Posted on 03/01/2010 4:08:00 PM PST by TigerLikesRooster
March 1, 2010, 6:06 p.m. EST
Credit crunched
Country debt may no longer be guarantee for investors: Pimco's Gross
By Sam Mamudi, MarketWatch
NEW YORK (MarketWatch) -- Bill Gross, manager of the world's largest mutual fund, believes the debt of some nations may in the future be no better than private debt issued by corporations.
Sovereign debt has typically offered lower yields than corporate credit because of the presumed ability of national governments to self-finance.
Gross, manager of the $200 billion Pimco Total Return Fund (FUND:PTTRX) , says that the worst-hit countries of the financial crisis might see that advantage erode.
National debts have spiraled as governments try to dig out of the global recession, spurring concern that the quality of those credits will be impaired. Recent troubles of Dubai and Greece have only heightened investors' unease.
(Excerpt) Read more at marketwatch.com ...
P!
Don’t forget individual states like California, I wouldn’t take my tax refund (i.e. no money out of my pocket to buy it) in that form even if it was a one-year bond that paid 20% interest.
This is why the dollar is going to surprise a lot of people this year by strengthening. Sovereign debt default is going to make the dollar the best of a bad lot.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.