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Default in sentence

1154 examples of Default in a sentence

With virtually no usable macroeconomic tools, the default position is “structural reform.”
Interest rates will rise to compensate investors both for having to accept a larger share of government bonds in their portfolio and for an increasing risk that governments will be tempted to inflate away the value of their debts, or even default.
As debt mounts and the recession lingers, we are surely going to see a number of governments trying to lighten their load through financial repression, higher inflation, partial default, or a combinations of all three.
Two years into the crisis, the authorities have correctly identified four crucial problems – sovereign debt, bank capital, the risk of a Greek default, and deficient growth.
By contrast, developed country policymakers’ default stance seems to be that proactive or preemptive measures require a high degree of certainty, owing to a deep-seated belief that financial markets are stable and self-regulating.
The Derivatives Market’s Helpful EnemiesCHICAGO – The launch of two European antitrust investigations into the market for credit default swaps (CDS) might appear to be no more than a political vendetta against one of the alleged culprits behind the 2010 European sovereign-debt crisis.
Macroeconomic data from the United States improved; blue-chip companies in advanced economies remained highly profitable;China and emerging markets slowed only moderately; and the risk of a disorderly default and/or exit by some members of the eurozone declined.
While the US government would never explicitly default, it could adopt policies such as deducting income tax on interest payments, which would disadvantage foreign holders and depress the value of the bonds.
This need not mean outright default; a plan to repay principal and interest with low-interest securities rather than cash – or to withhold income tax on interest earned from government bonds, crediting those taxes against the obligations of American taxpayers – would achieve the same result.
But most of these policies – with the possible exception of the banking union – are aimed at managing default risk, not eliminating this risk’s root causes.
As public debt exceeded 60% of GDP -- inciting the credit rating agencies Standard & Poor's and Moody's to downgrade Brazil's bond rating -- many bankers began to fear a default.
Even in those states where mortgages are not “no recourse” loans, creditors generally do not pursue the assets or income of individuals who default.
Many homeowners who can afford to make their mortgage payments will choose to default, move to rental housing, and wait to purchase until house prices have declined further.
As homeowners with large negative equity default, the foreclosed homes contribute to the excess supply that drives prices down further.
In view of the Fed’s decidedly mixed track record since the Dodd-Frank reforms, some officials evidently regarded that default by Congress as a mandate to conduct business as usual.
The Germans should recall the last episode of widespread sovereign default – Latin America in the 1970’s.
That experience showed that countries default when the costs are lower than the benefits.
The costs of default depend on how messy things become when payments stop.
How long does default last before the country can reach an agreement with its creditors?
The benefits of default are the savings on future payments by the government – especially payments to non-residents, who cannot vote.
Countries that are near the point where “can’t pay” becomes “won’t pay” have high interest rates relative to benchmark “safe” debt issued by other governments, because even small shocks can shift the balance for decision-makers towards default.
But these interest-rate spreads make the benefits of non-payment greater, so the same shocks can send a country quickly into default.
Seen in these terms, it is clear why the German government’s proposed debt-restructuring mechanism immediately shifts weaker eurozone countries towards default.
As Chancellor Angela Merkel and her colleagues promote their well-defined plan – which comes in addition to a plan for bridge financing while in default – the cost of default falls.
Bond-market participants naturally turn now to calculating “recovery values” – what creditors will get if countries default today.
But a sovereign default would require a much larger bank bailout than in Greece, potentially leaving private debt almost worthless if official debt has seniority.
If people start to think this way, Portugal, whose already high and growing debt is held largely by non-residents, becomes a candidate for default as well.
And, if Spain is at serious risk of default, government solvency is at risk throughout the eurozone – except in Germany.
Perhaps Italy can survive, because most of its debt is held domestically, which makes default less likely.
A better approach would be to create a mechanism for orchestrating orderly sovereign default, both to minimize damage when crises do occur, and to discourage lenders from assuming that taxpayers’ money will solve all major problems.
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