CHAPTER 15Thinking Outside the Bubble: A Pairs Trade on the EU Experiment
Nothing tests the mettle of an idea like laying money down. It’s where cool calculation stands in stark contrast to sunshine pumping. People can talk all they want about how great Greek bonds are. If they’re really on board with the technocrats and think that the European Union (EU) is going to hold together as is, then long that 10-year Greek debt and short 10-year German Bunds. The trade shows the risks of the status quo more clearly than anything else.
The whole thing looks like picking up pennies in front of a steamroller, because buying cheap can be a fateful trap too. One needs faith that time will be on your side, and soon, and that the world’s tail-risk killers ...
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