Auto downgrades take a toll

conference

general motors and Ford bond issues are having generalised depressive effect on bond prices

Hedge funds and investment banks have been scarred by the downgrade of General Motors and Ford debt, unleashing a wave of falling prices in the bond markets. That is the view of Aegon's fixed interest team, which believes markets will fall for a couple more months until they hit the bottom. Team members David Roberts and Philip Milburn are therefore delaying investments in the short term. Milburn said the fall has been triggered by hedge funds and the trading desks of investment banks having too much risk in the corporate credit market at a time when this major event took place. In par...