The Next Major Disaster

Interesting when you consider the correlation with currencies!

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The Next Major Disaster Developing for Bond Holders
(excerpt)

The Elliott Wave Theorist -- October 2010
(By Robert Prechter, EWI president)

...History shows that investors have been attracted like moths to a flame to four consecutive pyres: the NASDAQ in 2000, real estate in 2006, the blue chips in 2007 and commodities in 2008. Now they are flitting across the veranda to a mesmerizing blue flame: high yield bonds. Bonds pay high yields when the issuers are in deep trouble and cannot otherwise attract investment capital. The public is chasing a large return on capital without considering return of it. ...

Annual Value of U.S. High-Yield Debt Issued

The Elliott Wave Financial Forecast -- October 2010
(By Steve Hochberg and Pete Kendall)

The rise in optimism since early 2009 has allowed corporations to issue the lowest grade debt at a record rate, even more than in the middle of the incredible expanding debt bubble of the mid-2000s. The annual total of $189.9 billion to date is a record, and the entire fourth quarter still lies ahead.

This is a stunning testimony to just how desperate investors are for the returns they grew so accustomed to during the old bull market. The Moody’s BAA-to-Treasury spread (see chart in the free report -- Ed.) has been widening since [April] and has made a series of lower highs in August and again in September. This behavior reveals an emerging preference for perceived safer debt even as junk bond issuance races higher. It is a critical non-confirmation...

Read the rest of this important report online now, free! Here's what else you'll learn:

  • How Investors Are Looking Past Red Flags in Muni Market
  • What You Should Know About Today's "High-Grade" Bonds
  • The Answer To Bond Selection
  • MORE

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