2 ms·

https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://pages.stern.nyu.edu/~adamodar/New_Home_

https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...

loeg 10mo ago
> The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt. Sort of definitionally, nothing in that list is going to be more politically stable than the US. In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. Setting aside the practicality of these recommendations (how much debt does Liechtenstein issue? or Germany, for that matter?): in a world where the US is unstable, it's hard to imagine Canada being risk-free.
- epgui 10mo ago
  Nothing is risk-free. But Canada is certainly more politically stable than the US.
  - vkou 10mo ago
    Canada is more internally stable, but is less externally stable, given that invasion and occupation is on the table. Canada needs to pursue further armament (Carney is pursuing a doubling of its defense budget) and training in asymmetrical warfare.
  - loeg 10mo ago
    What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibble with "certainly" and "more" politically stable as compared with the US.
    - toomuchtodo 10mo ago
      Canada will not invade allies and will adhere to the rule of law. Their forward looking economics are more favorable as they strengthen ties with China and Europe. By decoupling from the US, their economic risk declines, and their sovereign debt risk is downstream of that.
      - AnimalMuppet 10mo ago
        Under current conditions, though, they may be invaded and/or annexed. That's a risk.
        overfeed 10mo ago
        That's one way to invite asymmetric warfare[1] on the mainland - the border with Canada is something that mostly exists on maps. 1. As recently wargamed by the Canadian military.
        ben_w 10mo ago
        I'm remembering an old painting, and briefly wondered if we'd see a repeat: https://en.wikipedia.org/wiki/File:The_President%27s_House_by_George_Munger%2C_1814-1815_-_Crop.jpg https://en.wikipedia.org/wiki/File:The_President%27s_House_b... Then I remembered the building works, and thought "If it happened, how would anyone even notice?"
        epgui 10mo ago
        This has nothing to do with Canada's political stability.
    - gambiting 10mo ago
      >>especially in the hypothetical scenario where the US is unstable? How does it feel to bury your head in the sand so hard that you can't see what's happening around you?
      - 10mo ago
  - CamperBob2 10mo ago
    All historically-stable Western nations seem to be subject to the same influences that brought us Trump, though. They (we) are all under attack.
abdullahkhalids 10mo ago
On the first page, I see 9 countries which it claims have a default risk of 50% or higher in the next 5 years. Which means a probability of at least 1-0.5^9=0.998 that at least one of them will default. That's a crazily high confidence prediction. What is their track record? What did they predict 5 years ago and how did those predictions bear out?
- loeg 10mo ago
  To be clear, those countries are: Argentina, Belarus, Ghana, Pakistan, Russia, Sri Lanka, Tunisia, Ukraine, and Venezuela. It would not be shocking if any of those countries defaulted. Also: your math assumes events are independent, but at least the Belarus/Russia/Ukraine events are probably not independent. Edit: whoops, CFR only gives Russia a 9/10 score, not the full 10/10 score of 50% default probability.

loeg 10mo ago

> The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt. Sort of definitionally, nothing in that list is going to be more politically stable than the US. In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. Setting aside the practicality of these recommendations (how much debt does Liechtenstein issue? or Germany, for that matter?): in a world where the US is unstable, it's hard to imagine Canada being risk-free.

epgui 10mo ago
Nothing is risk-free. But Canada is certainly more politically stable than the US.
- vkou 10mo ago
  Canada is more internally stable, but is less externally stable, given that invasion and occupation is on the table. Canada needs to pursue further armament (Carney is pursuing a doubling of its defense budget) and training in asymmetrical warfare.
- loeg 10mo ago
  What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibble with "certainly" and "more" politically stable as compared with the US.
  - toomuchtodo 10mo ago
    Canada will not invade allies and will adhere to the rule of law. Their forward looking economics are more favorable as they strengthen ties with China and Europe. By decoupling from the US, their economic risk declines, and their sovereign debt risk is downstream of that.
    - AnimalMuppet 10mo ago
      Under current conditions, though, they may be invaded and/or annexed. That's a risk.
      - overfeed 10mo ago
        That's one way to invite asymmetric warfare[1] on the mainland - the border with Canada is something that mostly exists on maps. 1. As recently wargamed by the Canadian military.
        ben_w 10mo ago
        I'm remembering an old painting, and briefly wondered if we'd see a repeat: https://en.wikipedia.org/wiki/File:The_President%27s_House_by_George_Munger%2C_1814-1815_-_Crop.jpg https://en.wikipedia.org/wiki/File:The_President%27s_House_b... Then I remembered the building works, and thought "If it happened, how would anyone even notice?"
      - epgui 10mo ago
        This has nothing to do with Canada's political stability.
  - gambiting 10mo ago
    >>especially in the hypothetical scenario where the US is unstable? How does it feel to bury your head in the sand so hard that you can't see what's happening around you?
    - 10mo ago
- CamperBob2 10mo ago
  All historically-stable Western nations seem to be subject to the same influences that brought us Trump, though. They (we) are all under attack.

abdullahkhalids 10mo ago

On the first page, I see 9 countries which it claims have a default risk of 50% or higher in the next 5 years. Which means a probability of at least 1-0.5^9=0.998 that at least one of them will default. That's a crazily high confidence prediction. What is their track record? What did they predict 5 years ago and how did those predictions bear out?

loeg 10mo ago
To be clear, those countries are: Argentina, Belarus, Ghana, Pakistan, Russia, Sri Lanka, Tunisia, Ukraine, and Venezuela. It would not be shocking if any of those countries defaulted. Also: your math assumes events are independent, but at least the Belarus/Russia/Ukraine events are probably not independent. Edit: whoops, CFR only gives Russia a 9/10 score, not the full 10/10 score of 50% default probability.