8/20/11

All the banks who bet against sub prime mortgages by buying credit default swaps CDS for short made a ton of money by betting against the failure of the housing market. I see the same thing happening in Europe and the United States of America. But since America has much bigger odds I bet I can make a fortune if I bet against it.

Everything about America looks just like the housing market and sub prime loans before the collapse in 2008. We are at a crossroads right now like we were in 2007 before the bubble burst. But the national debt bubble is much bigger and America is so much bigger than that housing market.

Right now everyone is happy about the debt ceiling which is perfect for betting against America. Obama believes in spending out of a recession and he wants to expand welfare programs. He wants to pass out Dream Acts while he dismantles the immigration laws. He is spending like a drunken sailor with 15 credit cards. He is encouraging every program that will cause the debt bubble to burst.

Mark my word the bubble will burst and I want to cash in on it. Is there insurance against US Treasury bills? Something like a credit default swap.

Comments (6)

8/20/11
http://www.jasonbondpicks.com
8/20/11

the national debt bubble is so much bigger than the housing market

that's nowhere near a good way to forecast the value of CDS on gov debt. Size is not what's important- it's debt serviceability. With housing prices falling and incomes decreasing (or being lost) mortgage debt serviceability was over. Gov debt serviceability, however, is much better depending on your predictions of nominal GDP rate (proxy for gov revenue), inflation rate and discretionary spending rate...

DS rate is likely going to be stable due to the austere 2011 budget control act and the overall conservative strength on the bipartisan committee. This, along with reasonable assumptions for GDP and inflation, I made these rough calculations on my blog (see chart): http://tinyurl.com/3wuu9vm

This indicates that possibly the largest factor to look at when considering debt sustainability is the unemployment rate- everything else- inflation, GDP, the need for government spending- emanates from it! Yet your "analysis" doesn't even mention thew word.

Obama believes in spending out of a recession and he wants to expand welfare programs. He wants to pass out Dream Acts while he dismantles the immigration laws. He is spending like a drunken sailor with 15 credit cards. He is encouraging every program that will cause the debt bubble to burst.

This is just wrong and just sounds like Fox News talking points. If you want to advance republican agendas to keep your bonus tax rates down- fine. But its not acurate for making professional investment decisions.

Mark my word the bubble will burst and I want to cash in on it. Is there insurance against US Treasury bills? Something like a credit default swap.

No thanks.
But to answer your question, I don't believe that there are indexes traded on exchanges that directly track the value of CDS on US sovereign debt. My guess is this has to do with too-low liquidity in this OTC market (something very understandable to me). However, a close alternative is CDS on US corporations (for obvious reasons they would run ahead of sovereign debt CDS values for their respective country). Your options include indexes from Markit (CDX) and S&P.

8/20/11
8/20/11

http://www.intrade.com/v4/home/

Bid-ask spread on Rick Perry becoming President is $.09 right now.

Go Blastoise! Use arbitrage!

8/22/11

Good troll blastoise. You has the perfect mix of ignorance/info in this post to make the troll subtle enough to be effective.

Also you can tell that the the guys who responded don't read the site often because they would know that you know a shitload about finance and wouldnt ask this question.

Excellent overall troll.

In reply to Seigniorage
8/22/11

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