As a writer and press contact news peddler, I’m not qualified to argue with the doomsday analysis pushed forth on Calculated Risk during the past few days. But years of listening to executives at financial services companies and funds give interviews to reporters ensures I can come pretty close to understanding it.

Today’s installment continued the series’ focus on the potential for sovereign debt. Specifically, it covers the likelihood of massive, debilitating, catastrophic sovereign debt default:

So, out of the multitude of potential scenarios, I have settled upon one which is really bad, but doesn’t involve asteroids, mass extinctions, or apes taking over. It is consistent with prior bad episodes of sovereign debt default.

Here is the Really Bad scenario. It’s not a worst possible scenario. It is more like the Long Depression or the Great Depression reoccurring under 2010 conditions.

In the Really Bad scenario, 45% of the countries with large outstanding sovereign debts are in default within a 2-3 year period.

As the author points out, the models that led to these conclusions center on economic conditions very similar to ones that actually existed in the recent past. So this isn’t exactly fear-mongering; it’s … well, it’s something else I can’t quite put a label to.

Regardless, the entire series, written by a Calculated Risk reader, is worth reading. (Sidebar: Inviting readers to write posts is an awesome way to maintain a blog.)

The series: