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Skeptics say the ravenous demand for corporate bonds has pushed yields down too far to...

  • Tuesday, August 14, 2012, 6:35 PM ET
    Skeptics say the ravenous demand for corporate bonds has pushed yields down too far to compensate investors for their risk. U.S. corporate bonds are a flight-to-quality asset, for now. But when interest rates eventually rise, prices of recently issued bonds will fall, they warn: "The guy buying a [new] bond today is a guy buying a certain loss," says an investment banker.
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This news story has 4 comments:

  • Interest rates will never rise as long as Bernanke continues to punish responsible savers and manipulate the financial markets. The message is clear, spend any money you may still have left on inflated goods/services (gas, health care, groceries), lose money in a money market account, stay in bonds (bubble) for near nothing return, buy into the real estate market and become a landlord (pray you have good tenants or you will lose thousands), or buy stocks and hope you pick wisely (ignore 30-70%+ losses in GMCR, NFLX, FB, GRPN, FSLR, CMG, ANR, JCP, NOK, MCP, etc..etc..).

    Either way, it would seem your money belongs to "them" so either use it or lose it!
    14 Aug 2012, 07:23 PM Reply Like
  • Cash is and has always been an option. No risk, no reward. Except for a while when some banks got essentially free money they could buy treasuries with.
    14 Aug 2012, 07:37 PM Reply Like
  • Corporate bonds? Not sure how they've become popular.
    14 Aug 2012, 11:57 PM Reply Like
  • Possibly because they are the only things tied to a Market force with the responsibility to pay back. It's pretty clear to me that Government Debt is more of a confidence game than Corporate Debt. At least with Corporate Debt there are tangible assets backing some of it. Government Debt can just pass a law saying, "This piece of used tissue is all the backing we need".
    And if you disagree strongly enough, they shoot you.
    15 Aug 2012, 05:50 AM Reply Like
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