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Nouriel Roubini Predicts a Crisis 'Worse' Than the 1970s

Odd Lots

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The Debt Crisis in the Private Sector

Interest rates for the public sector are going to rise. But then the private sector is spread over riskless rates, right? You have spread over treasury mortgages, high yield, high grade consumer loan and so on. So if you are a insolvent agent, it's not going to be just increasing long-term interest on treasury. It's going to increase your cost of servicing your debt. And already, high yield right now has gone from 300 to over 600. The entire CLL and leverage loan market right now is shut down, literally shut down. This is only the beginning of it, of debt stress on the private sector.

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