stay-away-from-bonds-warns-economist

Stay away from bonds, warns economist

Robert Lind says high-yield bonds are particularly vulnerable to the market correction and should warrant higher risk premiums.
After Wednesday's global stock market crash, which caused Hong Kong's Hang Seng index to drop 3.15%, the markets have been fickle. Intraday trade has been erratic as bargain hunters move in and out of stocks, trying to determine the markets' next move.

Negative sentiment has been fuelled by a couple of bad news reports. Bear Stearns halted redemptions in a mortgage-related hedge fund in the US, and Australia's Macquarie Bank said two of its bond funds may suffer potential losses of up to 25%.

As stocks rose yesterday, MoodyÆs darkened the mood again. The credit ratings agency placed MGIC Australia's rating on review for possible downgrade. MGIC Australia, is a wholly-owned subsidiary of Mortgage...
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