Saturday, December 06, 2008

CDSes on Treasuries have quintupled in cost, but -- as any student of political science would tell you -- the United States Government could not default on its debt without overturning Marbury versus Madison. That is to say, that even as interest rates are falling, the CDS markets are suggesting a bimodal distribution where the most likely outcome is grinding dull penury, but the possibility of a wild constitutional collapse is skyrocketing.

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1 Comments:

Blogger Richard Ryan said...

CDSes on Treasuries have quintupled in cost, but -- as any student of political science would tell you -- the United States Government could not default on its debt without overturning Marbury versus Madison.

This is an interesting point that is worthy of elaboration...

2:56 PM  

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