2007-06-16

The Economist analyses the Bond Market Massacre

It's not pretty. The article points out that a large investor - probably an Asian central bank - began to pull out some of its reserves. The impact?
A higher risk-free rate will eventually raise the financing costs for everyone, from American homeowners fixing their mortgages, through hedge funds using leverage, to private-equity groups planning bids for quoted companies. It should also bear down (eventually) on economic growth.

Lesson for us? Pay off debt. Avoid borrowing more.



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