Michael Platt the founder of the $30B hedge fund BlueCrest was on Bloomberg today. It was a very interesting interview. He talks about the potential for a Euro zone breakup. They dont see anything at the policy level that gives them confidence that the overleveraged nations won't default. According to him, if Italy has to pay rates between 5% - 7% the situation is unsustainable. He thinks the market is steadily increasing the odds of a Euro zone breakup and going forward it will only get worse. He thinks most of the banks in Europe are insolvent if they took on mark-to-market practices simliar to what hedge funds are forced to do. He advocates buying US Treasuries and German Bunds. He is sticking with the short end of the maturity curve. He thinks we are on the eve of a potential crash that could be worse than 2008. Overall it is very interesting and worth watching the 14 minute interview.
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