Sovereign debt markets can suffer sudden stops in investor demand even without material changes in economic fundamentals.

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Where this collides

• Cannot both be true

  A government debt crisis is measurable and therefore visible well in advance; the diagnostic is mechanical rather than a matter of judgement.

  Blanchard says sovereign debt markets can suffer sudden stops without any material change in fundamentals. Dalio says the crisis is mechanical and shows itself well in advance. A stop that arrives with the fundamentals unchanged is precisely the case a mechanical diagnostic cannot see coming.

Shared subject first, then similar wording. They may agree or disagree.

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