Over the American thanksgiving holiday three years ago in 2009, the relatively small sovereign-linked debtor Dubai World announced it would suspend payments on its debt obligations. Dubai World was a state-owned conglomerate in the emirate of Dubai, part of the United Arab Emirates, and at that time, a locus of serious property overbuilding. This event had a butterfly effect in the debt markets as it caused a tumultuous correction in the pricing of sovereign risk that ushured in a sovereign debt crisis worldwide. Now some investors are talking about 2013 as if there will be another risk repricing. Here are my thoughts on this possibility.
Since 2008, when governments moved into overdrive to shore up the financial system after the collapse of Lehman Brothers, we have lived in a market unus...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.