2013 risk repricing to be feared since last one in 2009 caused sovereign debt crisis

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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