Some believe it will take more than that for the bond market to take off.
As for the bond market, the biggest surprise and disappointment is my portfolio of high yield paper stands upstaged by 10-year Treasuries and AA municipals which require no serious due diligence.
Rapid liquidation of the trusts' holdings as investors withdraw their money might have little impact on the stockmarket, as the trusts keep only 3% of their assets in equities, but it could be catastrophic for the bond market.
ECONOMIST: Fund management: South Korea’s hidden horror | The
Over the past decade or so, the worst loss suffered by Lehman's Aggregate Bond Index, a proxy for the entire bond market, was a 3.5% decline over two months in mid-2003.
Enstar is perhaps best remembered as providing the smoking gun testimony that put former junk bond king Michael Milkin in federal prison for manipulating the bond market.
We saw this vicious cycle in junk bonds after Mike Milken was forced to suspend his activities as the market maker for the junk bond market.
Over the past decade or so, the worst loss suffered by Lehman's Aggregate Bond Index (amex: AGG - news - people ), a proxy for the entire bond market, was a 3.5% decline over two months in mid-2003.
The inability to cross above the top of that bar combined with the loss of fuel (volume) is bearish and bodes ill for the municipal bond market.
The immediate, under-the-radar problem for the municipal bond market is that borrowers relied on banks to backstop their credits and lower short term funding costs when the credit crisis shut the door on auction rate preferred financing.
This problem has already dragged Ireland into an EU-IMF program and Spain is now on the verge of being locked out of the bond market for the same reason.
FORBES: Euro Finance Ministers Head for Beach Amid Utter Confusion
For all those reasons, the market for municipal funds is roughly 0.2 percent of the corporate bond market, and less developed than those in emerging economies like South Africa and the Philippines, claimed Nagarajan Narasimhan, senior director of CRISIL Ratings.
So what should bond investors, especially retirees, be on the look out for as far as an end to the bond market ride?
Still, Monti's decision to stand down as premier once parliament approves the 2013 budget provides the first big test for Italy's bond market since the ECB-driven rally in Italian debt began in late July.
Beijing also has opened the door wider for foreign investors to access the domestic bond market, though Chinese banks and mutual funds still make up the biggest chunk of buyers.
Headlines swirled, Greece caused turmoil for the entire Southern Europe bond market.
FORBES: Jon Corzine: Criminal Or Just Plain Old-Fashioned Stupid?
That created fresh worries for the Japanese government-bond market.
That might be good for Fidelity, which has a huge internal market for shares and an investment in alternative trading systems, but not for small investors: in the bond market, which is electronic, they are routinely stuffed.
All eyes are on the municipal bond market given the potential for higher income taxes and a growing number of defaults in the public sector.
Nor is it economic, given the issuing costs, for small companies to borrow money in the bond market.
These include the stockmarket, the bond market (government and corporate) and the money market for short-term securities, such as commercial paper.
Washington and Wall Street have bristled at the thought of a bail-out for the bond insurers, though they have also been wary of leaving the municipal bond market exposed to the capital-constrained bond insurers, who face losing their triple-A credit ratings--those who haven't lost them already, that is.
Should a company like Gazprom, for example, lose access to the U.S. bond market on a sustained basis, it would not only pay more for the funds it raises elsewhere (e.g. in Europe or Asia) but would likely find itself unable to attract the volume of funds required to meet its development needs.
Though the bond market reacted well to the July inflation numbers, the data left room for doubt and are unlikely, by themselves, to determine the bond market's future.
"There's not a lot more room in the bond market for appreciation, " Saperstein says.
Bank of China's interest in securitization coincides with an unprecedented start to the year for the commercial-mortgage-bond market.
He had an interesting idea for what might help the muni bond market.
FORBES: Muni Talks: Roubini And Lehmann Say Get Out Of Municipal Bonds
Unlike in, for example, the European sovereign bond market, there is no sign of contagion in the US muni market.
Some analysts are looking for a confirmed top in the bond market before they will turn more bullish on stocks.
The Federal Reserve helped create the bubble in the housing market by keeping interest rates too low for too long and is now creating another bubble in the bond market.
FORBES: The Limits Of Monetary Policy Call For Moral, Sound Money
应用推荐