When confronted with the fact that his government’s bonds had been downgraded:

Prime Minister Naoto Kan had little reassurance to offer. “I just heard that news,” a flustered-looking Mr. Kan told reporters. “I am a little ignorant on those kind of matters,” he said. “Let me look into it more.”

Can you imagine a Western head of government responding in this way? What almost brings a tear to my eye is that it is of course how honest the response is.

I am – hear me Bryan – willing to take 50 to 1 odds that President Obama doesn’t understand what a downgrading of US Treasuries would mean. He could probably trot out some line about investor confidence but what this actually meant and the significance or more to the point, lack thereof, he would not be able to explain cogently.

Nonetheless, he could never get away with the honest statement that “look I don’t really understand the bond market”

On a different note, when I last looked at Japan they had a debt-to-GDP ratio of around 134%. To my eyes that looked completely manageable given Japan’s fundamentals. Now we are at 204% My gut tells me that this is not a serious concern either, though I haven’t looked at it.

Where I would start to get nervous just from hearing the headline numbers is somewhere in mid 300s. Not that Japan couldn’t handle a debt-to-GDP higher than that nor that particularly bad policy or bad luck couldn’t trigger a crisis with a debt-to-GDP lower than that.

To compare US debt-to-GDP is somewhere in the 60s right now. Before the crisis began Ireland’s debt-to-GDP was in the 20s.

Which is to say that the particulars matter a lot when trying to determine if a country will default.