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The high-yield bond market also saw renewed interest. Risk premiums fell, and issuance in the second quarter was around $48.3 billion, nearly four times larger than the first-quarter pace.

Convertible bonds also enjoyed a mini-boom, having activity quadrupled in second quarter over the first quarter.

Flows into U.S.-based bond funds have been positive every month this year.

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China's Stockpiles

By Howard Simons
06/29/09 9:48 a.m. Bloomberg is carrying a story about how China is going to end its manic stockpiling of various industrial metals. On one level, China's purchases in recent months made sense if it had upcoming direct use for the copper, aluminum and zinc it was buying at prices a fraction of where they were a year-ago. On the other hand, the country was just engaged in a self-sustaining state bureaucracy without a "stop" button.

Just as the U.S. Defense Logistics Agency stockpiled "strategic" metals for years and ultimately sold them off in auctions, the Chinese will find their actions pointless.

Its decision will put downward pressure on various metals prices, and I am sure it will pole-ax all those who still confuse a commodity-linked equity with the commodity itself. If you have piled into various miners, watch for a stampede in the other direction.

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