I keep reading stories about hedge funders, private equity firms, etc,, buying distressed bonds and then suing, or even confiscating property from the bond issuers. There are also stories of government rules requiring municipalities to make good on coupon payments, etc... and then we have the US government that comes in to bail out various industries in distress to prevent systemic down stream contagion.
When I was a kid I don't remember hearing much of any of this stuff. My family used to tell me that bonds were still risky, and that one day you get coupon payments and the next they might stop due to that company/govt entity going under. I recall hearing the only sure thing in the bond market is treasury payments. Now there are lots of other bonds considered sure things.
With that being said, could this phenomenon be impacting bond prices/interest rates? And would we actually benefit if some bonds were allowed to become worthless to accurately price in risk for the entire market?
Submitted October 07, 2017 at 12:42PM by warrenfgerald http://ift.tt/2wEPLGk
