com).

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The new normal is kicking the can

Felix Salmon
Jun 14, 2011 20:31 UTC

Michael McDonough has this wonderful chart:


Clearly the “new normal” meme is on the decline, and equally clearly “kicking the can” is developing a life of its own, having won the battle of minds against the cutesy rhyming phrases (“extend and pretend,” “delay and pray,” “fake it till you make it”).

I prefer “kicking the can” to “new normal,” on the grounds that it actually contains the tiniest morsel of actual meaning. But still, the cliché has definitely reached the annoying stage at this point. Any suggestions for what is going to supplant it, once it begins its inevitable decline?

Update: Jim Ledbetter informs me that Kick the Can is a popular US children’s game, which has nothing to do with its economic meaning. If it’s not the game which is the source of the phrase, where and when and how did people start talking about “kicking the can down the road”? Is that something people do? And what’s in the can?


Kicking a can as you walked was also practised by kids in my suburban Philadelphia neighborhood. I think it is a fairly universal bored-kids game.

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Chart of the day, income-inequality edition

Felix Salmon
Jun 7, 2011 13:57 UTC

If you want to waste a bunch of time this morning, I can highly recommend playing around with the World Top Incomes Database. Click on “Graphics,” and knock yourself out — the database has a wealth of information, going all the way back to the 19th century, and creates lovely charts on the fly; it will even export them in .png format for you.

Here’s one I just put together, showing how in 1994 the top 0.5% of the US population started raking in a greater share of total income than the top 1% of the German population — and how the top 1% in the US are seeing their proportion of total income rise dramatically, even as their German counterparts are seeing their share of total income shrink.


In any case, do play around, it’s a fantastic resource with a massive database behind it. Thanks to Barry for the pointer!


Perhaps this would explain it?

http://www.taxpolicycenter.org/publicati ons/url.cfm?ID=1000588
“For example, from 1982 to 1986, 60 percent of long-term capital gains were excluded from tax.”

If you switch from reporting 40% to reporting 100%, then the reported income would jump dramatically. No?

Of course there were a few other changes to the tax law in 1986. I’ve really never dealt with the federal income tax in its prior incarnations. You have. So tell me, what else changed? Any restrictions on tax shelters put into place?

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Chart of the day: When U.S. companies IPO abroad

Felix Salmon
May 27, 2011 03:58 UTC

As I secretly hoped that he might, Guan came to the rescue and provided me with exactly what I was looking for — and with Thomson Reuters data, no less! (It comes from SDC Platinum, I should probably befriend someone there.) I wanted a chart of the ratio of foreign IPOs to domestic ones, for U.S. companies, on a rolling five-year basis, to see whether the current level around 10% constitutes a big spike upwards. And the answer is that yes, it does:


Guan cautions that the data from before 1980 or so might not be particularly reliable, since it’s hard to know when a U.S. company lists abroad unless you’re a truly global company. But that doesn’t really matter: the proportion of IPOs of U.S. companies which took place abroad only cracked 2% for the first time in 1999. It stayed between 1% and 2.5% all the way from 1998 through 2004, and then it suddenly started spiking: 7.1% in 2005, 8.4% in 2006, 9.3% in 2007, and a whopping 15.7% in 2008, when 6 companies had IPOs abroad and only 38 managed the feat domestically.

On an absolute rather than percentage level, the record year was 2007, when there were 24 foreign IPOs; there’s a three-way tie for second place, with 17 foreign IPOs in each of 1999, 2005, and 2006.

In any case, the thick blue line is what I was looking for, and it’s going up and to the right about as fast as any five-year moving average is ever likely to.

My next project, which maybe I can find someone at SDC Platinum to help me with, is to have a look at all those U.S. companies which had an IPO abroad — there are 157 of them, altogether — and work out how many of them ended up getting a fully-fledged US listing. Could a listing on, say, London’s AIM end up being a reasonably common bunny slope for U.S. companies which want a cheaper and gentler introduction to the world of being public than a major listing on the New York Stock Exchange?


FYI, the image doesn’t show up in firefox, only the .png file name.

Posted by Anchard | Report as abusive

Chart of the day, sovereign credit spreads edition

Felix Salmon
May 18, 2011 20:43 UTC

Remember the Pimco chart which showed emerging countries trading through the G7? Turns out it was a mistake: Pimco was using the SovX Western Europe index, and not the SovX G7 index that it referenced in the relevant footnote.

The Western Europe index includes all of the PIIGS, including Greece, so it’s hardly surprising that it’s trading pretty wide right now. But in fact, if you look at Markit’s official numbers, it’s not trading quite as wide as the emerging-markets index:


How come Markit has the WE index trading tight to EM, while Pimco has the indices the other way around? The answer is pretty technical: the official Markit indices only go back to 2009, while Pimco wanted data going back to 2003. So Pimco put together their own proxy for the indices, which is simply the arithmetic average of the various components in the index. The actual Markit methodology, by contrast, is a bit more complicated: the components are weighted by present value.

Where does this leave Pimco’s thesis? The original chart showed the spread between emerging and advanced economies, and it’s fair to consider all of western Europe to be advanced economies. So the big picture there is absolutely right. But if you just look at the spread between emerging economies and the safest G7 bonds, the movement there is far less dramatic:


There’s much less risk between emerging-market nations and the safest and richest sovereigns in the world than there used to be. But there’s still a significant spread there, of well over 100bp. (It was actually 137bp yesterday.) There’s probably no such thing as a risk-free asset any more. But if you’re looking for something close, you’re still better off in the G7 than you are in the emerging markets.


-Save Soviet Jewelry!
-Excuse me, Miss Litella, but that’s Soviet Jewry, not Jewelry.
- Never Mind.

In memory of Gilda Radner.

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