Are bonds the next bubble?

Investors poured money into bonds and bond funds last year in search of safety and higher returns. Now the bond advantage is shrinking as risks are rising. "It has a bubble look to it," says Thomas Atteberry, the manager of FPA New Income, one of the largest independent bond funds.

Thousands of American homeowners are starting to see their monthly mortgage payments skyrocket, dealing a fresh blow to the already shaky housing recovery.

The widely feared reset of thousands of option adjustable-rate mortgages—where both interest and principal payments rise sharply—is already leaving many homeowners struggling to keep a roof over their head.

Consumer borrowing took a breathtaking and record-breaking fall in November, according to figures released yesterday by the Federal Reserve. Revolving consumer credit dropped almost 18% from a year earlier fueling a $17.5 billion drop in borrowing and credit card balances in October. The AP reported that the string of ten consecutive months in falling credit was a record and the absolute drop in total dollars loaned from October to November was the largest since the government began tracking the data in 1943.

Global ETF assets hit the $1 trillion mark at the end of December, a milestone long expected by industry insiders. This investment product rapidly emerged as a competitor to the $7 trillion mutual fund industry. Last year, global ETF assets rose a whopping 45.2% from the $710.9 billion in assets at the end of 2008, according to the latest research from BlackRock.

 
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