Eminent domain: Being a bondholder ain't what it used to be!

03-11-2012 • The Political Commentator

Pity the poor bondholder who faces the wrath of government! Senior debt, bond indentures and full faith and credit are investing terms that don't seem to mean what they used to mean! For those bond buyers who may choose to go for the added security of the senior debt of a corporation and who are willing to give up some return for the privilege, say General Motors (see GM bondholders below); For bond buyers who have confidently placed their belief (and money) behind the full faith and credit backing of some city, state or sovereign issuer; and For those bond buyers who believe that what a bond indenture says is sacrosanct and protected by the law: Perhaps it is time to invest in something a little more reliable and regulated like the inventory in a pawn shop! Wall Street etiquette...