The Sovereigns And The Serfs

Bill Gross, manager at Pimco of the world's biggest bond fund, sees a knock-on effect from governments around the world propping up banks and large corporations with bailouts and bond guarantees: Borrowing rates for governments may soon resemble corporate rates.

If the U.S., the United Kingdom, Germany and others shoulder more and more risk--whether from supporting companies or cash-strapped nations like Greece--"then the credit spreads and yields of these sovereigns should look more and more like the markets that they guarantee," says Gross.
"The Kings, in other words, in the process of increasingly shedding their clothes, begin to look more and more like their subjects. Kings and serfs begin to share the same castle." (more)