Bond investors are a conservative lot. They earn only 1.6 percent on the average Treasury maturity these days, but they expect certainty on when, and whether, they will be repaid. Countries that keep them guessing or that are expected to default are punished severely, as reflected in 20 percent bond yields in Greece or even 5 to 6 percent in AA-rated Italy. Like it or not, James Carville, global investment managers have global choices these days, and a solvent Germany or Canada is just a wire transfer away for trillions of potential investment dollars looking for a safer haven.The man who owns a lot of U.S. debt has spoken.
Thursday, July 14, 2011
Bond King Bill Gross: Don’t mess with the debt ceiling
Bond king Bill Gross takes to the pages of the Washington Post to issue a warning: