Tokyo Picker

It's Time for the Fed to Get Serious - Barron's

The first thing to do is to allow a couple more A-list defaults to capture the value in synthetic CDOs largely owned by Equropean public sector investors. Once US FIs have harvested that, the Fed should recognize that there are a lot of bonds that are implicitly guaranteed by the US under the "too big to fail" doctrine and capture the value of the spreads on those bonds by buying them and selling equivalent maturity Treasuries. Otherwise investors are getting overpaid for US risk.