“Sectors most helped by the government’s plans to bolster the banking system got the biggest boosts Tuesday. Corporate bonds issued by banks jumped in value and their yields fell sharply, while interest rates on short-term IOUs known as commercial paper decreased.
It could be weeks or months before money flows freely again in the short-term debt markets and corporate-bond yields fall enough to allow banks to fund themselves at attractive rates. That is a necessary step for banks to resume lending to corporations, small businesses, municipalities and individuals.
Mortgage bond rates, though significantly higher than they were a month ago, fell slightly. Struggling companies, some of which have been pushed to the brink because of the tight credit markets, saw yields on their debt fall Tuesday as prices rose, but these firms are still effectively shut out of the debt markets because of high borrowing costs.”
I guess that means that if you still have corporate bonds in financials, you are probably in the clear for the time being.
