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Economy
In reply to the discussion: STOCK MARKET WATCH -- Thursday, 14 February 2013 [View all]Demeter
(85,373 posts)7. Fed Joining in Alarm Over Distortion It Enabled: Credit Markets
http://www.bloomberg.com/news/2013-02-11/fed-joining-in-alarm-over-distortion-it-enabled-credit-markets.html
A Federal Reserve governor is joining those warning that junk-debt investors are poised for losses, while his institutions policies spur them to keep buying the debt.
Yields on a record 38 percent of the $1.1 trillion of notes sold by the neediest U.S. borrowers were trading below the 10- year average rate for investment-grade debentures last month, Barclays Plc data show. Investors poured a record $1.3 billion into U.S. leveraged loan funds last week as covenants on the debt weaken the most ever.
The central banks policy of keeping benchmark borrowing costs at about zero for a fifth year is pushing investors into riskier debt, even as Fed Governor Jeremy Stein warns that the market for speculative-grade debt may be overheating. While U.S. prosecutors are suing Standard & Poors for deliberately failing to provide warnings against losses on collateralized debt obligations before the credit crisis, the governments stimulus is fueling demand for similar products now...MORE
A Federal Reserve governor is joining those warning that junk-debt investors are poised for losses, while his institutions policies spur them to keep buying the debt.
Yields on a record 38 percent of the $1.1 trillion of notes sold by the neediest U.S. borrowers were trading below the 10- year average rate for investment-grade debentures last month, Barclays Plc data show. Investors poured a record $1.3 billion into U.S. leveraged loan funds last week as covenants on the debt weaken the most ever.
The central banks policy of keeping benchmark borrowing costs at about zero for a fifth year is pushing investors into riskier debt, even as Fed Governor Jeremy Stein warns that the market for speculative-grade debt may be overheating. While U.S. prosecutors are suing Standard & Poors for deliberately failing to provide warnings against losses on collateralized debt obligations before the credit crisis, the governments stimulus is fueling demand for similar products now...MORE
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Ms. Brown goes straight to the heart of the matter. The message needs to go viral.
Ghost Dog
Feb 2013
#20
EU exec Olli Rehn says euro states can have more time to cut deficits THAT'S BIG OF HIM
Demeter
Feb 2013
#15