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Yield-starved investors are piling into frontier-market debt, allowing small countries with no...

Yield-starved investors are piling into frontier-market debt, allowing small countries with no capital markets track record to raise cash at rock-bottom rates. Case in point: At 5.2%, General Electric's (GE) 10-year bonds yield 58 bps more than Paraguay's, and only 142 bps less than Rwanda's.
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Comments (15)
  • osooro
    , contributor
    Comments (73) | Send Message
     
    I think GE is a screaming buy right now. It is a quality company that can be had for less than $24 dollars a share, and you can collect a good dividend while you wait for the share price to increase.
    26 May 2013, 02:08 PM Reply Like
  • minor
    , contributor
    Comments (333) | Send Message
     
    GE 10 year bonds yielding 5.2%???? I can't find GE paper yielding that much. Mistake, maybe?
    26 May 2013, 02:51 PM Reply Like
  • walongcore
    , contributor
    Comment (1) | Send Message
     
    Every time I have bought into the GE story the stock quickly tanked. An absolutely great company that just appears to be too big for any validation by the market. Will never invest in GE again.
    26 May 2013, 02:55 PM Reply Like
  • Frank101
    , contributor
    Comments (2) | Send Message
     
    If you are a short-term investor, you probably should stay away from GE.
    I've been investing in GE for several years and every time the stock has tanked, I've picked up more shares at bargain prices. The yield on my actual invested dollars is currently about 5.5%. and the value of my stock is up over 20%. All the while, I've been picking up extra cash selling GE Calls. I'm not complaining.
    26 May 2013, 06:11 PM Reply Like
  • natb
    , contributor
    Comments (38) | Send Message
     
    GE will rise when Europe recovers.
    26 May 2013, 02:59 PM Reply Like
  • maybenot
    , contributor
    Comments (4126) | Send Message
     
    GE is rising.

     

    Europe will recover.

     

    All is well (so far).
    26 May 2013, 03:52 PM Reply Like
  • DJS1843
    , contributor
    Comments (32) | Send Message
     
    SO FAR SO GOOD WITH GE LONG.........
    26 May 2013, 06:08 PM Reply Like
  • muchomoola
    , contributor
    Comments (2) | Send Message
     
    I have owned GE for several years now bought before and after the financial crash . I am even on it except for some great dividend and option writing (covered calls mostly) No complaints here.
    26 May 2013, 06:11 PM Reply Like
  • chris293
    , contributor
    Comments (199) | Send Message
     
    The market goes up, the market goes down. Timing is for the investor with a strong gut. I really was confident that the dividend was secure a few years ago but surprise GE is just like any company if it is not careful. The bigger they are, the longer they will take to turn around. Who are these people that buy bonds at low rates? As a capitalist type person, I love it when dividend rates are higher than most bond interest rates. Well, you never know!
    26 May 2013, 08:24 PM Reply Like
  • Exquisite Decay
    , contributor
    Comments (175) | Send Message
     
    All the comments so far have been about GE. Fine; but this market comment's theme is about people taking on greater risk to buy bonds of countries that have no history of paying back loans. Anyone have any concerns with that? I do, especially if it is retail investors who do not trully understand the risk they are taking on. I do not look forward to news stories a year or two from now about grandma losing all her retirement savings because she put it all in bonds of Equatorial Guinea.
    26 May 2013, 09:38 PM Reply Like
  • BOOBOO86
    , contributor
    Comments (6) | Send Message
     
    There is more growth in the emerging markets than in the U.S. and Europe combined so if this growth can be managed then certainly the debt can be managed well for the investor. Things are a lot safer now without a Republican in charge feeding our tax dollars to dictatorships in exchange for oil rights. The biggest fear, after Arab Spring, is that we still have more friends than enemies.
    27 May 2013, 12:06 AM Reply Like
  • BOOBOO86
    , contributor
    Comments (6) | Send Message
     
    GE is like the federal government. It is too big to fail but too incompetent to deserve to grow any larger. GE will never yield anything unless it is broken up like Standard Oil into smaller companies. This will create growth that can be used to pay off its huge under-funded pension funds. For every GE, there are 100 small companies that can't make it because GE, like the government, can create its own debt and out-spend the little guy. Truthfully, we have the worst U.S. Congress in American history and without a Congress that is on board with renewing the nation's energy grid and rebuilding worn-out infrastructure we will not progress and GE will stumble along. If you read somewhere that the Congress is finally on-board with out President in rebuilding our country without extorting an abortion amendment on every new bill, then and only then should you invest in GE. GE has a cloudy future.
    27 May 2013, 12:07 AM Reply Like
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    Great comment. All we have to do is look at the bridge collapse in Washington State to see the problem with our worn-out infrastructure and yet we have certain right politicians who cannot see the forest thru binoculars from across the street.
    28 May 2013, 10:49 AM Reply Like
  • Bernie Kent
    , contributor
    Comments (3) | Send Message
     
    Unlike several other large US companies with underfunded Pensions (ie. ExxonMobil, etc.), GE has a pension fund that is fully funded, depending upon the discount rate of future funds you select. I do agree that GE is somewhat like the US government with an enormous long term debt, but the lion's share of our US government debt is unfunded pension and insurance obligations(Medicare, Medicaid, Social Security, etc.).
    28 May 2013, 06:28 PM Reply Like
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    Can anyone tell me how to find information re: this debt instrument?
    28 May 2013, 10:34 AM Reply Like
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