re: Update pg 23: Russia,IMO, will default on its sovereign debt within six months

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Do you believe Russia's sovereign financial condition is transparent to the markets? Yes or no.

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I believe it's more transparent to Goldman or BNP than it is to the rest of us and they have real money in the game.

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I vote no. Russia's sovereign debt was rated investment grade in 1998 when it defaulted on its debt. I wonder why the markets got that so wrong??

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Where was it trading before it defaulted? Ratings are now irrelevant. The only thing that matters is where things trade.

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If you believe Russia is a safe and sound investment then by all means, put your money where your mouth is.

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All I believe is that your prediction is vastly out of phase with a global trading market, so I'm curious what extra information you have.

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Investing either for or against Russia's financial condition is speculative, at best. I don't do speculative.

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Right. But let's pretend you had access to the CDS market; purchasing a 5-year option on Russia defaulting would only cost you 2.8%/year of whichever amount you wanted to bet, versus your expectation of 100% chance of default in just the first year alone! From your vantage point, it's an extraordinarily cheap lottery ticket.

Either you know some actual information that global financial institutions with deep relationships in that country don't know or you don't actually believe it's 100% chance they will default. I'm assuming it's the latter.