I'd imagine it's too soon for people to have forgotten this, but maybe there's a similar opportunity with Sovereign Debt swaps?
I read in today's WSJ (along with millions of other people) about how large institutional banks are taking out CDS against their sovereign Euro-trash debt... and the counter party risk involved because the person writing the Swap might not be able to cover it, in the event of systemic failure.
I wonder if this is another Big Short opportunity? EU falls, all the CDS default, all the banks fail, pension funds wiped out.
Then again, considering how severe this would be, I imagine no governments could let it happen. It would lead to a global recession lasting decades.
I'm glad to be in the PP and not have to "worry" about it. But it is fun to think about and discuss
