Americas

Treasury Benefits From `Massive Paranoia' as Bailout Borrowing Cost Falls Bill Clinton was forced to abandon spending initiatives to boost the economy at the start of his presidency when advisers warned him that the borrowing needed to fund the programs would push interest rates higher. President- elect Barack Obama may not have the same problem.

Treasuries Fall as Stocks Gain on Speculation Automakers Will Be Rescued Treasuries fell, raising yields from record low levels, as Asian and European stocks advanced on speculation the U.S. government will provide financial aid to prevent the nation’s biggest automakers from going bankrupt.

Ecuador Default May Hit `True Monsters' Harder Than Argentina, Bonds Show Ecuador may saddle investors with the biggest losses in a government bond restructuring since at least World War II after President Rafael Correa fulfilled a two-year pledge to default on debt he calls “illegitimate.”

Grand Jury Probes Richardson Contributor's Fees From New Mexico Bond Deals A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson’s political action committees.

Europe

European Bonds May Underperform Next Year, High Frequency's Weinberg Says European government bonds may return less than other markets next year as the region’s central bank resists cutting interest rates, according to High Frequency Economics.

European Bonds Advance Before Reports That May Show Economy Deteriorated European government bonds rose before reports this week that may show manufacturing and services industries contracted at the fastest pace in at least a decade, bolstering the case for interest-rate cuts next month.

Corporate Bond Risk Rises on Concern Madoff Fraud May Spark Forced Sales The cost of protecting corporate bonds from default rose on concern the alleged $50 billion fraud by investment manager Bernard Madoff may trigger forced selling by hedge funds as clients seek to close investments.

Asia

Japan's Notes Fall as Government May Boost Debt to Fund Economic Stimulus Japan’s five-year bonds fell, ending two days of gains, on speculation the government will increase debt sales to fund economic-stimulus spending.

Australia to Sell Up to $3.3 Billion of Bonds to Support Financial Markets Australia’s government will issue as much as A$5 billion ($3.3 billion) of new bonds “to ensure the effective operation of Australia’s financial markets,” Treasurer Wayne Swan said.

Bond Risk Falls in Asia on Expectation U.S. Automakers Will Receive Aid The cost of protecting Asia-Pacific corporate bonds against default fell on speculation the U.S. automaker industry will be rescued by the Bush administration to avoid deepening the global recession.