Thursday, 18 June 2009

Pricing Armageddon

Prominent blogger Felix Salmon makes an interesting point in relation to the likelihood of another visit to the financial abyss in this article

My view, then, is that tail risk is as big as ever, and that world markets are in something of a state of denial about it. Maybe economic armageddon isn’t quite as terrifyingly incipient as it was in March. But it’s still a real possibility. And it isn’t priced in.

The real question is - If armageddon is not priced in, what price do you put on it?

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