04/11/2010 – The Next Major Disaster Developing for Bond Holders

In this free report, you get some of the latest commentary on
fixed-income markets adapted from various Elliott Wave International’s
publications, including 2010 issues of Robert Prechter’s monthly Elliott
Wave Theorist and its sister publication, The Elliott
Wave Financial Forecast.

Enjoy this excerpt — and for details on how to read this important
Club EWI report free, today, look below.

The
Next Major Disaster Developing for Bond Holders
(excerpt)

The Elliott Wave Theorist — October 2010
(By Robert Prechter, EWI president)

…History shows that investors have been attracted like moths
to a flame to four consecutive pyres: the NASDAQ in 2000, real
estate in 2006, the blue chips in 2007 and commodities in 2008.
Now they are flitting across the veranda to a mesmerizing blue
flame: high yield bonds. Bonds pay high yields when the issuers
are in deep trouble and cannot otherwise attract investment capital.
The public is chasing a large return on capital without considering
return of it. …

The Elliott Wave Financial Forecast — October 2010
(By Steve Hochberg and Pete Kendall)

The rise in optimism since early 2009 has allowed corporations
to issue the lowest grade debt at a record rate, even more than
in the middle of the incredible expanding debt bubble of the
mid-2000s. The annual total of $189.9 billion to date is a record,
and the entire fourth quarter still lies ahead.

This is a stunning testimony to just how desperate investors
are for the returns they grew so accustomed to during the
old bull market. The Moody’s BAA-to-Treasury spread
(see chart in the free report — Ed.) has been widening since
[April] and has made a series of lower highs in August and
again in September. This behavior reveals an emerging preference
for perceived safer debt even as junk bond issuance races
higher. It is a critical non-confirmation…