MS Poll: 53% Believe US Debt Crisis By 2012

An interesting chart from the Business Insider of the results of a Morgan Stanley survey of 150 clients at a recent investment conference.   Shockingly, more than 50% of the investors polled believe the US will experience a sovereign debt crisis by 2012.

This is the one issue that keeps us up most at night.   The yield on the 10-year Treasury closed at 2.47% today,  so clearly the market is not pricing this.   We have written that the bond yield is not a reflection of fundamental value and is distorted by various technical factors.  Policy makers must not be lulled into complacency thinking the low yields are a vote of confidence in fiscal policy.

One thing we have learned during this crisis is that markets are prone to doublethink and can live, simultaneously,  in two different realitiesStay tuned.



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This entry was posted in Black Swan Watch, Bonds, Credit, Monetary Policy, News, Policy, Politics, Sovereign Risk and tagged , , , . Bookmark the permalink.

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