subject: Graham Walker: Hidden Costs of High U.S. Bond Yields [print this page] Sources close to "Graham Walker", the Asia-based money management firm, believe that the recent surge in yields on the benchmark us 10yr bond is the harbinger of higher interest rates in the world's largest economy.
Whether or not interest rates are raised whilst the US economy is patently unable to withstand them is largely dependent upon how long investors are willing to invest in sovereign bonds issued by a debt-laden nation for next to nothing in terms of compensation for assuming the risk of doing so.
John Reynolds CEO at "Graham Walker" suggest that investors in the market for sovereign debt appear to be making the same mistakes that those who bought into the CDO and MBS time-bombs that caused the subprime tsunami in that they are mispricing risk.
The firm also believes that the recent furor over Greece's and Dubai's debt crises has focused attention on the potential for sovereign defaults in the months and years ahead.
Additional headwinds include investor concerns over the ability of the bond markets to absorb unprecedented levels of debt issuance especially now that the US Federal Reserve is no longer buying bonds or mortgage-backed securities. "Graham Walker" analysts theorize that, in order to continue to attract investors, nations may have to raise yields of the magnitude that will raise long term interest rates including mortgages.
---------------------------------------------
Founded in 1998, WebArticles Inc. is a full-service public relations and marketing firm. We specialize in strategic planning, writing, media relations, media/special events, public affairs, media training, analyst relations and marketing communications. WebArticles Inc. principals are high level public relations executives, who work on every piece of business to ensure the best results.
Graham Walker: Hidden Costs of High U.S. Bond Yields
