Bond markets: Careful what you wish for

Bond markets have raced from ‘’conundrum’’ to contagion. General Motors’ profit warning has rocked confidence in credit. Investment-grade bonds have given back nearly all the gains they had made this year. Junk bonds have been hit for six. Brazil has even had to cancel its weekly debt sale. Only a month ago, Alan Greenspan called low government bond yields a ‘’conundrum’’, saying they might not signal an economic slowdown, because that sat uncomfortably with tight credit spreads. Now the markets...