Bonds Priced for Hooverville

By Tom Sullivan

SOMEBODY CALL JOE THE plumber to fix the leaky corporate bond market. Stat!

Sure, the Fed and Treasury have worked their magic to try to stabilize Wall Street and the rest of the banking system and get them lending again. (See Credit Markets.) But there's been no trickle-down to corporates.

The average investment-grade industrial company bond is yielding 4.95 percentage points over Treasuries with comparable maturities, Moody's says. That's about the long-term average for much riskier junk bonds. "It's the widest level since 1932-1933," says John Lonski, Moody's chief economist. That was during the, ahem, Great Depression.