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The Day The Big Fat Junk-Bond Bubble Blew Up

Monday, June 10, 2013 - 7:19 AM
Bubbles balloon to an absurd magnitude. But one day the feeding frenzy dies down, and gradually, or sometimes suddenly, the risks, the silliness, the illogic, the whole nonsensical nature of the bubble move into the foreground for all to see, and more and more people open their eyes and see it. Some of them will try to get out somehow, quietly at first, by looking for the greater fool. And there are plenty of them, for a while. But new investors want to be compensated for the risks they’re now seeing, and they’ll demand higher yields in return for taking on those risks. That day might have been May 9 – when the air started hissing out of the junk bond bubble. What came afterward was a rout and a spike in yields.

The Day The Big Fat Junk-Bond Bubble Blew Up - Business Insider
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ShorebreakShorebreak2,683 posts since
Apr 6, 2010
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