TUESDAY AUGUST 07
Frozen Bonds

The market for high-grade corporate bonds is totally locked up, says the Associated Press. This is bad for both companies, who issue new bonds as a source for capital, and for investors, who buy them as investments. It's kind of a self-perpetuating thing: The more people stay away, the less bonds are actually issued (last week, there was only one, and it was from General Electric, a AAA rated company). As a result, corporate deals get delayed, stocks fall, and more money comes out of the market. The money has to be going somewhere, though. In addition to under the mattress, investors are diverting their money to government bonds.

August 2007

Login Required

Enter your login details here

E-mail:

Password:

New User?

Sign up to get free access to TraderDaily.com