The Crimsonic Whatever Solves The Debt Crisis
January 16, 2013 2 Comments
Matt Levine of Dealbreaker went and researched my half-baked ignoramus super-coupon-bond idea to solve the Debt Ceiling Crisis™ and came back to report that…it could maybe work? What? Did not expect that.
Hey, if that could fly, I’ve got more of ‘em: US Treasury sells bonds packaged with (long-protection) levered-super-senior credit insurance. US Treasury sells bonds overlaid with S&P puts. Heck, US Treasury just sells annuities (i.e., just creates & sells naked IO STRIPS directly, I guess). Take that, “debt ceiling”: no limit whatsoever on that last one! (I guess!)
Stop me when this gets absurd. I expected to be stopped well before this so I’m really playing with house money here.