Market Watch with Tom Waitt

September_1st_2010.mp3 Bonds Fall, Rates Rise    Investors have been disappointed with the performance, or lack of performance of their mutual funds. Equity markets despite volatility have not been friendly to the buy and hold mentality. Many investors are jumping out the frying pan and into the fire of rising interest rates.   30 year US Treasury Bond Index (click for larger picture) Frustrations from 10 years of underperformance have seen many investors lock in a fixed rate at near record lows. The global bond market is more than three times the size of the Worlds' equity market, so what happens to bonds is crucially important. Bonds are in a huge bubble and that bubble could be very near bursting. Bonds could be killed by the slightest hint of higher interest rates. The bond markets response to Bernanke's speech last Friday was to crack bonds wide open as a preview of what can happen. In one day, three years of interest is down the drain as the bond values fell. Buying or