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The Bond Market Is Expecting a Corporate Default Rate CONSIDERABLY HIGHER than the Great Depression

Posted By admin On November 22, 2008 @ 4:05 am In Money Watch | Comments Disabled

George Washington’s Blog [1]
Saturday, Nov 22, 2008

Junk bond guru Martin Fridson told [2] Bloomberg on Wednesday:

“Either the [high-yield bond] market is right and expecting a default rate considerably higher than it was in the Great Depression, or we have such profound dislocations and selling pressures going on that it really is creating extraordinary fundamental value.”

In other words, corporate bond yields are in the stratosphere right now. Either investors are overreacting to corporate default risk [3] (thus driving up the yields), or we are in for a very bumpy ride.


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URL to article: http://www.prisonplanet.com/the-bond-market-is-expecting-a-corporate-default-rate-considerably-higher-than-the-great-depression.html

URLs in this post:

[1] George Washington’s Blog : http://georgewashington2.blogspot.com/2008/11/bond-market-is-expecting-corporate.html

[2] told: http://www.bloomberg.com/apps/news?pid=20601087&sid=aec7wvoKeNEM&refer=home

[3] investors are overreacting to corporate default risk: http://seekingalpha.com/article/107311-bond-market-unsafe-at-any-yield

[4] Moody’s predicts default rate will exceed peaks hit in Great Depression: http://www.prisonplanet.com/moodys-predicts-default-rate-will-exceed-peaks-hit-in-great-depression.html

[5] Bond Insurers Getting Hammered by Credit Default Swaps: http://www.prisonplanet.com/bond-insurers-getting-hammered-by-credit-default-swaps.html

[6] Spain’s current unemployment rate exceeds the US rate during the Great Depression: http://www.prisonplanet.com/spains-current-unemployment-rate-exceeds-the-us-rate-during-the-great-depression.html

[7] Municipal Bond Market Crash 2011: Are Dozens Of State And Local Governments About To Default On Their Debts?: http://www.prisonplanet.com/municipal-bond-market-crash-2011-are-dozens-of-state-and-local-governments-about-to-default-on-their-debts.html

[8] Dow Futures Off 120, Yields Higher Across Europe, Awful Economic Data, German Bond Auction Flops: http://www.prisonplanet.com/dow-futures-off-120-yields-higher-across-europe-awful-economic-data-german-bond-auction-flops.html

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