Kyle Bass is still waiting for the first cluster of defaults and argues that Japan's fiscal position continues to deteriorate.
"The Eurocrats know full-well that they don't have any spare capital to recapitalize their entire banking system in a post-default world, nor to adequately recapitalize them pre-default. Instead, EU member nations know that they will be required to print money in order to re-capitalize their systems. The $18 trillion dollar (total credit market of European periphery according to the IMF) question for the EMU periphery is: Should they (National Central Banks or the ECB) print before or after a default? We think they print post-default as they come to the realization that printing pre-default without addressing the toxic debt problem would rewind the clocks back to the days of Von Havenstein and then you-know-who."