Nothing to fear but fear itself?

OMAM BOND BLOG

Christine Johnson, the manager of the Old Mutual Dynamic Bond fund, argues corporate bonds are valued at levels investors could breakeven in almost any circumstance seen in recent memory, including the meltdown of 2008-2009.

Andrew Haldane, the Bank of England’s executive director for financial stability, used the famous Franklin D Roosevelt line ‘the only thing we have to fear is fear itself’ in a recent speech to discuss the spiralling weakness in financial risk assets. Economics and financial markets are especially self-referencing. We can talk our way into a recession as corporates and individuals change their behaviour in anticipation of behaviour changes by others. Financial markets have their own version of this – played out more rapidly and more violently as every piece of data is pored over and n...