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The danger of default would disappear and so would the risk premiums.
Credit derivatives have made it easier to separate the credit risk (the danger of default) of bonds from the interest rate risk.
And, after the recent EU summit agreed on an "ultima ratio" rescue plan for eurozone countries facing the danger of default, chances are high that it will not materialise.
It is common to hear Republicans pooh-pooh the danger of default by saying that the Treasury has much more cash coming in from tax withholding on a monthly basis than it owes bondholders.
He turned a profit of over $50m for his fund and his clients buying Italy's lira bonds in the early 1990s, when prominent economists flagged the danger of default.
For every commentator wringing his hands over the danger of default, another accuses the "liberals" of crying wolf.Seventh, the listless state of the economy makes it hard for politicians of both parties to do the hard things that are needed to reduce the deficit.
Similar(47)
"The member states, by transferring their right to print money to the European Central Bank, effectively exposed themselves to the danger of defaulting on their government debt," Mr. Soros explained.
So why expect them to believe expert warnings about the dangers of default?
No one worried much about the dangers of default because ownership of mortgage debt kept changing hands.
Representative Joe Walsh, a freshman from Illinois, recorded an instantly notorious video in which he accused President Obama of "lying" about the dangers of default.
But economists say the dangers of default are real, with ramifications ranging from slowing the economy to making mortgages and car loans more expensive.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com