Thank You Ben
From last night’s market observation by Frank Barbera:
Of all the markets I follow, none is perhaps more dangerous at this time than the market for Junk Bonds. It is ironic that two years following the beginning of the great crash of 2007-08 the reach for yield is so striking that investors are willing to pay up for sub-par (in many cases, truly junk paper) just because they are desperate for yields. Credit quality on these bonds has deteriorated radically as today’s climate is nowhere near as positive as the climate that prevailed back in mid 2007. Yet today, yields are even lower. This predicament falls squarely on the doorstep of one Chairman Bernanke. Thank you, Mr. Chairman, for depriving the Senior Citizens and Savers of the United States from their interest income.
Thank you, Mr. Chairman, for generously handing that income stream money over to the large Money Center banks who need to rebuild their imploded balance sheets. Thank you for forcing investors who have no business doing so, to take unwarranted risks with their hard earned savings as yields on money markets are now so low that there for many is almost no choice but to seek out the high yields offered by low quality bonds. In my view this is poor, very poor policy making by the Fed which continues to compound one mistake upon another.
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This is all part of the program to transfer any wealth the middle class has to the well fed and protected bankers. If any one after the last two years is dumb enough to buy a wall street product- junk bonds- well they deserve what they get. The elderly after years of phoney CPI numbers screwing them out of their proper social security payments now are having their saving,if any, return nothing to allow Goldman to get cheap money to rob other members of the middle class.
Comment by John — 10/15/2009 @ 9:25 am
Right you are John. A good example is the record amount of Wall Street bonuses to be paid this year. Post coming later.
Comment by BMB — 10/15/2009 @ 10:09 am
Keep in mind that most of those elderly allow some wall street financial guru to PUT their money in junk bonds (ie they aren’t hunting down these junk bonds inbetween Bingo games). The elderly find their funds thus invested, because they don’t know better and expect the “guru” to be guiding them wisely. Fleecing.
Comment by Maria — 10/15/2009 @ 2:05 pm